Claritin 2: Schering Plough loses Claritin Patent Protection
August 9, 2002
By GARDINER HARRIS
Staff Reporter of THE WALL STREET JOURNAL
A federal judge threw out Schering-Plough Corp.’s legal defense of its patent on the blockbuster allergy drug Claritin. The ruling allows generic-drug companies to begin selling cheap copies of the drug by Dec. 19.
In a written statement, Schering-Plough said it “disagreed with and would appeal” the decision to dismiss its case.
Although most analysts believed that the Kenilworth, N.J., drug maker had almost no chance of winning its suits against 15 generics makers, some believed that the company might have persuaded U.S. District Judge John W. Bissell of the District of New Jersey to hold a trial on its claims. A trial could have delayed the generics’ launch by a year or more, bringing Schering-Plough billions in extra revenue and precious time to convert Claritin users to Clarinex, the company’s almost identical follow-on pill that has years more protection against generics.
In a similar case, AstraZeneca PLC has gained almost a year’s delay to generic competition for its huge-selling ulcer drug Prilosec, because a trial court is still weighing various patent claims surrounding the drug. The delay has given AstraZeneca another $3 billion in revenue and needed time to switch Prilosec users to Nexium, a newer and very similar drug.
Thursday’s decision means there will be no Claritin trial. Schering-Plough’s appeal may still delay generics, but at most such a delay would be weeks instead of months or years.
“We’re very pleased with the judge’s decision,” said Joseph Hynds, a lawyer for generic maker Mylan Laboratories Inc.
After barreling through the 1990s as one of the hottest companies in the industry, Schering-Plough has been floundering for the last two years. The biggest concern is its looming loss of the Claritin franchise, the source of one-third of its sales and nearly half of its profits. The company had hoped to launch Clarinex at least two years before the earliest possible end of its exclusive hold over Claritin to provide the time to convert patients to the new, protected pill.
But manufacturing problems led the U.S. Food and Drug Administration to delay its approval of Clarinex for nearly a year. Those problems continue, and the company expects to pay at least a $500 million fine to the agency to put the controversy to rest.
To rescue at least some of Claritin’s sales, Schering-Plough has said that it will turn Claritin into a store-bought, over-the-counter drug sometime this year. The move will reduce drastically its profits from the drug because nonprescription pills are generally much less expensive than prescription drugs. But the company may now be able to establish a store-bought brand — like Motrin, Advil or Tylenol — that will persist for decades. Wyeth and Johnson & Johnson have announced intentions to launch their own over-the-counter versions of Claritin.
An advisory panel to the Food and Drug Administration recommended recently that Claritin be sold over-the-counter. The FDA is expected to approve the switch soon. After the approval, all versions of Claritin-branded or generic-would be nonprescription.
The patent on Claritin expired June 19, but the company won a six-month extension by testing the drug in children. Schering-Plough had hoped to extend its exclusive hold over Claritin to 2004 and beyond because of a related patent on a chemical cousin of Claritin, the Clarinex patent.
Clarinex is created in the human body when people swallow Claritin, and Clarinex’s patent expires in 2004. Schering-Plough argued that anyone swallowing a generic version of Claritin would create Clarinex in their body without the company’s permission. By selling their Claritin knockoffs, generic manufacturers would induce patients into undertaking this infringement, Schering-Plough argued, and such inducement is illegal.
This argument has been used by other drug makers — and dismissed by other judges. Indeed, the previous dismissals helped sink Schering-Plough. Judge Bissell on Thursday granted a motion for summary judgment filed by generics makers.
Schering-Plough has now all but exhausted its many efforts to extend the life of its prescription Claritin franchise. During the 1990s, the company poured millions into an unsuccessful lobbying effort to win special congressional approval for a patent extension, arguing that delays at the FDA cost Claritin years of sales. As part of this effort, the company lent its corporate jet to Sen. Orrin Hatch (R., Utah) so he could pursue a presidential bid.