New Bill Would Limit Pharma's Anti-Generics Arsenal, According to Cutting Edge Information

RESEARCH TRIANGLE PARK, NC--(Marketwire - February 11, 2009) - Proposed legislation aims to take a controversial option away from brand-name drug makers in their fight against generics.

Last week, senators Herb Kohl (D-WI) and Chuck Grassley (R-IA) introduced a bill that would prevent branded drug companies from simply paying generics counterparts to keep cheaper copycat products off the market. The Preserve Access to Affordable Generics Act targets the so-called practice of "pay to delay," in which patent holders reach settlements with generic challengers waiting to market their products. Such settlements tend to involve hefty payouts to the generics manufacturers.

The bill's backers aren't the only parties watching drug makers. A February 2 lawsuit filed by the Federal Trade Commission alleges that Solvay Pharmaceuticals entered into an illegal agreement with generics makers Watson Pharmaceuticals and Par Pharmaceutical. According to the allegations, Solvay paid these companies to delay launching a generic competitor to its own AndroGel, a testosterone drug.

Industry observers, however, say that such "pay-to-delay" agreements are last-ditch options for most firms. The most popular strategies for fending off generic competition, in fact, do not involve generics makers at all.

"Combating Generics" (http://www.PharmaGenerics.com), a report from Cutting Edge Information, shows that better options are rooted not in the courtroom but in the lab. Most companies pursue scientific R&D in an effort to replace their drugs before patents expire.

Convenience means a new formulation retains patients even when the original drug goes generic. Given the option between a branded drug's once-weekly dose and a daily generic, for example, patients and their doctors will favor the weekly drug. "Combating Generics" shows that 53% of companies pursue new formulations, making it the most popular counter-generics option.

The real prize is a next-generation drug that fully replaces the old product. Although such development is inherently risky, it also offers one of the most effective means of fighting off generic competitors. Half of the companies surveyed by Cutting Edge Information were pursuing next-generation R&D.

"At a basic level, deals with generics makers are anathema to branded pharma companies," said Eric Bolesh, research manager at Cutting Edge Information. "These firms are scientific innovators, and they're eager for R&D-based options. Improving on a drug is option A, and it's usually option B, too."

To download a brochure of "Combating Generics," go to http://www.PharmaGenerics.com.

Contact Information: CONTACT INFORMATION: Eric Bolesh 919-433-0209