Patent Attack

When a patent is under challenge, you can cut and run or stay the course. The only trick, then, is to make the right decision.
Apr 01, 2005

Genric Challanges
Until very recently, brand managers could rely on the timing of a patent expiration. Decisions about sales force allotment, marketing and promotion, manufacturing, and long-term product planning were made under predictable environments during launch and mid-lifecycle phases. Likewise, exit strategies could be created with predictable timing: removing sales and marketing support was the last step of the so-called "harvest" phase before the entry of generic competition.

But the dramatic rise in generics manufacturer challenges to brand patents has significantly complicated product management. Now, for many brands—whether they are blockbusters from large companies or small life-blood products for single-product companies—timing certainty has left the product management equation.

Once considered a "legal" problem by brand companies, the in-house legal staff could manage the patent challenge quietly and without interaction from the brand team. Now, many companies face generic challenges for a majority of their product portfolios and a large portion of their revenue. Paragraph IV challenges can no longer be considered a legal problem but instead have become a business and portfolio problem with profound implications. (See "Paragraph IV Primer,")

The good news is that through timing analysis of Paragraph IV certifications, companies can use planning models, such as the ones commonly used in R&D activities, to help manage sales force support, promotion, manufacturing, and product and portfolio planning.

paragraph IV Primer
Not If, but When It is the rare brand-name pharma product whose patents are free from the possibility of generic challenge. A review of annual reports from generics companies such as Teva Pharmaceuticals and Barr Laboratories supports the fact that Paragraph IV filings are simply a matter of doing business and have become a critical part of their core strategies.

As of March 2005, 104 pharmaceutical products were under active patent challenge. Between November 1, 2003 and March 2005, 35 generic challenges were concluded by court opinion or settlement. (These figures include antibiotics and drugs covered by the Drug Efficacy Study Implementation [DESI] program—products that are challenged but not under the Paragraph IV mechanism.)

The rate of acceleration is illustrated in "Generic Challenges." In 2001 and 2002, generics companies filed 35 and 33 abbreviated new drug applications (ANDA), respectively, with Paragraph IV challenges. In 2003 and 2004, they filed 96 and 97 challenges, respectively. (These figures include only those challenges yielding a patent infringement action.)

The trend is not only happening with larger companies such as Teva, Mylan, and Andrx, but it is also becoming a tactical strategy of many smaller generics companies to focus on select products to challenge. At present, approximately 54 generics companies have an active certification pending. Of those companies, 40 have certifications pending on three or fewer products.

Products Under Attack
An ancillary effect of the increase in activity is that many products are receiving certifications by several companies, often in a short time span. For example, there are currently seven generics companies that have filed patent challenges against one or more of Aventis' Allegra (fexofenadine) family of products. In addition, Provigil (modafinil), the flagship wakefulness product from Cephalon, received certification notices from four companies within six weeks time.

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