The Plot Thickens with a Generic Blood Thinner A small Canadian firm takes on two of the largest drug companies in the world with its surprise launch of a generic copy of the best-selling blood thinner Plavis. Apotex began shipping its generic version to U.S. stores today. The makers of Plavix sold $6 billion of the popular heart drug last year.
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The Plot Thickens with a Generic Blood Thinner

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The Plot Thickens with a Generic Blood Thinner

The Plot Thickens with a Generic Blood Thinner

The Plot Thickens with a Generic Blood Thinner

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A small Canadian firm takes on two of the largest drug companies in the world with its surprise launch of a generic copy of the best-selling blood thinner Plavis. Apotex began shipping its generic version to U.S. stores today. The makers of Plavix sold $6 billion of the popular heart drug last year.

MICHELE NORRIS, host:

Two of the world's largest drug companies are reeling from a bold attack by a small Canadian company. Today a company called Apotex began shipping a generic version of the blood thinning drug Plavix. Together Bristol Myers and Sanofi-Aventis have sold $6 billion of Plavix last year.

As NPR's Snigdha Prakash reports, some analyst says Bristol's future as an independent company is now at stake.

SNIGDHA PRAKASH reporting:

There are many reasons why the prescription drug industry is among the most profitable in the nation. One of the most important is that drug companies enjoy a long market monopoly on their products. The drugs are covered by patents, and competitors can't rush in with cheap copies. The patents are meant as incentives to encourage innovation to keep drug prices and industry profits high.

The patent protection isn't absolute except for the first few years of the patent. After that, generic drug makers may copy and sell the drug if they can find a way to make it that doesn't infringe on the patents. When that happens, the drug's price tumbles, says Jon Liebowitz, a commissioner of the Federal Trade Commission.

Mr. JON LIEBOWITZ (Federal Trade Commission): Prices go down about 30% when the first generic enters the market. Usually. Prices go down up to 80% when more generics enter, and that's usually six months after the first generic does.

PRAKASH: Sales of the branded version of the drug all but evaporate, and companies do everything they can to delay the dread event. Until a few days ago, Bristol Myers and Sanofi thought they done that with Apotex. Earlier this year they signed a deal with Apotex under which the company would have held off on selling generic Plavix until 2011, just a few months before a key patent on Plavix expired.

Bristol and Sanofi even agreed to pay Apotex some $40 million in exchange. But the deal was rejected by government regulators, and last month the justice department opened an unusual criminal investigation into it. On Wall Street, analysts speculated that the companies would now have to go to court to resolve the patent dispute. Instead, yesterday Apotex announced it would start shipping generic Plavix right away.

Ms. JAMIE REUBEN (Morgan Stanley): I've covered the drug industry for more years that I want to say, but I have never seen anything like this happen before.

PRAKASH: Jamie Reuben is a stock analyst at the brokerage firm Morgan Stanley.

Ms. REUBEN: As you and I speak right now, Apotex is selling the product now to pharmacy benefit management companies like Medco and Express Script. They're are also selling product to wholesalers, as well as chains like Walgreen's.

PRAKASH: Reuben says pharmacists and insurers will automatically substitute generic Plavix for the brand name drug. She says Bristol, which sells Plavix here in the U.S. to prevent heart attacks and strokes, will be hit especially hard.

Ms. REUBEN: Keep in mind that Plavix is a $4 billion blockbuster in the U.S. That represents approximately 30% of Bristol Myers earnings.

PRAKASH: And she says because it's so dependent on Plavix, Bristol may become a more attractive target for acquirers as it sales of Plavix are cut in half by the generic. Brand name companies have prevailed over generic makers in several high profile patent disputes recently, including over Lipitor, the world's best selling drug.

But Reuben sees today's developments as a sign of the times. She says generic companies are flexing their legal muscles more and more. And she says the failure of the three way deal over Plavix suggests that even large payments may not be enough to keep generic drug makers at bay.

Snigdha Prakash, NPR News, Washington.

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Battle over a Blood Thinner Goes to Court

The bitter patent fight over the world's second best-selling drug, Plavix, played out Friday in a Manhattan courtroom. Bristol Myers Squibb and Sanofi-Aventis are bidding to stop sales of generic copies of Plavix by the Canadian company Apotex. Apotex stunned Bristol and Sanofi when it began shipping generic Plavix to U.S. pharmacies ten days ago. The key patent on Plavix, a blood thinner used to prevent strokes and heart attacks, doesn't expire until 2011.

On Friday, Bristol and Sanofi asked Judge Sidney H. Stein of the U.S. District Court of the Southern District of New York to compel Apotex to immediately stop shipping Plavix to wholesalers. The companies also want the judge to force Apotex to take back what they've already sold to wholesalers.

"You can never put this Humpty Dumpty back together if it's not stopped,'' their attorney, Evan Chesler told the court.

In court filings, the companies have argued that if Apotex isn't stopped, other drugmakers will start selling their generic versions of Plavix. A trial on the underlying patent dispute won't be held until next year. Bristol and Sanofi argue that even if their patent is eventually upheld, they will have been irreparably damaged, because consumers and insurers will want brand-name Plavix at the lower, generic prices to which they will have become accustomed.

Chesler told the court Friday that if generic sales of Plavix aren't stopped, all drug research would be hurt. "It will kill future clinical efforts,'' he argued.

Meanwhile, Robert Silver, a lawyer for Apotex, argued that stopping sales of generic Plavix would hurt patients and the public interest. Brand-name Plavix costs about $4 a pill in the U.S. Apotex sells the generic version for an estimated 10 to 20 percent less. Silver said Bristol and Sanofi's patent on Plavix is ``invalid and unenforceable."

Judge Stein will base his decision on several factors, including the strength of the underlying patent on Plavix. The hearing will continue on Monday, and a decision could come as early as Tuesday.

Of the three companies involved, Bristol, which sells Plavix in the U.S., has the most at stake. Last year, Bristol sold over $3 billion of Plavix, which is the company's biggest drug and accounts for a third of its profits.

Until a few weeks ago, Bristol thought it would have that money coming in until 2011, when the key Plavix patent expires. If Bristol fails to stop Apotex, that money could almost disappear in a few months.

The company is staring at such a dramatic erosion of revenue and profits that many analysts believe Bristol might not survive as an independent company if it can't protect its Plavix franchise. They say it has many promising drugs in development but they won't come to market and start generating profits in time to save the company.

Even before Apotex's surprise shipments of Plavix, this patent fight had taken an extraordinary turn. Bristol and Sanofi are targets of a criminal investigation by the Department of Justice. The two drug companies had previously signed agreements with Apotex, agreeing to pay Apotex to keep its generic Plavix off the market until just a few months before their patent expired in 2011. The deal, however, ran into trouble after the announcement of the criminal probe and a rejection by state attorneys general. It's believed the criminal investigation focuses on undisclosed aspects of that deal.

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