Pharmaceutical Executive-07-01-2002

In a closely watched patent case that has important implications for pharma companies, the Supreme Court ruled unanimously in May to uphold policies that protect patent holders from imitators. The decision, in what is considered one of the most significant patent disputes to come before the court, is expected to benefit brand-name companies that bring patent infringement cases against generics makers.

As part of an aggressive campaign against the rising cost of medicines, AARP, the national advocacy group for Americans over 50, joined three class-action lawsuits against pharma companies involving alleged anticompetitive efforts to block generic competition and inflate prices.

Setbacks sometimes prompt a great leap forward. For Sankyo, a major product withdrawal-most painfully, of its potential blockbuster for diabetes, Rezulin (troglitazone)-created the reversal. Major liver effects appeared in the market

This season, boosterism is out; hedging is in. Yet a realistic assessment of the pharma market, even under the shadow of terror and war, reveals new opportunities. For every ominous sign or setback, a potential line of offense exists. Despite the press of a slow economy, nervous investors, customer consolidation, and cost-shifting in healthcare, the industry remains rich in resources, growth, and opportunity. Here are some of the market forces, issues, and opportunities for the pharma universe this year:

With the huge costs of developing a new drug from scratch and the high attrition rates as lead compounds fail during the trials process, in-licensing has become an increasingly popular method for pharma companies to boost their pipelines without all of the outlay involved in de novo research.

FDA has issued the industry a new charge-pay closer attention to risk management. Now that prescription drug user fees have helped the agency approve candidates more rapidly, FDA has returned to its basic mandate: assuring that marketed pharmaceuticals are safe. In the past, that meant clear labeling with adequate directions and warnings based on clinical trials. The agency now believes that product safety extends beyond warning labels and wants to ensure that prescriptions are used safely as well. As a result, it is asking the pharma industry to demonstrate products' safety before approval and to further control their use after

A former Warner-Lambert employee has blown the whistle on the company's "shadowing program," alleging that some physicians accepted money in exchange for allowing pharma sales representatives to meet with patients, review charts, and recommend prescriptions. According to the lawsuit, Warner-Lambert-since acquired by Pfizer-tried to boost sales of its epilepsy drug Neurontin (gabapentin) by tracking prescriptions and rewarding high-prescribing physicians with gifts such as cash, trips to resorts, and lucrative speaking and consulting jobs-as well as paying them to enter patients in clinical trials. The program allegedly paid 75-100 US doctors at least $350 per day to let sales reps watch

The decoding of the human genome and its potential to open the door to cures for AIDS, cancer, and many other conditions that today are incurable are likely to shapethe healthcare industry for decades to come.

In today's legal climate, pharmaceutical companies are prime targets for litigation in both state and federal courts. Because they are engaged in product research and development and related complex business practices spread across many jurisdictions and because the public perceives the industry as having deep pockets, executives must be prepared for-and frankly must expect to face-the challenges of major multijurisdictional litigation.