Back in April the PAL fortune teller made some bold predictions about GlaxoSmithKline’s (NYSE:GSK) new migraine drug Treximet. (’GlaxoSmithKline sets out to dupe migraine sufferers with Treximet smoke and mirrors“). Treximet is nothing more than a combination of Imitrex (sumatriptan, soon to be available as a generic) and naproxen sodium (commonly known as Aleve and available over-the-counter). Treximet is a perfect example of what we called a Goober Grape drug, which we described thusly:
What’s a Goober Grape Drug?
Goober Grape, for the (fortunately) uninitiated, is a appalling combination of peanut butter and jelly in a single jar….
So henceforth, a “Goober Grape Drug” refers to any combination drug that offers no additional clinical advantage and only the most ridiculously minimal increase in patient convenience. There are certainly conditions in which combination pills are important, in that reducing the number of pills to be taken increases patient compliance, but allergies sure as heck ain’t one of ‘em.
Neither, for that matter, are migraines. There’s no evidence that taking Imitrex and naproxen in a single pill (as Treximet) is any more effective than taking it in two separate pills, which is not surprising. Given that migraines are often excruciating, it’s absurd to think that someone in the midst of a migraine would take one pill, but not two, to relieve their suffering.
So was the PAL Fortune Teller correct?
As the PAL fortune teller gazed into the Pharma Crystal Ball, a prediction was made that “TV ads will appear in prime time singing the praises of this “new” treatment for migraines. People frolicking through fields of flowers may or may not appear.” Anyone who watched the recent presidential debates saw the new Treximet commercial. In case you missed it see for yourself, here it is. (Note: there are not, in fact, people frolicking through fields of flowers)
Notice that the ad only says that Treximet is “superior to Imitrex tablets at relieving migraine pain” – it does NOT say that Treximet is superior to Imitrex and naproxen taken together.
The PAL fortune teller also predicted that:
“Yet you can be sure that Treximet’s price will be similar to what Imitrex costs right now ($25 a pill) and there’s a good chance it will be more expensive, as new drugs typically are ($30 a pill? More? Who knows?).”
We were wrong on this one — at least for now. On drugstore.com, 9 pills of Imitrex cost $199.98, and 9 pills of Treximet cost $229.78. That’s about $25 a pill for Imitrex and about $22 a pill for Treximet. Wait a minute, that means Imitrex is more expensive than Treximet (right now). What gives?
As we reported back in April, generic versions of Imitrex will become available starting in late 2008 and into 2009, when Imitrex’s patent will expire. So over the next year, the price of Imitrex will go down, finally settling most likely, as most generics do, at 20-30% of the brand-name’s price. We predicted that the cost of taking generic Imitrex and over-the-counter Aleve would eventually be about $7.50.
So GSK needs to do as much as they can to get people to switch to Treximet before generic Imitrex becomes available. That means running ads on TV, having drug sales people promoting Treximet to doctors, aggressively distributing samples to physicians’ offices. And another way to encourage doctors and patients switching is to price Treximet below the price of Imitrex.
What remains to be seen is what will happen once generic Imitrex becomes available. Inevitably there will be:
Imitrex patients who switch to Treximet before the generic becomes available who choose to stay on Treximet
New patients who start on Treximet without ever having taken Imitrex
Imitrex patients who switch to Treximet before the generic becomes available who then switch to generic Imitrex,
Imitrex patients who don’t switch to Treximet who then switch to generic Imitrex, many of them automatically. This is probably the scenario that GSK most wants to avoid. Most states, and most health plans, have policies requiring “mandatory generic substitution,” that is, if a generic is available for your drug, you’ll get the generic, unless your doctor writes “Dispense as Written” or “No Substitution” on the prescription.
Categories #1 & #2 above are those most likely to remain Treximet Loyalists. It’s distinctly possible that GSK will gradually increase the price of Treximet over time, after the generic becomes available. I’m willing to guess that a lot will depend on how successful they’re initial advertising and promotion is in manufacturing a market for Treximet. It’ll be interesting to observe.
So: We were right about the Treximet ads, and wrong (at least for now) about Treximet’s price. In the end, the PAL Fortune Teller is batting .500. Which is more than we at PAL can say right now for our beloved Red Sox, who are down 2-1 in the ALCS.
As we’ve previously reported on the PAL blog, GlaxoSmithKline agreed to pay $40 million to settle a national class action lawsuit brought against it on behalf of “third party payors” (health plans, union benefit funds and others). The case alleged that GlaxoSmithKline (NYSE:GSK) defrauded third party payors by failing to disclose the increased risk of suicidal thoughts and behavior among children and adolescents taking the prescription antidepressants Paxil® and Paxil CR®.
On September 30, the U.S. District Court for the District of Minnesota held a “Final Approval” hearing in the case. Lawyers for the plaintiffs, defendant and objectors all made presentations to the Court about why the settlement is “fair, reasonable and adequate” and why it should be approved. The Court issued its order granting final approval to the settlement shortly after the hearing ended.
Now that the settlement has received Final Approval, payments can be made to Third Party Payors that paid for Paxil for pediatric patients between 1998 and 2004. The deadline to submit claims forms is December 12, 2008. A letter will go out shortly to 42,000 third party payors that had previously received a notice by mail of the settlement. The letter will apprise them of the changes to the settlement that the objectors were able to negotiate, and let them know about changes to the claims form. As of this writing, the claims form had not yet been updated on the settlement website – www.pediatricpaxiltppsettlement.com. We urge third party payors to check back soon at pediatricpaxiltppsettlement.com to see if the new form has been posted, or to call the Settlement Administrator at 1-800-396-5655.
The lawsuit alleged that GlaxoSmithKline (NYSE:GSK) defrauded health plans, union benefit funds and other “third party payors” by failing to disclose the increased risk of suicidal thoughts and behavior among children and adolescents taking the prescription antidepressants Paxil® and Paxil CR®.
The three union benefit funds objected to a number of provisions in the settlement, including an extremely burdensome, if not impossible, process to file claims for a refund of 40% Paxil expenditures. The objectors argued that this process would have unfairly favored larger health plans that have easy access to diagnosis information related to individual prescriptions. Without this information, only a 15% refund was possible. Other terms of the settlement that these funds objected to included limitations on class members’ rights to object to the settlement, opt out of it, speak at the fairness hearing, or appeal approval of the settlement.
The objectors were able to negotiate significant changes to the settlement that addressed their primary concerns regarding fairness and burdensome claims filing:
In order to ensure that the settlement funds go first and foremost to health plans and union funds that paid for pediatric Paxil prescriptions, the revised settlement caps any cy pres award to a maximum of $1 million. Previously, any funds in the settlement that went unclaimed would be distributed a one or more organizations addressing children’s mental health issues.
Cy pres awards are frequently granted by Courts when there are unclaimed funds left in a class action settlement. Such awards are supposed to benefit class members who did not file claims. However, the cy pres award in this settlement will not go to benefit the health plans that paid for Paxil, but rather to children’s mental health organizations. While those organizations no doubt do invaluable work, the benefit to the class members here is indirect at best.
Class members’ claims will be calculated in two “stages.” In the first stage, class members that are able to document individual prescriptions that were for Major Depressive Disorder will get refunds of 40% for those prescriptions. All other prescriptions will be refunded at 15%. In the second stage, the remaining settlement funds (after the $1 million cy pres award) will be distributed to all class members who file claims, based on their proportions of the total Paxil purchases claimed by all class members.
Class members will not be required to include rebates and discounts in their calculations of the net cost of each prescription. The objectors had argued that it would be impossible for many, if not most, class members to make the calculation with rebates and discounts included. This is because in most cases, manufacturers give rebates to a health for all of their purchases of all of that company’s drugs – it’s not possible to separate what rebates were for Paxil, for instance, as opposed to for another GlaxoSmithKline drug.
Lastly, the revised settlement gets rid of the provisions that attempted to limit the rights of class members to opt out or appeal the approval of the settlement.
Because these changes addressed their most pressing concerns, the objectors withdrew their objection. The objectors and PAL thus now support the revised settlement and will argue in favor of the Court approving it at the Final Approval hearing scheduled for September 30, 2008 in the U.S. District Court in Minneapolis, Minnesota.
The objection by PAL’s members underscores the important role that PAL plays in monitoring pharmaceutical class action settlements to ensure that they adequately protect the rights of consumers and smaller third party payors, health plans and union funds. To find out more about PAL’s coalition of consumer advocates and union benefit funds, and how to join, click here.
How to file a claim for reimbursement from the settlement:
Any private insurers, employee welfare benefit plans, union health and welfare funds, employer-sponsored health plans, and other third-party payors (“TPPs”) that reimbursed, purchased, or paid for Paxil® (in both tablet and suspended form) and Paxil CR® prescribed to persons under 18 years of age, from January 1, 1998 through December 31, 2004 are eligible to submit claims forms for payment from the settlement. The deadline to submit claims for payment from the settlement is December 12, 2008.
More information about the settlement, including claims forms, can be found at www.pediatricpaxiltppsettlement.com. The objection to the settlement filed by the 3 PAL members can be found here.
Below is a press release that we here at Prescription Access Litigation (PAL) issued today. Three members of the PAL coalition filed a formal objection to a settlement proposed in the class action lawsuit, Carpenters & Joiners Welfare Fund et. al. v. SmithKline Beecham, (U.S. District Court, Minnesota, Case #04-cv-3500). Details of the settlement are at www.pediatricpaxiltppsettlement.com.
A key component of PAL’s mission is to ensure that settlements of pharmaceutical class action lawsuits genuinely benefit the consumers, health plans and union benefit funds on whose behalf they are brought. When we learn of a settlement that does not benefit them, that makes it harder for them to derive a benefit, or that undermines their rights, we work with our coalition members to object to the settlement. And that is what our members Sergeants Benevolent Association Health and Welfare Fund, AFSCME District Council 37 Health and Security Plan and IUOE Local 4 Health and Welfare Fund did yesterday. Here is the press release:
Labor Unions File Objection to Paxil Pediatric Class Action Settlement Union Benefit Funds Criticize Settlement as Unfair, Call on Court to Reject it
Boston, MA – Three labor union benefit funds filed a formal objection yesterday to the proposed $40 million nationwide settlement of a class action lawsuit against GlaxoSmithKline (NYSE:GSK). The lawsuit alleged that Glaxo defrauded health plans, union benefit funds and other “third party payors” by failing to disclose the increased risk of suicidal thoughts and behavior among children and adolescents taking the prescription antidepressants Paxil® and Paxil CR®. The $40M settlement is to reimburse third party payors for payments they made to pharmacies for Paxil prescribed to children and adolescents from 1998 to 2004.
Under the terms of the proposed settlement, TPPs can be reimbursed up to 40% of their costs for Paxil prescribed for Major Depressive Disorder, while all other prescriptions for Paxil for other conditions will only be reimbursed at 15%. This requires TPPs to list a diagnostic code for each and every pediatric prescription for Paxil that they paid for during the seven year period. The objectors challenged this distinction, arguing that almost no one will really get a 40% refund, because almost no TPPs have diagnostic codes for the prescriptions they pay for.
In addition, millions of prescriptions for Paxil were written during the seven years covered by the lawsuit (1998-2004), yet the settlement requires any claim for more than $1,000 in reimbursement to include exhaustive details regarding every individual prescription of Paxil paid for during that seven-year period.
The funds also objected to other requirements, including the way that TPPs are required to calculate the net cost of the payments they made, and to misleading and inaccurate statements in the settlement notice about class members’ rights to object, appear at the hearing, or appeal final approval of the settlement.
“A $40 million settlement may sound very positive, but the devil is very much in the details,” said Gina Alongi, Administrator of IUOE Local 4 Health and Welfare Fund. “The way the settlement is currently structured will prevent many health plans and union benefit funds like ours from getting any real compensation from it.”
The three union funds objecting to the settlement are all members of Prescription Access Litigation (PAL), a national coalition of more than 130 unions and consumer advocacy groups that works to challenge illegal practices by the pharmaceutical industry.
“TPPs will have to comb through mountains of medical records and bury themselves in paperwork before they ever see a penny from this settlement,” said Alex Sugerman-Brozan, director of PAL. “Class action settlements are only as good as their claims process, and this one fails at a very fundamental level.”
Last year, Prescription Access Litigation objected to an earlier Paxil class action settlement (Hoorman et. al. v. SmithKline Beecham). That $63M settlement was of a class action brought on behalf of consumers who paid for Paxil prescriptions for children and adolescents. As a result of that objection, important changes protecting consumers’ rights were made to the settlement.
A settlement of a class action must be approved by the Court where the case is brought. Because class actions affect the rights of people and entities that aren’t even aware of the lawsuit, the Court reviews settlements to make sure they are “fair, reasonable and adequate.” Members of the class may object to the settlement, and request to speak at a hearing before the Court.
The case is Carpenters and Joiners Welfare Fund et. al. v. SmithKline Beecham Corp. (U.S. District Court for Minnesota, Case #04-CV-3500). The Final Approval hearing in the case is scheduled for September 30, 2008 in the U.S. District Court in Minneapolis, Minnesota. The deadline for third party payors to submit claims for payment from the settlement is December 12, 2008. More information about the settlement, including claims forms, can be found at www.pediatricpaxiltppsettlement.com. A full copy of the funds’ objection to the settlement can be found at www.prescriptionaccess.org/docs/pediatric-paxil-objection.pdf
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About AFSCME District Council 37 Health & Security Plan
AFSCME District Council 37 Health & Security Plan is a union benefit fund that provides supplemental health and welfare benefits, including a prescription drug benefit, to over 300,000 individuals, consisting of active municipal employees, their spouses and dependants, as well as retirees, who work or worked for New York City, the New York State Court System, various authorities, cultural institutions and the NYC Health and Hospital Corporation.
About Sergeants Benevolent Association Health and Welfare Fund
Sergeants Benevolent Association Health and Welfare Fund provides supplemental health and welfare benefits, including a prescription drug benefit, to 10,000 active and retired sergeants of the New York City Police Department.
About IUOE Local 4 Health and Welfare Fund
IUOE (International Union of Operating Engineers) Local 4 Health and Welfare Fund provides a health and welfare plan, including a prescription drug benefit, to 10,000 covered members of IUOE Local 4 and their families. IUOE Local 4 represents heavy equipment operators, apprentices, mechanics, surveyors, equipment house employees, as well as waste water technician and some public sector employees in Eastern Massachusetts, Eastern New Hampshire and Maine.
About Prescription Access Litigation Prescription Access Litigation (PAL) is a nationwide coalition of over 130 state, local, and national senior, labor and consumer health advocacy groups fighting to make prescription drugs affordable. The organizations in the PAL coalition have a combined membership of over 13 million people. PAL, a project of the national nonprofit health care advocacy group Community Catalyst, works to end illegal drug industry practices that increase the price of prescription drugs beyond the reach of the American consumer, using class action litigation and public education. PAL members have filed more than 30 lawsuits targeting such practices. News about PAL’s cases and public education efforts is published regularly on the PAL Blog.
GlaxoSmithKline (NYSE:GSK) sells a popular brand-name prescription drug for migraines, Imitrex. 2007 U.S. sales of Imitrex were $1.12 billion, making it a “blockbuster” in drug industry parlance. A single pill of Imitrex costs about $25.
Glaxo has certainly done its part over the years to preserve its market share on drugs with expiring patents and to prevent consumers from having access to more affordable generic versions, as alleged in several lawsuits that we here at PAL have been involved in (see Relafen and Augmentin, for example).
Well, $1.12 billion in annual sales is too good to just give up, right? Even if Imitrex’s patent is expiring next February? Not surprisingly, then, Glaxo has done a number of things to keep a generic version of Imitrex (sumatriptan) off the pharmacy shelves:
Later this year, Glaxo will begin selling an “authorized generic” version of Imitrex. Authorized generics really should be called “fake” generics, because they’re most often not generics at all, but the company’s own pill technically sold by a different company, under a license. In this case, the shill licensee is Dr. Reddy’s, a generic drug company that originally challenged Glaxo’s Imitrex patent and then settled when Glaxo sued them for patent infringement.
Also later this year (December 2008), Ranbaxy, another generic drug maker, will also begin selling a generic version of Imitrex. Again, this stems from a settlement between Glaxo and the generic maker.
Great, right? Two generic versions of Imitrex will be available by the end of the year! Huzzah! A victory for patients, right?
Not so fast! You don’t think Glaxo is going to let its billion dollar baby leave home so easily, do you?
Introducing GSK’s Treximet! Treximet was just approved by the FDA for acute treatment of migraines in adults.
Is Treximet a fabulous new breakthrough treatment for migraines?
Umm… No.
It is a combination of Imitrex (soon to be available as a generic) and naproxen sodium (commonly known as Aleve, available Over the Counter).
So Treximet is a combination of (a) a soon to be generic drug and (b) an Over the Counter drug. Yet you can be sure that Treximet’s price will be similar to what Imitrex costs right now ($25 a pill) and there’s a good chance it will be more expensive, as new drugs typically are ($30 a pill? More? Who knows?).
How much would it cost a patient to take these 2 drugs separately?
Naproxen sodium can be had for about 8 cents a pill. A single Aleve pill has 220 mg of naproxen sodium. There’s 500 mg of naproxen sodium in Treximet, so a patient would have to take about 2 1/4 Aleve pills to get to 500 mg. Since you can’t really take 1/4 of a pill, let’s assume most patients would take 2. 2 pills would give you 440 mg, so that’s pretty close to the 500 mg. Cost: 16 cents.
We don’t yet know how much generic Imitrex will cost. But the price of a generic typically drops to about 30% of the brand-name’s price within 6 months of the drug’s patent expiring and more generic companies introducing their own versions. So it’s safe to assume that generix Imitrex will cost about $7.50 by middle of 2009. (Even before then, the price of generic Imitrex will begin dropping from the current price of $25 a pill.) Cost: $7.50
So, by spending $7.50 on generic Imitrex and 16 cents on over-the-counter Aleve, you can get the same thing you’d get in a Treximet — which is very likely to cost $25 or more. Why would you bother with the Treximet? I guess it’s fewer pills to take, but is that worth at least $18 in additional cost?
Interesting, Glaxo apparent didn’t even try to compare Treximet to a standalone-combination of Imitrex and naproxen sodium. Their press release on the FDA approval says:
“Treximet provided more patients migraine pain relief at two and four hours compared to sumatriptan 85 mg, naproxen sodium 500 mg or placebo alone.”
In other words, Treximet worked better than just Imitrex, or just naproxen sodium, or nothing at all. This is kind of like saying that a chocolate cake tastes better than eating the ingredients separately (a bowl of flour, a few eggs, some chocolate) or eating nothing at all.
Here’s some other things I think you can safely gaze into the crystal ball to see:
Glaxo’s pharmaceutical salespeople will descend on doctors’ offices like ants at a picnic and aggressively pitch Treximet to doctors of all kinds (neurologists, headache specialists, internists and family physicians).
TV ads will appear in prime time singing the praises of this “new” treatment for migraines. People frolicking through fields of flowers may or may not appear.
Is this the kind of “breakthrough treatment” than PhRMA is always arguing justifies the high cost of prescription drugs?
This type of putting “old wine in new flasks” is straight from Big Pharma’s tired playbook. Instead of engaging in the harder, more long-term process of discovering genuinely new medications, drug companies instead “tweak” existing blockbuster drugs in the most minor of ways, including:
Combining two existing drugs, such as was done with Vytorin (made up of Zocor, which had gone generic, and Zetia)
Making a “extended release” version (once a day, once a month, etc)
Making a “new” version that’s just a chemical tweak of the original but not any better (as Nexium is of the now-generic and over-the-counter Prilosec)
A $125 million settlement has been announced in a major class action lawsuit involving members of the Prescription Access Litigation (PAL) coalition. The case, In re Pharmaceutical Industry Average Wholesale Price Litigation, was originally filed in 2002, and claimed that the defendant drug companies intentionally inflated reports of the Average Wholesale Prices (AWPs) on certain prescription drugs administered in doctors’ offices and paid for by Medicare Part B. The PAL member organizations that are plaintiffs in the lawsuit are:
Until 2006, the published AWP was used to set the price that Medicare and consumers making Medicare Part B co-payments pay physicians for these drug. Private insurance companies and other third-party payors also use the AWP to determine how much to pay physicians. The lawsuit contends that
consumers and third-party payors paid more than they should because of the drug companies’ false AWP reporting.
The settlement includes branded and generic drugs used primarily in the treatment of cancer, HIV and other serious illnesses. Under the terms of the settlement 82.5 percent of the settlement fund is designated for third-party payors’ claims and the remaining 17.5 percent is designated for consumer claims.
The defendants included in today’s settlement are:
Abbott Laboratories
Amgen Inc.
Aventis Pharmaceuticals Inc.
Hoechst Marion Roussel
Baxter Healthcare Corp.
Baxter International Inc.
Bayer Corporation
Dey, Inc.
Fujisawa Healthcare, Inc.
Fujisawa USA, Inc.
Immunex Corporation
Pharmacia Corporation
Pharmacia & Upjohn LLC
Sicor, Inc.
Gensia, Inc.
Gensia Sicor Pharmaceuticals, Inc.
Watson Pharmaceuticals, Inc.
ZLB Behring, L.L.C.
Drugs covered in this settlement include Aranesp, Epogen, Neupogen, Neulasta, Anzemet, Ferrlecit and Infed. A full list of the drugs covered by the settlement is available here.
Medicare Part B recipients, health plans and individuals who paid for these drugs but were not on Medicare will be eligible to receive payments from this settlement once the Court finally approves it. The following types of individuals and entities will be eligible:
Patients on Medicare Part B who paid a percentage (i.e. not a fixed copayment, but 10%, 20%, etc.) of the cost of one of the drugs in the case, taken between Jan. 1, 1991 and Jan. 1, 2005.
Health Plans and other Third Party Payors who paid all or part of a Medicare Part B recipient’s percentage co-insurance for one of the drugs.
Individuals not on Medicare Part B who paid all or part (a percentange) of the cost of one of the drugs taken between Jan 1, 1991 and March 1, 2008.
Health plans and other Third Party Payors who paid all or part of the cost of one of the drugs taken by an individual not on Medicare part B between Jan 1, 1991 and March 1, 2008.
The Court will hold a “preliminary approval” hearing this Friday. If the Court grants preliminary approval to the settlement, notices will be mailed to Medicare Part B recipients and Third Party Payors, and published online and in a variety of national publications. Class members will have the opportunity to file a claim form, object to the settlement, opt out of the settlement or file an appearance with the Court. The court will eventually hold a final hearing to approve all settlement details.
This settlement is the third one announced in this AWP litigation. Iin August 2006, GlaxoSmithKline (NYSE: GSK) agreed to a nationwide $70 million settlement and in May 2007 AstraZeneca agreed to a $24 million settlement to Medicare Part B Zoladex users nationwide. After a trial in late 2006 and early 2007, the court in November 2007 ordered AstraZeneca (NYSE: AZN) and Bristol-Myers Squibb (NYSE: BMS) to pay nearly $14 million to insurance companies and consumers in Massachusetts for the companies’ roles in unfair trade practices. Those companies are appealing that ruling.
The court is expected to set a trial date for remaining claims against AstraZeneca and BMS on behalf of insurance companies and consumers outside of Massachusetts.
Last week, we here at PAL joined 11 other consumer and public interest organizations in filing a amicus curiae (“friend of the Court”) brief in the case of Tafas / GSK v. Dudas et al. Details are below. PAL believes that manipulation of the patent process by pharmaceutical companies has a detrimental effect on consumers’ access to prescription drugs. The brief was written by the Public Patent Foundation, a member of the PAL coalition.
Consumer and Public Interest Groups Back New U.S. Patent Rules That Would Curtail Abusive Behavior By Applicants
ALEXANDRIA, VA – December 20, 2007 – A coalition of consumer advocacy and public interest groups today filed legal papers supporting new U.S. Patent Office (USPTO) rules that would curtail abusive behavior by patent applicants and improve patent quality.
In a friend-of-the-court brief filed in U.S. District Court in Alexandria, VA., the groups urged that an injunction blocking the proposed rules be lifted and they be implemented immediately.
The proposed new regulations ask applicants to justify the need for more than two continuations per application and to assist the USPTO in performing initial technological research on applications that contain an excessive number of claims.
The groups joining in filing the Public Interest Amici brief are: The Public Patent Foundation (“PUBPAT”), Computer & Communications Industry Association (“CCIA”), AARP, Consumer Federation of America (“CFA”), Essential Action, Foundation for Taxpayer and Consumer Rights (“FTCR”), Initiative for Medicines, Access & Knowledge (“I-MAK”), Knowledge Ecology International (“KEI”),Prescription Access Litigation (“PAL”), Public Knowledge (“PK”), Research on Innovation (“ROI”), and Software Freedom Law Center (“SFLC”).
“The public interest overwhelmingly supports the USPTO’s Final Rules for at least two significant reasons,” the brief said. “First, they will enable the USPTO to curtail abuses of the patent application process made by those patent applicants who seek to pervert the system to gain an unfair advantage. Second, the Final Rules will help the USPTO
improve patent quality, which is a critical issue for ensuring the patent system benefits the American public.”
The new rules were to have been implemented by the patent office on Nov. 1, but were blocked by suits brought by drug maker GlaxoSmithKline and inventor Triantafyllos Tafas.
Under current rules which allow unlimited continuations, USPTO examiners who have repeatedly rejected an application often face an endless stream of continuation applications that “may well succeed in ‘wearing down the examiner’, so that the applicant obtains a broad patent not because he deserves one, but because the examiner has neither the incentive nor will to hold out any longer,” according to professor Mark A. Lemley of Stanford Law School and Kimberly A. Moore, now a Circuit Judge on the U.S. Court of Appeals for the Federal Circuit.
Pharmaceutical companies are most likely to use continuations in order to help them keep monopolies over their drugs. According to the publication Nature Biotechnology, from 1995 to 1999, 41% of drug patents issued were based on continuations. In contrast only 22% of the patents issued in mechanical engineering were based on continuations.
The consumer and public interest groups’ brief said the new rules would:
– Curtail abuse of continuation applications and unlimited claiming,
– Help the USPTO improve patent quality, and
– Increase patent office efficiency.
The legal papers, available below, also noted that while briefs filed opposing the new rules claimed they were acting in the “public interest”, in fact they represented the narrow interests of patent holders and patent attorneys.
“Congress has intentionally implemented a patent system that balances the incentives provided to patentees with the benefit to the public of the disclosure and ultimate dedication of the resulting inventions to society,” the consumer groups said. “Thus, the public interest lies in an efficiently functioning patent system, not one that is subject to abuse and manipulation.”
The consumer and public interest groups said that despite having various missions and activities, they are united in their belief that patent law and policy should be crafted to ensure that it benefits the public interest. They “firmly believe that the Final Rules would significantly advance both the general public interest and the specific aspects of the public interest that they each separately exist to represent. Thus, the Public Interest Amici have united in this brief to express a single voice in support of the Final Rules.”
Papers Filed By Public Interest Amici Curiae, Public Patent Foundation et al., in Tafas / GSK v. Dudas et al.
Last week, GlaxoSmithKline (NYSE:GSK) filed an antitrust lawsuit against Abbott Laboratories (NYSE:ABT) for Abbott’s 400% price increase for its AIDS drug, Norvir. Strangely, the complaint was filed over three years after PAL coalition member Service Employee International Union (SEIU) Health and Welfare Fund sued Abbott for substantially the same reasons. Glaxo’s reasons for waiting three years before throwing their hat into the ring is unclear, but it may have something to do with SEIU’s success so far in its case. A group of chain pharmacies filed a similar lawsuit last month (See our post, “Chain pharmacies sue Abbott over Norvir AIDS drug price increase”). As we said about that case:
What took these supermarkets so long? It’s almost 3 years later. The filing of the suit now may have been motivated by the fact that various states have 3 year statutes of limitations (the amount of time you can file a lawsuit after an alleged “wrong” has occurred) for various kinds of claims concerning alleged fraud. Three years would be up in this instance in about a month. These supermarkets may also have seen the progress of the SEIU suit and concluded that they have a viable case as well.
SEIU and several consumers filed a national class action lawsuit against Abbott for increasing the cost of Norvir by an unconscionable 400%. Norvir is a “protease inhibitor” (PI) and was initially used by itself. Later, it fell out of favor as a standalone PI, because of serious side effects. But it became very important because (at a lower dose) it “boosts” the effects of other PIs taken by HIV/AIDS patients when they are taken together. Abbott, in fact, combined Norvir with its own PI in a single “combination” pill, called Kaletra. So patients either take Norvir with other companies’ PIs, or they take Kaletra.
Because of its effectiveness as a booster, other drug companies began designing PIs to be administered specifically along with Norvir. Abbott, by increasing the cost of Norvir by 400%, effectively increased the price of all of competing PIs since each relied on Norvir to be effective. Then, to gain a stranglehold on the market, Abbott left unchanged the price of Kaletra.
Thus, Abbott forced HIV/AIDS patients to choose between paying much more for Norvir and another PI, and switching to Kaletra, a drug that may not be medically appropriate for them. Different PIs are important at different stages of the disease, so switching between them is not just a matter of switching from one equivalent drug to another.
The SEIU lawsuit has successfully overcome motions to dismiss and motions for summary judgment . Earlier this year, the judge granted class certification. A trial is scheduled to take place in June 2008.
While the SEIU case seeks to help patients and health plans who were forced to switch PIs or pay exorbitant prices for competing drugs, Glaxo’s case seeks to recover damages for lost market share and lost profits. Abbott hiked the price of Norvir soon after Glaxo released its PI, Lexiva.
Here at PAL, we’re more concerned with the effect that this price hike had on patients and health plans than its effect on a huge pharmaceutical giant like GlaxoSmithKline. However, the price hike might have affected other drug companies’ interest in developing new protease inhibitors, and thus may also have harmed patients indirectly, as well as directly. A drug company that knows that any new PI it might develop is at a serious price disadvantage compared to Kaletra (because of the artificially high price of Norvir) might decide to put its drug development priorities elsewhere.
The recently filed Glaxo and pharmacy suits mean that there’s now a strange set of bedfellows indeed aligned against the Norvir price hike: consumers, health plans, chain pharmacies and a major brand-name drug company. This “coalition of the overcharged” underscores just how reprehensible Abbott’s price hike was. Glaxo’s suit does thicken the plot considerably. We will keep you posted on further developments.
Consumer Reports, long a critic of drug advertising, recently introduced a new feature on its website: AdWatch. In the first episode, an Associate Editor picks apart the claims made in an ad for GlaxoSmithKline’s (NYSE:GSK) drug, Requip. The ad pitches Requip as a treatment for “Restless Legs Syndrome,” or RLS. RLS, while a real condition, has been massively overhyped by ads for drugs such as Requip. (For an excellent discussion of this, see “Giving Legs to Restless Legs: A Case Study of How the Media Helps Make People Sick” in the free journal Public Library of Science – Medicine) Requip is a drug that was originally used for Parkinson’s Disease.
Here’s Consumer Report’s very clever and thorough deconstruction of the ad:
John Mack reports on the Pharmaceutical Marketing Blog that this critique angered folks at the Restless Legs Syndrome Foundation. Guess who’s a major sponsor of this alleged consumer group? Why, GlaxoSmithKline, of course, the maker of Requip! Here’s what John Mack wrote about this today:
However, CR does have a HUGE readership that I can only dream of! As a result, its attack on Requip drew the attention of the Restless Leg Syndrome Foundation, the supposedly grassroots patient advocacy group with suspicious monetary and corporate ties to GlaxoSmithKline (GSK), the marketer of Requip (see posts cited above).
The RLS Foundation issued this clarion call to its “members”:
“We wanted to apprise everyone on our mailing list of some bad press for RLS. We want to encourage you to ‘fight back’.
“A video on consumerreports.org promises ‘relief from restless legs hype.’ The RLS Foundation is taking a tough stand against this type of bad press for RLS.
“Click here to watch this extremely sarcastic and insulting video for yourself. Then, click here to read the RLS Foundation’s response to this video.
“The RLS Foundation is calling for drastic measures to respond to this video. We aren’t concerned that they are reporting on a drug. We are concerned that they are mocking a condition that so many people live with everyday. We encourage you to respond to this advertisement immediately. If you are a subscriber of Consumer Reports, we encourage you to cancel your subscription….”
We applaud Consumer Reports for its new AdWatch feature and for examining the Requip ad. While RLS is a real condition and some people will get relief from drugs such as Requip, the shameless overmarketing of it through ads like this is enormously harmful. The purpose of drug ads is to expand the market for the advertised drug, to convince as many people as possible that they need a particular drug, even if they don’t actually need it. Since 2005, we have been calling attention to and critiquing particularly troublesome drug ads through our Bitter Pill Awards: Exposing Drug Company Manipulation of Consumers. We’re glad to be in the company of Consumer Reports in our efforts.
The Guardian today reported on GlaxoSmithKline’s (NYSE:GSK) over-the-counter weight loss drug alli (“A bitter pill for slimmers?“) and its possible introduction in Europe. PAL was featured in the article, and in particular the Bitter Pill Award we gave to GSK for introducing alli in the U.S., the “With Allies Like This, Who Needs Enemas? Award”
The article pointed out just how minimal the results from alli are:
Indeed, research found that people who took the 120mg dose of orlistat for a year lost between two and five kilograms more than people who took a dummy treatment. And while the weight might drop off quite quickly in the beginning, the drug doesn’t work for everyone and some will lose more weight than others. Research has also shown that people tend to put the weight back on when they come off the drug. This has led critics to speculate that it is the makers’ intention for people to take Alli long-term – though there is little evidence about how well the drug works in reducing weight for periods of longer than 12 months.
“The additional weight loss people have on this drug is quite minimal and this only lasts as long as they’re on it,” says Alex Sugarman-Brozan, director of the US consumer group, Prescription Access Litigation (Pal). “This isn’t the kind of drug people are supposed to take once and then stop taking. I think GlaxoSmithKlein is hoping and anticipating that people who aren’t disgusted by the side-effects will take it on an ongoing basis.”
One main question about alli is, given people’s general apparent unwillingness to make changes in lifestyle (diet and exercise), why would they make these changes as part of the alli diet plan if they weren’t willing to make those changes due to their own merits?
But some experts suggest that it is difficult enough for people to lose weight under regulated conditions with medical guidance, and are sceptical that many people buying Alli will have the motivation to reap the full benefits. Moreover, there are limited studies looking at the long-term benefits of Alli and research suggests the optimum dose of orlistat is 120mg, three times a day. So why is GlaxoSmithKlein selling something that contains only 60mg?
The company says there is little difference in the effects of the two doses – both are effective in aiding weight loss. Kaplan disagrees. He says that orlistat was never successful when it was only available on prescription. “It’s clearly a business decision. This wasn’t an efficacy decision. If the drug was efficacious it would be a blockbuster drug at 120mg, and it’s not,” he says. “Essentially, it’s a failed prescription drug from a marketing perspective. Here’s a situation where you have a drug that wasn’t a big success-a very modest success as a prescription drug-and they’re hoping, through marketing approaches and direct-to-consumer advertising, that it can be more successful as an over-the-counter drug.”
It is this that has led Pal to award GlaxoSmithKlein one of its Bitter Pill awards, “With Allies Like This, Who Needs Enemas?”
The article goes on to discuss our concern that it will be abused by people with eating disorders. The experted cited, Dr. Kaplan at Mass. General Hospital, disagrees with that concern but seems to miss the point:
Sugarman-Brozan is concerned that people with eating disorders might abuse it – but Kaplan isn’t convinced. He says the drug isn’t effective enough to be abused. In the end, he thinks the market will decide how well Alli works.
This presumes that people with eating disorders will only abuse weight loss drugs that are “effective.” Many people with eating disorders will employ strategies that are dangerous, regardless of their effectiveness, if they merely believe that they will be effective — such as binging and purging, misusing laxatives and the like. And while the modest weight loss that an overweight person would experience with alli might be dangerous additional weight loss in, say, a person with anorexia.
Let us hope that European regulators take a more skeptical look at alli than the FDA did.
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