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posted by LaminatorX on Sunday December 14 2014, @08:19AM   Printer-friendly [Skip to comment(s)]
from the good-drugs dept.

Andrew Pollack reports at the NYT that a federal judge has blocked an attempt by the drug company Actavis to halt sales of an older form of its Alzheimer’s disease drug Namenda in favor of a newer version with a longer patent life after New York’s attorney general filed an antitrust lawsuit accusing the drug company of forcing patients to switch to the newer version of the widely used medicine to hinder competition from generic manufacturers. “Today’s decision prevents Actavis from pursuing its scheme to block competition and maintain its high drug prices,” says Eric Schneiderman, the New York attorney general. “Our lawsuit against Actavis sends a clear message: Drug companies cannot illegally prioritize profits over patients.” The case involves a practice called product hopping where brand name manufacturers (“product hoppers”) make a slight alteration to their prescription drug (PDF) and engage in marketing efforts to shift consumers from the old version to the new to insulate the drug company from generic competition for several years. For its part Actavis argued that an injunction would be “unprecedented and extraordinary” and would cause the company “great financial harm, including unnecessary manufacturing and marketing costs.” Namenda has been a big seller. In the last fiscal year, the drug generated $1.5 billion in sales. The drug costs about $300 a month.

Related Stories

Pfizer to Buy Allergan for $160 Billion in Biggest Ever Pharma Deal 13 comments

Pfizer has agreed to buy Allergan, Plc for $160 billion:

US drugs giant Pfizer has agreed a deal to buy Botox-maker Allergan for $160bn (£106bn), making this the biggest pharmaceuticals deal in history. The merger will create the world's biggest drugmaker, to be called Pfizer.

Allergan shareholders will receive 11.3 shares in the merged company for each of their Allergan shares. Analysts have suggested the deal will allow Pfizer to escape relatively high US corporate tax rates by moving its headquarters to Dublin. Last year, Pfizer made an offer to buy UK drugs group AstraZeneca, which rejected the offer, arguing it undervalued the company.

Aside from Botox, Allergan also makes the Alzheimer's drug Namenda and dry-eye medication Restasis. Pfizer makes that-which-cannot-be-named, nerve pain treatment Lyrica, and pneumonia treatment Prevnar. According to the Wall Street Journal:

Pfizer said it expects to buy back about $5 billion in shares in the first half of next year under an accelerated program.

The merger will create a pharmaceutical behemoth, with top-selling products including Pfizer's Prevnar pneumonia vaccine and Allergan's anti-wrinkle treatment Botox and industry-topping R&D budget. The company's drugs and vaccines would cover a range of diseases, from Alzheimer's to cancer, eye health to rheumatoid arthritis.

The deal brings together two pharmaceutical powerhouses with more than $60 billion in combined sales. Last year, Actavis, which bought Allergan and took its name, had more than $13 billion in sales, while Pfizer had nearly $50 billion in revenue.

[...] Pfizer and Allergan said that after the deal closes, the combined company will decide on splitting into two businesses, one focused on patent-protected products and the other on drugs that have lost their patent protection or are close to losing it. It expects to make that decision by the end of 2018.

Related: Judge Rules Drug Maker Cannot Halt Sales of Alzheimer's Medicine - Drug maker Actavis, Plc tried to replace Namenda with a new, patented form. The company changed its name to Allergan, Plc by June 15, 2015.


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  • (Score: 2) by Bot on Sunday December 14 2014, @09:28AM

    by Bot (3902) on Sunday December 14 2014, @09:28AM (#125917) Journal

    this is it.

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  • (Score: 5, Insightful) by frojack on Sunday December 14 2014, @10:06AM

    by frojack (1554) Subscriber Badge on Sunday December 14 2014, @10:06AM (#125919) Journal

    From TFS: The old form of Namenda, a tablet taken twice a day, is expected to face generic competition starting in July.

    So basically, they wanted to discontinue the old drug which loses patent protection within 6 months, and get people on the new one (which does have some slight additional benefits). They had 6 months to pull off this scheme.

    I would think that the Judge could have ruled that they had to waive the remaining life of their patent (a "taking", but only for 6 months), rather than ruling that they had to continue to market the drug against their will.

    I can see why this is in fact unprecedented.
    Sure their motive was more profits. So what?

    Doctors could switch their patients back to generics in 6 months. Doctors don't always play the stooge for drug companies.
    Or the Judge could force the licensing of the old patent sooner.

    But telling someone they Must Manufacture something they don't want to manufacture is pretty unusual. Far worse then stripping them of a patent, it strips them of their freedom. Its sort of like slave labor. As TFS says: "No court has ever commandeered a manufacturer’s means of production solely to help the manufacturer’s competitors.”

    I don't see this ruling as constitutional in any way. Be careful what you cheer for. When a court tells you that you can't change jobs because your old company needs your services, you might hearken back to some overreaching state's attorney general re-instituted slavery in the name of the greater good.

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    • (Score: 1, Interesting) by Anonymous Coward on Sunday December 14 2014, @10:31AM

      by Anonymous Coward on Sunday December 14 2014, @10:31AM (#125921)

      They're not changing jobs; they were just going to slightly modify something so they could get a new monopoly over a procedure enforced by government thugs.

      Get rid of patents and you'll see competition. No need for this nonsense. Just let the free market work.

      • (Score: 1, Insightful) by Anonymous Coward on Sunday December 14 2014, @12:50PM

        by Anonymous Coward on Sunday December 14 2014, @12:50PM (#125932)

        You can't just get rid of patents in the pharmaceutical industry and expect there to be more drugs.
        Do you think drugs are made by magic or that the invisible hand will swoop down and do all the synthesis, candidate screening, toxicology, pre-clinical trials, and clinical trials for free just so companies can compete on manufacturing the final product?

        • (Score: 0) by Anonymous Coward on Sunday December 14 2014, @03:19PM

          by Anonymous Coward on Sunday December 14 2014, @03:19PM (#125951)

          Also, most current business strategies revolve around patents, simply because businesses are going to take advantage of whatever they can. Get rid of patents and new (or old) business strategies would emerge. There is zero scientific evidence that patents are even effective at their goal (which is to help society).

          The problem is that freedom is what's most important. Patents infringe upon basic private property rights, so as a freedom-minded individual, I would completely oppose them even if they did help 'better' society.

        • (Score: 3, Funny) by fadrian on Sunday December 14 2014, @03:31PM

          by fadrian (3194) on Sunday December 14 2014, @03:31PM (#125952) Homepage

          Are you seriously saying that the free market can't solve everything? You must be a Commie!

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        • (Score: 1) by melikamp on Sunday December 14 2014, @06:55PM

          by melikamp (1886) on Sunday December 14 2014, @06:55PM (#125969) Journal

          You can't just get rid of patents in the pharmaceutical industry and expect there to be more drugs.

          No one needs more drugs. We need better, cheaper healthcare.

          Do you think drugs are made by magic or that the invisible hand will swoop down and do all the synthesis, candidate screening, toxicology, pre-clinical trials, and clinical trials for free just so companies can compete on manufacturing the final product?

          Drug manufacturers shouldn't be in testing business anyway: they have an obvious conflict of interest. If clinical trials are subsidized from taxes, what makes you think pharmaceutical companies won't be able to pay off R&D without patents? Have you heard of the "first mover" advantage? What about all the drugs that get developed in universities? What about big pharma's obsession with symptom relief, when what we need are cheap cancer cures? Finally, what about using research from other countries? Unlike with patenting drugs, there is no ethical concern here. I wouldn't worry about the fate of pharmaceutical research in the absence of intellectual monopoly.

          • (Score: 0) by Anonymous Coward on Sunday December 14 2014, @11:42PM

            by Anonymous Coward on Sunday December 14 2014, @11:42PM (#126036)

            Pathogens evolve and become resistant to chemical countermeasures.
            There is a continual need for new antibiotics.
            Now, if lazy physicians would stop giving improper pills to people with VIRAL infections, that would help as well.

            Flu strains are denoted by names such as H18N11.
            That's right, there are 18 possible H type antegens and 11 possible N type antegens. [wikipedia.org]
            By my count, that makes 198 possible permutations.
            As a result, Flu shots are reformulated each year according to what appears to be coming.
            I don't have a problem with the folks who take care of that making a buck.

            Chemotherapy (poisoning the whole body and hoping the bad shit dies first) is barbaric.
            Targeted therapies based on genetic techniques are a vast improvement.
            (Allowing a gene to be patented, however, is insane.)

            We need better, cheaper healthcare.

            Yup--and if USA would copy any civilized nation's implementation (or a create a system that takes the best of each), we could start moving away from our third-world status.

            It's the corporate/lawyer tricks to which I most strongly object.

            The practice of corporations burying unsuccessful therapy trials is something I find perverse.
            As a recent story here noted, that is becoming more difficult. \o/

            -- gewg_

        • (Score: 3, Interesting) by HiThere on Sunday December 14 2014, @07:45PM

          by HiThere (866) on Sunday December 14 2014, @07:45PM (#125976) Journal

          I'm not convinced that the patents on drugs are worth the bad effects in the current system. As someone else said, there is a clear conflict of interest in drug companies validating the drugs that they are going to sell. The current system, were it designed, would have been poorly designed unless the goal was to foster corruption among the drug companies.

          That said, this is a clear instance where there is required to be a large up front investment, the kind of thing patents should work best at. Perhaps the solution is for the owner of the drug patent to be required to license the same patent to all purchasers at the same rate (without specifying what the rate is). But that's not clearly specified, and nailing down the details would be essential. Perhaps there should also be a requirement that the holders of the patents not themselves be the manufacturer of the product. Perhaps the government should pay for testing, and charge a tax on patented medicines to pay for the testing.

          Someone in a slightly different context asserted that any centralized control was only a chokehold point for arbitrary control. I would strike the only, but the rest of the point is valid. So there would need to be an oversight of the testing process and procedures. Open records (with anonymization of patients) would probably be essential, but possibly not sufficient. Etc.

          However, this is a use case where I think patents really are appropriate. Just not as applied.

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        • (Score: 1, Informative) by Anonymous Coward on Sunday December 14 2014, @09:01PM

          by Anonymous Coward on Sunday December 14 2014, @09:01PM (#125987)

          This particular drugs is a good example for abolishing patent....

            Mematine is available pure as a fine chemical since the 1970s...
          I know about it since it is a nice substitute to Phencyclidine (PCP) and a damm good antidepressant , it can be purchased in bulk at a about 10$/g for 10g to 20g from suppliers on Alibaba. The bulk of the research on it's effects on alzheimer was done by the Harvard school of Medicine, Forest only licensed the patent before being bought by actavis, a former generic drugs company...

        • (Score: 2) by c0lo on Monday December 15 2014, @01:55AM

          by c0lo (156) Subscriber Badge on Monday December 15 2014, @01:55AM (#126051) Journal

          You can't just get rid of patents in the pharmaceutical industry and expect there to be more drugs.

          You reckon? There are hundreds of medical research institutes living from donation and govt grants (the bulk of financing the research joint I'm working for comes from private donations).
          Many of them have a "translation" dept (how the discoveries can be translated in products on the market)

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    • (Score: 4, Informative) by Paradise Pete on Sunday December 14 2014, @10:43AM

      by Paradise Pete (1806) on Sunday December 14 2014, @10:43AM (#125922)

      Turns out waiving the remaining patent (my thought as well) wouldn't fully solve the problem. If the patient has been prescribed a medication for which a generic equivalent is available then the pharmacy can make the substitution. By changing the formula the company makes the generic no longer equivalent. Why couldn't doctors prescribe the generic? I don't know. Perhaps that's a side effect of drug advertising; people become convinced they need a specific named drug. Before advertising was permitted doctors chose what to prescribe - now patients tell their doctors. If the pharmacy can't say it's the same as the generic they won't be willing to switch.

      I'm not defending the decision, but that's the problem they're trying to address.

      • (Score: 0) by Anonymous Coward on Sunday December 14 2014, @01:48PM

        by Anonymous Coward on Sunday December 14 2014, @01:48PM (#125941)

        I know from firsthand experience that customers will go with the brand name drug at 50 times the price rather than the generic in most cases, even after explaining that it is the same chemical in the same quantities. It even occurs with the generic equivalents where a customer will demand the "blue" generic pill rather than the "red" pill which is exactly the same but has another dye in it. It goes as far as junkies buying drugs on the street but demanding their specific brand of drug, based on what is arbitrarily perceived as best in their circle of friends.

      • (Score: 2) by sjames on Sunday December 14 2014, @05:18PM

        by sjames (2882) on Sunday December 14 2014, @05:18PM (#125961) Journal

        Further, it's not as if another manufacturer can just start cranking out the generic the next day. They are probably already planning to start production at or near the expiration date of the patent. Moving that date up by 6 months won't move the generic availability up.

        • (Score: 2) by frojack on Sunday December 14 2014, @09:24PM

          by frojack (1554) Subscriber Badge on Sunday December 14 2014, @09:24PM (#125995) Journal

          Sure they could.
          They can get their generic approved ahead of time.
          They could have a warehouse full of the drug.

          They just can't sell one single pill until the patent expires.
          They can claim that this manufacture is for testing and in preparation for their regulatory requirements, because the US has a "research"
          safe harbor clause.
          http://en.wikipedia.org/wiki/Patent_infringement#United_States [wikipedia.org]

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          • (Score: 2) by sjames on Monday December 15 2014, @01:37AM

            by sjames (2882) on Monday December 15 2014, @01:37AM (#126048) Journal

            Yes, and what they are doing probably is all timed out to go on sale in June, not tomorrow.

            • (Score: 2) by bob_super on Monday December 15 2014, @10:41PM

              by bob_super (1357) on Monday December 15 2014, @10:41PM (#126333)

              6 months at $1.5B/year?
              If you're the only "generic" supplier for 6 months, you could easily pocket 10-50% of that. You'll find that a lot of things can happen if the take is 75 to 375 millions...
              Heck, even the Indian Space Agency would get involved, that's one more Mars mission right there!

      • (Score: 2) by frojack on Sunday December 14 2014, @09:08PM

        by frojack (1554) Subscriber Badge on Sunday December 14 2014, @09:08PM (#125990) Journal

        Changing the formula only applies to the NEW drug. It does not pertain to the OLD drug.
        Two different drugs.

        The doctor can simply prescribe the OLD drug, (or generic) and let the pharmacist dispense the generic.

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    • (Score: 3, Insightful) by sjames on Sunday December 14 2014, @04:32PM

      by sjames (2882) on Sunday December 14 2014, @04:32PM (#125957) Journal

      Considering that they were already in production and enjoying the high margins afforded by a boon from the government, it's not as if they have some huge start-up cost. They also aren't required to give the drug away or sell at cost suddenly, they get to keep charging what they have been charging.

      So it's more akin to community service than slavery. Perhaps they'd prefer the corporate equivalent of jail. That is, no profitable activity of any kind for 6 months and if you lose the house, too bad.

      • (Score: 2) by frojack on Sunday December 14 2014, @09:16PM

        by frojack (1554) Subscriber Badge on Sunday December 14 2014, @09:16PM (#125994) Journal

        We don't know anything about their current profit on this old drug, only that they expect to see considerable competition for it by july.
        (The story give sales figures, which do not equate to profit). Since they have no competition now, I expect they are making a hansom profit.)

        They could jack the price over the next 6 months.
        They could drop the price over the next six months and fill the supply chain to suppress orders for the competitors.
        They could simply match the price of the new drug and let the market sort it out.
        They could drop the price of the new drug and thereby kill any incentive for generics to get into business.
        They could manufacture just enough to keep it in the catalog.

        There are lots of ways to end-run the Judge. The proper way is to appeal his ruling on the basis that it is unconstitutional, and there was no crime committed.

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        • (Score: 2) by sjames on Monday December 15 2014, @01:29AM

          by sjames (2882) on Monday December 15 2014, @01:29AM (#126047) Journal

          We can be fairly certain they're making a profit. If it can't be made profitably, there wouldn't be any competition lining up.

          There are a lot of dick moves available to them in addition to the one the judge said no to, but there are also regulations that may cover some or all of them. They chose to enter a regulated industry (where availability is one of the regulations) and to benefit a great deal from special protections and status for several years. They don't get to abuse that special advantage.

          If they want to continue the abuses, perhaps we need a second source law for drugs to keep it in check.

      • (Score: 1) by schad on Monday December 15 2014, @04:17AM

        by schad (2398) on Monday December 15 2014, @04:17AM (#126078)

        So it's more akin to community service than slavery.

        I'm not a fan of community service, either. As an alternative to a fine or jail time or probation or any number of other possible punishments, sure. But there is a difference, to me, between the government (or anyone else) telling me I cannot do something, and being told that I must do something. I think the bar for justifying the latter is, or at least ought to be, quite a bit higher.

        One interesting thing the government could've done would be to grant the patent to somebody else. Just for the last six months, of course, but it might still screw up the launch of the new drug. I'm definitely a fan of the "use it or lose it" approach to patents: if you don't want to take advantage of your government-granted monopoly, then the government should feel free to revoke said monopoly early. Though we would need to be careful to ensure that small inventors don't get locked out of producing or selling their inventions specifically so that the patent will be revoked.

        • (Score: 2) by sjames on Monday December 15 2014, @05:08AM

          by sjames (2882) on Monday December 15 2014, @05:08AM (#126091) Journal

          Revoking the patent wouldn't help in this case though. It appears several companies already have a plan underweigh to start selling in June. They probably can't make it happen much sooner at this point, patent or no patent.

          I can understand discomfort with community service, but it is worth considering that in theory (practically never enforced), a corporate charter is supposed to be permitted only when it is in the public interest in the first place. On top of that boon, they also have made a bajillion bucks due to their patent (another boon). Surely it's not too much to ask that they at least pretend to compete fairly.

  • (Score: 1) by PartTimeZombie on Monday December 15 2014, @02:13AM

    by PartTimeZombie (4827) Subscriber Badge on Monday December 15 2014, @02:13AM (#126054)

    This is just a short term solution.
    Aside from the problems with this ruling that other posters have pointed out, the drug company will just do what any other industry group or wealthy company does in the US and purchase the legislation needed to solve their problem.

  • (Score: 2) by jasassin on Wednesday December 17 2014, @05:17AM

    by jasassin (3566) <jasassin@gmail.com> on Wednesday December 17 2014, @05:17AM (#126755) Journal

    Senile Judge Rules Drug Maker Cannot Halt Sales of Alzheimer’s Medicine, Forgets To Strike Gavel, Then Pisses And Shits Himself.

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