Techdirt. Stories filed under "generics"

How Big Agribusiness Is Heading Off The Threat From Seed Generics -- And Failing To Keep The Patent Bargain

Glyn Moody — Mon, 15 Apr 2013 03:52:24 PDT

Recently we wrote about how pharmaceutical companies use "evergreening" to extend their control over drugs as the patents expire. But this is also an issue for the world of agribusiness: a number of key patents, particularly for traits of genetically-engineered (GE) organisms, will be entering the public domain soon, and leading companies like Bayer, BASF, Dow, DuPont, Monsanto and Syngenta are naturally coming up with their own "evergreening" methods.

A new report from the ETC Group, which describes itself as working "to address the socioeconomic and ecological issues surrounding new technologies that could have an impact on the world's poorest and most vulnerable people", offers an interesting view of how the big agribusiness companies are trying to do that (pdf).

Making its position quite clear, ETC calls the approach "philanthrogopoly" -- a "charity" cartel that is designed to assuage fears that they represent an anticompetitive oligopoly, while simultaneously ensuring that real control remains with the agribusiness companies even after key patents have expired:

The Gene Giants know their market dominance looks conspicuously like an anticompetitive oligopoly, so they’re launching a series of initiatives -- including the false promise of cheap, post-patent GE seeds -- to mollify antitrust regulators and soften opposition to transgenics while advancing their collective market control.

Here's the problem that "philanthrogopoly" claims to address: The looming crisis, according to the Gene Giants, is that when patents on biotech traits expire, the breeders who want to use these generic traits must have biosafety approval from the government authorities where they plan to export the GE commodity or cultivate the GE seeds. If biosafety authorizations are not kept up-to-date -- even for tiny traces of expired traits -- entire barges of transgenic beans, containers of biotech cotton or maize risk being rejected in Rotterdam, Dalian, or Yokohama. For US and other farmers who depend on exports of GE commodity crops, the presence of unauthorized generic traits could be devastating, according to industry. For example, one quarter of all US soybeans are exported to China, and 95% of those beans are genetically engineered. An estimated 93% of GE soybeans in the United States contain a Monsanto trait that goes off-patent in 2014.

The complexity, however, is not just the biosafety review process; it's also the fact that re-registration requires legal access to the proprietary safety testing data initially submitted by one of the Gene Giants to government regulators. (For the Gene Giants, safety data are considered "confidential business information" and a protected trade secret -- it's not something they're accustomed to sharing, especially with competitors.) Without access to the proprietary information, the cost of bringing generic biotech crops to market would be prohibitive.
So what do the top players here propose in order to address this issue? They have come up with what they call, rather dramatically, "the Accord", which includes an option for patent holders to continue to oversee biosafety approval for their GE seeds, either alone, or working with other companies. As ETC points out, this is likely to lead to even closer cooperation among the leading agribusiness giants, which already have extensive cross-licensing agreements with each other.

One thing that the Accord will not lead to is a flood of low-cost seeds produced by generics companies, as has already happened in the world of pharma, with huge knock-on benefits for the world's poor. For that to happen, the key safety testing data held by the agribusiness giants would need to be available. And despite the reasonableness of requiring companies to do that -- after all, if they want people to eat their products, they should be prepared to release the scientific evidence it is safe to do so -- that's not likely to happen unless they are forced to by governments.

Another factor making it extremely unlikely that we will see many seed generics is the dense web of patents that now envelope GE varieties, as ETC explains:

In the words of Randy Schlatter, DuPont Pioneer's senior manager of intellectual property: "What growers may not realize is that even though the trait patent expires, there are a host of other intellectual property patents on those varieties that are just as strong." In an interview with DTN/Progressive Farmer, Schlatter observed: "If there is a [first generation genetically engineered] soybean in the market today that is truly generic and not protected by a patent of some sort, I've not been able to find it." DuPont Pioneer, the world's second biggest seed company, has more than 225 patents covering its portfolio of soybean seeds -- not just on transgenic traits -- but on breeding technologies, germplasm and conventional ("native") traits. Even if a single transgenic trait goes off patent, the maize or soybean variety that contains the trait is likely the subject of a complex web of intellectual property. The two dozen patents on biotech seed traits that will expire over the next decade are dwarfed by the thousands of existing patents on traits, seeds and varieties

This is similar to some of the approaches to evergreening in the pharma industry -- adding extra, patented features to older technologies as the latter enter the public domain. The net result is the same for both drugs and crops: the patent "bargain" with society, that a time-limited, government-backed monopoly is granted in return for allowing anyone to use the invention freely at the end of the patent term, is not being kept fully. Once more, the public is shortchanged.

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Court Says Pfizer May Be Liable For Side Effects Of Drug, Even Though Man Took Non-Pfizer Generic Version

Mike Masnick — Wed, 6 Feb 2013 23:57:57 PST

An interesting case in the Alabama Supreme Court has ruled that a man who developed a movement disorder (tardive dyskinesia) after taking a generic version of the drug Reglan can sue Pfizer, the maker of Reglan, even though it did not make the actual generic he had taken (he took generics from both Actavis and Teva, both of whom he's sued as well). This one is a tricky one on the question of secondary liability, thanks to the oddities of the pharmaceutical world. While, naturally, it sounds absurd that Pfizer can be sued for a drug it didn't make, the regulatory world makes it slightly more complicated -- in part because current law says that generic drug companies could not be sued over failures in labeling of risks, because they're basically copying the labels from the brand name manufacturer. Other courts have ruled that the brand name manufacturers can't be sued -- so in theory that could leave the takers of generics with no legal recourse if there were failures to accurately label the drugs they took. Given that, it seems slightly more reasonable to think the brand manufacturer may be more responsible for what's on the label -- but since they can't monitor quality control of the generic, the whole thing seems like quite the legal muddle all around.

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Pharma Companies Try 'DRM' For Drugs As A Ploy To Stymie Generics

Glyn Moody — Wed, 16 Jan 2013 13:19:09 PST

One of the striking features of the drug world is how pharma companies become noticeably more inventive immediately before their patents are due to run out and their drugs are about to enter the public domain. That's because they need to find a way to differentiate themselves from the generic manufacturers that are then able to offer the same medicines for often vastly lower prices.

Usually this takes the form of modifying the formula of a drug slightly, patenting it, and then seeking to convince the medical profession that the new formulation is better in some way. But sometimes it involves more novel approaches, as here:

In coming months, generic drug producers are expected to introduce cheaper versions of OxyContin and Opana, two long-acting narcotic painkillers, or opioids, that are widely abused.

But in hopes of delaying the move to generics, the makers of the brand name drugs, Purdue Pharma and Endo Pharmaceuticals, have introduced versions that are more resistant to crushing or melting, techniques abusers use to release the pills' narcotic payloads.

As the New York Times article quoted above reports, having introduced these "tamper-resistant" designs, the pharma companies are now pushing to get a ban on generic versions that lack this feature. If you think of "tamper-resistant" techniques as a kind of DRM for drugs, the pharma companies are effectively asking for their own version of the DMCA, which forbids the circumvention of DRM.

The drug companies have dressed this up as a service to society, but some aren't buying it:

While companies like Purdue Pharma insist the public's health is their main concern, others note that producers introduced tamper-resistant versions of their products just as the drugs were about to lose patent protection. In court papers filed in response to Endo’s lawsuit, the F.D.A. described the company's action as a "thinly veiled attempt to maintain its market share and block generic competition."

There's no doubt that the abuse of painkillers is a significant problem, but according to another recent story, in The Washington Post, alarming levels of addiction to OxyContin and similar painkillers may be partly the drug companies' fault. For instead of warning doctors about this issue, the latter were assured that there were "minimal risks of addiction and dependence" if they prescribed these kinds of drugs for their patients: according to a Washington Post examination of key scientific papers, a court document and FDA records, many of those claims [about minimal risks] were developed in studies supported by Purdue Pharma, the maker of OxyContin, or other drug manufacturers. In addition, the conclusions they reached were sometimes unsupported by the data, and when the FDA was struggling to come up with an opioid policy, it turned to a panel populated by doctors who had financial relationships with Purdue and other drugmakers.
So it would seem that rather than mandating the use of tamper-resistant packaging for these kinds of painkillers, a better long-term solution would be to avoid the use of these drugs altogether, where possible.

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Historic Ruling Against First Modern Drug Patent In India

Glyn Moody — Tue, 11 Dec 2012 00:09:00 PST

As Techdirt has reported over the last year, the Indian government is becoming increasingly keen on using cheaper, generic versions of important drugs to treat diseases, rather than paying Western-level prices its people can ill afford. Intellectual Property Watch reports on another instance of the Indian authorities easing the way for low-cost versions by striking down a patent granted to Roche for the treatment of Hepatitis C. As the article explains, it's notable for at least two reasons:

the patent granted to Roche in 2006 was the first product patent on a medicine in India after the country switched to a product patent regime for medicines as mandated by the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). It is also India's first successful post-grant opposition case.

Getting rid of the first modern drug patent in this way neatly symbolizes the country's aggressive new attitude to Western-held monopolies on medicines. It's interesting that in this case the opposition came not from the Indian government, but from Sankalp Rehabilitation Trust, a non-governmental organization, which hopes to source the drug from a manufacturer of generics cheaply enough to be able to give it away for free. This may well inspire post-grant opposition from other organizations seeking to provide cheaper drugs to the sick in India through the use of generic versions.

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Court Reverses: Paying Competing Drug Companies Not To Compete Is An Antitrust Violation

Mike Masnick — Thu, 19 Jul 2012 03:09:42 PDT

A few years ago, we wrote about a ridiculous situation in which big pharmaceutical companies were keeping prices artificially high by paying other drug companies to delay entering the market with generic drugs. The really scary part about this was that the big pharma companies would abuse patent law to force smaller drug companies into these deals. They'd file a patent infringement lawsuit, where they knew they had no leg to stand on, but the infringement filing forces the smaller generic maker into negotiations, where they often agree to a "license" which includes the delay -- but the money flows in the opposite direction of a typical license. In other words, the whole lawsuit and the license is basically a sham to try to hide the agreement to prevent competition in the market. And, of course, as you probably know, when there's no generic competition, drug makers are able to charge absurdly high prices for their drugs. As soon as there's competition, the price often falls by more than 90%. Thus, the big drug companies have plenty of incentive to buy off the competition like this.

Many people have believed that such deals are clear antitrust violations -- and a lawsuit against big pharma Schering-Plough (owned by Merck) tested this theory, only to be dismissed by the district court. That original ruling really twisted logic in a few knots to come to its conclusion -- and the good news is that, two years later, the 3rd Circuit appeals court has reversed the ruling. The ruling is long, but interesting. It starts out by noting that other court's ruling on this matter seem to take the concept of "patent validity" way too far. As we've discussed in other contexts, patent validity says that you have to assume a patent is valid -- but in these cases, the court notes that this unfairly biases the situation in which the bogus patent infringement lawsuits are filed to extract these "pay-for-delay" deals.

First, we take issue with the scope of the patent test’s almost unrebuttable presumption of patent validity. This presumption assumes away the question being litigated in the underlying patent suit, enforcing a presumption that the patent holder would have prevailed. We can identify no significant support for such a policy. While persons challenging the validity of a patent in litigation bear the burden of defeating a presumption of validity, this presumption is intended merely as a procedural device and is not a substantive right of the patent holder.... Moreover, the effectively conclusive presumption that a patent holder is entitled to exclude competitors is particularly misguided with respect to agreements – like those here – where the underlying suit concerned patent infringement rather than patent validity: In infringement cases it is the patent holder who bears the burden of showing infringement.

The court then discusses the Hatch-Waxman Act, which is at the heart of these disputes, noting that its intent (to increase availability of generics) seems to be the exact opposite of what happens with these pay-for-delay deals. But where it gets interesting is that the court says that having one company pay another to delay market entrance should be seen "as prima facie evidence of an unreasonable restraint of trade." This is definitely a big ruling -- though its potential disagreement with other courts may get this issue over to the Supreme Court before too long.

It's nice to see the court get it right after the lower court seemed so confused by the issue.

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Generics Drive Down Drug Prices In India, TPP Trying To Stop That

Glyn Moody — Wed, 23 May 2012 20:01:00 PDT

Back in March, we wrote about an important development in India, where a compulsory license for Bayer's Nexavar anti-cancer drug was granted. Bayer, of course, is fighting back:

in its 37-page appeal to the Intellectual Property Appellate Board, Bayer has "demanded the withdrawal of the country’s first compulsory license given to Natco Pharma, arguing that a three-fourths reduction in the price of the anti-cancer drug by another Indian firm has made the permit redundant and its patent itself is vulnerable to being revoked," the Economic Times, India’s leading business newspaper, reported on 19 May. Bayer says CIPLA’s new price "will render Natco’s price unreasonable and defeat the purpose of compulsory licensing," according to the newspaper.

As that shows, there's been an interesting twist in this story. Cipla, another Indian manufacturer of generics, has announced that it too is coming out with a version of Nexavar, pricing it at $125 for 120 tablets. That's even cheaper than Natco's price of $163, to say nothing of Bayer's $5,128 for the same course. A key difference is that India's Patent Controller has granted a compulsory licence to Natco, but not to Cipla. In fact, Bayer has said that it is taking Cipla to court over its production of a cheap version of Nexavar.

Bayer is employing some very strange logic here. On the one hand, it is saying that Cipla's cheaper version of Nexavar means that Natco's licence is no longer needed, and should be revoked. On the other, Bayer is suing Cipla because it has produced Nexavar without the compulsory license that Natco has. Clearly, Bayer hopes to get the best of both worlds -- the revocation of Natco's compulsory licence, and a court ruling against Cipla, which would leave Bayer once more as the only supplier of Nexavar.

Bayer seems to be trying to make that outcome more palatable by emphasizing that it has already reduced the price of Nexavar for some people:

Bayer stresses that to facilitate access for patients to innovative treatments, it has had a Patient Access Programme in place since the launch of Nexavar in India in 2008. Bayer says that this programme, last expanded in April 2012, reduces the price for the monthly treatment with Nexavar for qualified persons to about a tenth of the regular pharmacy price (Rs 280,000 or $5,128) for the complete duration of treatment.

But it's not clear how many patients have actually benefited from this program. And in any case, the reduced price of $512 per 120 tablets is still three times higher than Natco's pricing, which would put it out of the reach of many poorer patients. Compulsory licensing, by contrast, has driven down the price to $163, and maybe even to $125 if Cipla is allowed to offer it too. In other words, the availability of indigenous alternatives has caused the price to drop from completely unaffordable levels to ones that are more realistic for the India market -- exactly as generics are supposed to do: Health advocates and cancer patients are happy that the fight between the big brand-name pharmaceutical producers and local generic drug makers is making cancer drugs cheaper. The vast majority of Indians don’t have any form of health insurance and out of pocket payments continue to be among the highest in the world. Cancer has also become one of the ten leading causes of death in India today. It is estimated that there are nearly 2 – 2.5 million cancer cases at any given point in time in the country.
Against that background, provisions in TPP that will make it much harder for local manufacturers to produce low-cost generics legally are troubling. They represent a clear attempt by the US to prevent the kind of access to vital patented drugs that India's compulsory licensing has permitted. Western pharmaceutical companies and their shareholders may rejoice if that happens, but many of those in emerging economies who are unable to afford life-saving medicines will die as a result.

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Another Boost For Generics: Brazilian Judge Annuls Patent On Key AIDS Drug

Glyn Moody — Fri, 23 Mar 2012 01:23:36 PDT

Last week Techdirt reported on an important decision in India to allow the production of a generic version of a kidney and liver cancer drug, with huge savings for the Indian health system, and major effects in terms of lives likely to be saved. Now Intellectual Property Watch has news of a court case in Brazil that could have equally important consequences for the local use of generics:

Word is spreading of a recent decision by a Brazilian judge to annul a patent on a key AIDS drug, effectively allowing less expensive generic versions into the country, and calling into question other such patents.

Here's why the case is setting a precedent: A leading feature of the case is that the patent was granted under the "pipeline" process, which allowed "revalidation" of patents granted in other countries while Brazil was modifying its patent law for certain new areas including pharmaceuticals.

The judge in this case ruled that the pipeline process was unconstitutional, according to sources.
The "pipeline" process refers to a mechanism for granting patents in technological fields that had earlier been excluded under Brazilian law, using the date of the first filing for patents elsewhere. This allowed companies to extend the reach of patent monopolies already obtained outside Brazil without needing to go through that country's patent application process.

Lack of constitutionality had been raised back in 2008 because of the way that pipeline patents diminished the public domain:

"The concession of pipeline patents also violates the acquired right of the collectivity by removing from the public domain knowledge belonging to everyone, which once again goes against society’s interest," said Renata Reis, an attorney at the non-governmental Brazilian Interdisciplinary AIDS Organization.

Among the drugs that were removed from the public domain by the pipeline process is the ritonavir/lopinavir combination, the subject of the judge's order annulling Abbott Laboratories' patent. Not surprisingly, the company has said that it will appeal the decision. But if the ruling is upheld it may lead to other patents granted to drugs through the pipeline process being invalidated too.

Taken together with the Indian decision, this latest ruling emphasizes the increasingly important role of generics in global healthcare. That's another reason why both ACTA and the Trans-Pacific Partnership agreement are problematic.

ACTA, for example, allows generics to be seized in transit on the basis of complaints about names that are "confusingly similar" to a brand-name drug. TPP, meanwhile, would bring in a range of measures to make it substantially harder for companies to produce generic versions of patented drugs in signatory nations. The divergence between what the BRICS countries are doing in this area, and what plurilateral treaties like ACTA and TPP seek to mandate, is another reason why it is unlikely the former will ever sign up to the latter.

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'War' On Fake Drugs Really An Excuse To Boost Big Pharma; Putting The Poor At Risk

Mike Masnick — Wed, 9 Feb 2011 06:44:07 PST

We've pointed out similar things before, but Oxfam has come out with a new report, claiming that the claims from developed nations about the need to fight "fake drugs," is quite frequently really just an excuse to protect big pharma firms from generic competition. No one is denying that actual fake drugs can potentially be harmful. But, the problem is that the various efforts, including ACTA, to deal with the issue often lump together actual dangerous fake pharmaceuticals with drugs that are simply cheaper but perfectly safe. Oxfam would like to see a legitimate strategy for getting the real fake drugs out of the market, but says the current strategies are all about boosting patent protections, increasing prices for the poor and developing nations and better protecting big pharma against upstart competitors.

The European Union and the United States continue to focus almost exclusively on eliminating counterfeit medicines which form only a small part of this public health problem -- but which are a serious concern for their multinational companies. They have used the crisis in medicine quality in developing countries as an excuse to push for new intellectual property rules that will boost the profits of pharmaceutical giants at the expense of affordable medicines for the poor.

Of course, this becomes important when you realize that ACTA was specifically designed to pressure developing nations into adopting these types of new, more stringent patent and copyright laws. Oxfam is hoping that those countries won't be bullied:

At a time when poor countries struggle to ensure that their populations can get affordable, quality medicines it is outrageous that rich countries and drug companies are pushing 'solutions' that will do more harm than good to patients and public health. It is critical that poor countries ignore rich-country pressure, and focus instead on solutions that will ensure both quality and affordability of medicines.

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Drug Rep Accidentally Admits There's No Justification For Massive Markup Over Generics

Mike Masnick — Thu, 30 Sep 2010 00:12:43 PDT

Ever wondered why brand name drugs are so much more expensive than generics? Well, so did one Reddit user, who asked what magical qualities made a branded pill worth $500 when the generic was available for $10, and got back a response he wasn't expecting (found via Consumerist), as the rep accidentally emailed him the question that the rep meant to email a superior: In other words, there's simply no good reason. Of course, the monopoly rents afforded to the branded drug maker through patents probably helps. Combine that with the amount of money dumped into highly questionable and dangerous advertising, and you get a bit closer to the answer...

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Kenya's Anti-Counterfeiting Act Challenged As Violating The Right To Health

Mike Masnick — Wed, 30 Dec 2009 07:01:00 PST

As a bunch of countries continue to negotiate ACTA, the Anti-Counterfeiting Trade Agreement, in secrecy, Kenya already has its own Anti-Counterfeit Act. Michael Geist points us to the news that that particular law is now being challenged in Kenya for violating peoples "right to health." The issue is worth following, because it will almost certainly become an issue assuming ACTA moves forward. Whenever we discuss ACTA, it's inevitable that someone stops by to say that anti-counterfeiting is really, really important to stop dangerous counterfeit drugs from being sold, potentially harming people. Now, I have no doubt that counterfeit drugs may be a serious problem -- but if that's the problem, we should target a narrow attack on that problem alone, not some wider "anti-counterfeiting" effort.

We've already seen that lobbyist-funded and promoted reports on the "counterfeiting problem" are widely exaggerated, and any real "problem" is much smaller than the numbers that get tossed around. Furthermore, recent studies have shown that counterfeit products quite frequently lead to purchases of the real product in the future (i.e., people aren't "fooled" into buying counterfeits -- they know they're buying counterfeits). But that's with things like luxury goods. What about drugs?

Well, we've already seen that big pharmaceutical companies conveniently like to use anti-counterfeiting laws not to stop dangerous counterfeit drugs, but to destroy legitimate generic drugs. It's not about making sure that drugs and people are safe -- but quite the opposite. It's about limiting competition so that these pharma firms can jack up prices even higher.

And that's the issue in Kenya. About 90% of the drugs in Kenya are generics -- for a very good reason. Those drugs are much cheaper and are helpful in saving many lives. The Kenyan anti-counterfeit law makes counterfeiting a criminal issue, rather than a civil one, and gives the power to police and border officials, who have no way of knowing counterfeit from generic, so often label generic drugs as being counterfeits. There are plenty of good reasons to try to stop counterfeit drugs from hitting the market, but if that's the real problem, any solution should be narrowly focused on that specific problem. Unfortunately, since it's quite often the big pharmaceutical lobbyists who help write and push through these bills, that's not how it works at all.

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Pay-For-Delay Agreements Again Show How Pharma Abuses Patent Law To Harm Us All

Mike Masnick — Mon, 7 Dec 2009 05:30:00 PST

We've discussed in the past how pharmaceutical patents actually tend to slow down the development of better healthcare solutions, and earlier this year, we mentioned how the EU was growing increasingly concerned about how patent holders were abusing their patents to try to prevent generic competitors from entering the market. Recently, US FTC officials have noticed the same thing and are trying to do something about it -- but are facing tremendous (well organized and well financed) pushback from pharmaceutical lobbyists (the kind who are able to get more than 40 Congressional reps, on both sides of the aisle, to repeat talking points into the Congressional record with no shame).

At issue is the fact that the big pharma firms are paying off generic drug makers to keep them from entering the market -- which in any other market would be a clear anti-competitive activity. How do patents fit into the equation? Well, the big pharma companies are suing the generics for patent infringement, but know they don't have any legal leg to stand on. The filing of the lawsuit is basically just a negotiating ploy, bringing the generic manufacturer to the table. If there were actual infringement, then the generic maker could be barred or would have to pay up. Instead, the money flows the other way. The two parties settle in a "pay for delay" pact, whereby the patent holder pays off the generic maker to stay out of the market, even if there's no real infringement. This basically grants the patent holder extra monopoly time on a drug, which can be worth billions, but makes drugs significantly more expensive for everyone.

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