Lilly's Prozac patent ruled invalid

October 1, 2000

Pharmaceutical Representative

The U.S. Court of Appeals, Federal Circuit in Washington, D.C., has ruled in favor of Pomona, NY-based Barr Laboratories Inc.'s double patenting claim against the patents protecting Indianapolis-based Eli Lilly and Co.'s Prozac® (fluoxetine HCl) anti-depressant. The decision strikes down the patent that would have expired in December 2003; however, the Court of Appeals affirmed the decision of the lower court with respect to the expiration of the patent in February 2001.

The U.S. Court of Appeals, Federal Circuit in Washington, D.C., has ruled in favor of Pomona, NY-based Barr Laboratories Inc.'s double patenting claim against the patents protecting Indianapolis-based Eli Lilly and Co.'s Prozac® (fluoxetine HCl) anti-depressant. The decision strikes down the patent that would have expired in December 2003; however, the Court of Appeals affirmed the decision of the lower court with respect to the expiration of the patent in February 2001.

"We are pleased that after a thorough review the court recognizes the importance of restricting add-on patents solely designed to extend the patent life of blockbuster drugs at the expense of consumers," said Bruce L. Downey, Barr's chairman and chief executive officer.

Barr said the decision should clear the way for generic competition as early as February 2001.

Lilly regroups

"Clearly, we are disappointed with the appellate court's ruling, and I have instructed our attorneys to appeal the decision," said Sidney Taurel, Lilly president and chief executive officer. "Going forward, we have developed a detailed plan of action through which Lilly will continue to deliver innovative products and earnings growth performance even if we experience the loss of this patent."

Assuming the ruling is not overturned, Lilly expects that the financial impact of the entry of generic fluoxetine will be spread over two calendar years - 2001 and 2002. "We'll likely see earnings declines in the second half of 2001 and the first half of 2002," said Charles E. Golden, executive vice president and chief financial officer for Lilly. "However, continued strong underlying growth of our current newer products, coupled with the expected launches of a number of new products and indications in 2001 and 2002, will lead to a return to earnings growth in the second half of 2002."

According to New York-based industry analyst Datamonitor, Lilly will likely appeal to the Food and Drug Administration for a further six months of exclusivity for Prozac's pediatric use. If it is granted, generic Prozac will not be available until August of 2001.

Datamonitor believes the influx of cheap fluoxetine will have a negative effect on other pharmaceutical companies as well as Lilly. "Big fish in the antidepressant market, such as Pfizer and SmithKline Beecham, will also experience problems dealing with cheap fluoxetine," said a Datamonitor release. "Pfizer's Zoloft, although the most prescribed antidepressant in the US, is seeing growth slow considerably and will suffer the most from the launch of generic Prozac." PR