U.S. Looking at SmithKline Effort to Block Generic Drug

December 7, 2000 - The Federal Trade Commission is investigating whether SmithKline Beecham, the British drug company, has engaged in illegal trade practices by keeping competitors from selling generic, lower-cost versions of Paxil, its popular antidepressant, according to court papers.

Several generic drug makers have filed applications with the Food and Drug Administration to sell low-cost versions of Paxil, which had sales of $1.4 billion in the United States last year. The only antidepressants with greater sales were Prozac, made by Eli Lilly, and Zoloft, made by Pfizer.

The disclosure of the F.T.C. inquiry came in a filing on Tuesday in Federal District Court in Chicago by lawyers for the Apotex Corporation, one of the companies that wants to make a generic version of Paxil. The F.T.C. confirmed yesterday that it was conducting "a preliminary inquiry," but would not discuss any details.

In their filing, lawyers for Apotex asked Judge Charles P. Kocoras, who is presiding in a suit brought by SmithKline to block sales of generic Paxil, to make public two documents that Smithkline has demanded be kept confidential.

The documents, they said, disclose "a conscious and considered plan by SmithKline to erect barriers to the entry of generic competition for Paxil." The lawyers contend the documents are "necessary and relevant" to both the F.T.C.'s investigation and a lawsuit that Apotex has filed in Washington that says SmithKline is illegally blocking Apotex from selling generic Paxil.

Brian L. Jones, a spokesman for SmithKline, said yesterday that the company had not broken any laws and, instead, was simply taking legal measures to protect its rights to Paxil, which it believes is covered by valid patents.

"SmithKline Beecham has been asked to voluntarily supply documents to the F.T.C.," Mr. Jones said. "We are cooperating."

Apotex, the largest drug maker in Canada, has been trying to sell generic Paxil in the United States since 1998. The company says that its version would sell for about 35 percent less than Paxil. The average retail price for Paxil is now about $2.34 a day, according to Apotex.

Under federal law, drug companies generally have 20 years from the date a patent application is filed to sell the drug exclusively.

SmithKline's main patent on Paxil does not expire until 2006. But Apotex says that patent does not cover the slightly different version of the drug that it wants to sell.

"We're thoroughly convinced that we don't infringe that patent," said Hugh L. Moore, a lawyer at the Chicago firm of Lord, Bissell & Brook, which represents Apotex.

Apotex says that SmithKline has illegally blocked it from selling the generic drug by filing numerous additional patents relating to Paxil with the F.D.A. Each of those patents, which the F.D.A. lists in a document known as the Orange Book, has the potential to delay Apotex's sales of generic Paxil by 30 months.

In recent months, other drug companies, facing the expiration of their patent protection on brand-name drugs and efforts by generics makers to sell lower-cost versions, have also filed additional patents. Those filings, by companies like Bristol- Myers Squibb and Pfizer, have raised suspicions among regulators that the brand-name companies are trying to use a loophole in federal law to keep generic drugs off the market.

In September, the F.T.C. said that it was investigating whether Bristol- Myers illegally colluded with another company to keep a generic version of Taxol, a top-selling cancer drug, off pharmacy shelves.

Apotex filed a petition with the F.D.A. in February, saying that SmithKline had "systematically and unlawfully used the statutory and F.D.A. patent listing procedures to stifle generic competition."

Mr. Jones, the SmithKline spokesman, said that the F.T.C. had asked for documents relating to the numerous patents on Paxil that SmithKline has filed with the F.D.A.. But he said that the company had properly handled those new patents. The federal patent office had reviewed and issued the patents, he said.


By MELODY PETERSEN
Copyright 2000 The New York Times Company
http://www.nytimes.com/2000/12/07/business/07DRUG.html

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