Blocking generics

Video: Patient pulls apart a Delzicol capsule to reveal a tablet

By Markian Hawryluk / The Bulletin / @markianhawryluk

Published Jul 28, 2013 at 05:00AM

Two years ago, Erin Matlock spent six months trying different medications to control her newly diagnosed ulcerative colitis. Some didn't work very well, others were too expensive.

The 37-year-old elementary school teacher from Redmond finally settled on a drug called Asacol, an effective therapy that her health insurance would cover.

But in June, she learned Asacol was being pulled from the market by the manufacturer, replaced by a similar drug called Delzicol.

“That was hard,” she said. “It's so difficult to find what will work for you and have everything change.”

Her doctor wrote a new prescription for Delzicol, which came in a purple capsule. Asacol had been a reddish-brown tablet. The new capsule was difficult for her to swallow, and she could hear something rattling around inside it. She broke open the capsule and found inside a tablet that looked suspiciously like her old Asacol pills.

“When I laid the two side by side, they were exactly the same,” she said. “The same color, the same size, the same weight, everything.”

That left Matlock and dozens of other ulcerative colitis patients wondering whether Delzicol was truly a new drug or a shell game meant to stave off generic competition. Was this a new and improved drug or just another example of a drug company making minor changes to extend the life of a top-selling brand-name product?

The drug's manufacturer, Dublin-based Warner Chilcott, had only changed an inactive ingredient in the drug and stuck the pill inside a capsule, according to Food and Drug Administration documents.

With no new clinical trials, the company secured an expedited review from the FDA and got Delzicol approved six months before Asacol was due to go off-patent. By pulling Asacol from the market, they could get doctors to begin writing prescriptions for Delzicol and patients established on it well before a generic Asacol arrived.

The move allowed Warner Chilcott to secure a patent for the outer capsule, giving them a tool to defend Delzicol from generic competition for another seven years.

Whether by coincidence or by design, the switch from tablet to capsule form sets up a significant roadblock for any generic company that had been working to bring a generic Asacol to market, effectively protecting a franchise worth nearly $500 million in annual sales.

Pharmaceutical companies maintain that the changes to brand-name drugs represent innovations that give patients better products or new medication options. Consumer advocates argue that such moves are a blatant manipulation of the patent system, which drive up costs for patients and the health care system.

“Is that what Americans really think a patent is?” asked Laura Etherton, a Portland-based health care policy analyst with U.S. PIRG, the federation of state public interest research groups. “They're taking advantage of the fact that when we think of a drug patent, we're thinking of the active ingredient, the thing they've invented, the thing we want them to do that's actually helpful.”

Theoretical risks

Online discussion boards for ulcerative colitis patients have been buzzing with skepticism over the Asacol-Delzicol switch. The Food and Drug Administration declined The Bulletin's requests for an interview, but shared documents describing the rationale for approving Delzicol as a new drug. According to those documents, Asacol's enteric coating was designed to dissolve at a certain pH level, allowing the pill to travel through the digestive system intact until it reached the colon.

But the coating included a chemical, dibutyl phthalate, or DBP, a type of plasticizer that FDA has been trying to get out of pharmaceutical products for some years. When given to laboratory rats at ultra-high doses, DBP caused developmental delays and birth defects. Although the agency was unsure if DBP had any clinical effect in humans, it pushed manufacturers to reformulate their drugs with other compounds.

In 2009, FDA asked Procter & Gamble, which manufactured Asacol at the time, to remove DBP from the product. The following year, the company sold its product line to Warner Chilcott. Warner covered the Asacol tablets with a different plasticizer, placed it inside a capsule, renamed it Delzicol and filed for approval as a new drug.

Prior to pulling Asacol off the market, Warner also changed the product's labeling to include the theoretical risk of defects. Delzicol was approved in February on the basis of bioequivalency studies showing the drug dissolves at the same rate as Asacol. According to the FDA documents, “no new safety or efficacy trials were conducted by the applicant using the proposed capsule product.”

But the documents make no mention of why the Delzicol tablet was inserted into a capsule, and Warner Chilcott did not respond to requests for an interview.

According to Joe Fazio, assistant director of pharmacy services at Oregon Health & Science University, the use of a capsule may have been in response to reports that Asacol had been dissolving too quickly in the digestive system, causing problems for patients.

“What the manufacturer did was put a capsule around it to delay that dissolving until it did hit the colon,” Fazio said. “To me as a pharmacist, it seems like a rational justification to change that formulation, however superficial it may seem.”

That explanation, however, does not ring true to patients like Matlock, who say the capsule falls apart easily in their hands. And many patients reported the opposite problem, that Asacol came through their digestive system partially or completely intact. According to Asacol's product labeling, about 2 to 3 percent of patients experience that problem.

It is unclear from the FDA-provided documents whether Warner ever tested the new formulation of Delzicol without the capsule, or how the capsule affects the delivery of the medication to the colon.

Sara Horst, a gastroenterologist with the Vanderbilt Digestive Disease Center and a spokesperson for the Crohn's & Colitis Foundation, said such drugs are difficult to perfect because patients can have different pH levels in different parts of their digestive system. Sometimes it takes trial and error to determine which medication and what dose will work best for each patient. Doctors have generally been switching Asacol patients to a similar dosage of Delzicol, although Horst said the change provides an opportunity to discuss other possible treatments as well.

Protecting brands

Patients may be able to take brand-name alternatives to Asacol with the same active ingredient, mesalamine, and many of those offer more convenient dosing, such as taking one pill instead of three or four. But insurance companies often negotiate preferred pricing for one of the brand-name drugs in a class, leaving patients the choice of taking that drug for just the cost of a $15 to $25 copay or paying hundreds of dollars a month for a non-preferred brand-name drug.

Generics, on the other hand, are identical to the brand-name drug at a fraction of the cost. So when a brand-name drug's patent expires, the cost of the medication for patients can drop as much as 90 percent. That is usually devastating for the sales of the brand-name drug, which is why drug companies vigorously defend whatever patent is still in effect.

When a company applies to bring a generic to market, the FDA notifies the brand-name manufacturer, which can then sue the generic for patent infringement. By law, the FDA must then delay approval of the generic for up to 30 months while the court sorts out the patent issue.

“Unfortunately, there are too many mechanisms that allow litigation to drag on,” said Wells Wilkinson, project director for prescription access litigation at Boston-based consumer interest group Community Catalyst. “It's reasonable that after two and a half years, even if they litigated hard, they still may not have a resolution.”

Once the 30-month delay expires and the FDA approves the generic, the companies will often reach a settlement in which the brand-name manufacturer pays the generic company not to bring a generic to market. Last month, the U.S. Supreme Court ruled that such pay-for-delay arrangements could be the basis for antitrust lawsuits.

“The industry has had a history of presenting very weak patents and then litigating to protect these weak patents for as long they can,” said Daniel Berger, an attorney with Philadelphia-based law firm, Berger & Montague. “Because if you can delay generic entry for six months, that's worth billions of dollars.”

Berger is currently involved in a lawsuit filed by Mylan Pharmaceuticals and several large drug purchasers alleging anti-competitive practices by Warner Chilcott. The suit claims that Warner intentionally moved its acne medication Doryx from one form to another three times in order to stymie Mylan's efforts to launch a generic. Just as Mylan was preparing to launch a generic version of Doryx in 2005, Warner switched the product from capsule to tablet form. Because generics must be identical in dosage and form to the brand-name drug, it forced Mylan to scrap its capsule and start over on a tablet form. The following year, Warner sought a change in labeling for Doryx allowing it to be broken into pieces and sprinkled over apple sauce. Again Mylan had to reformulate its generic to match, delaying it for another 6 to 12 months. Warner then introduced a scored tablet, which delayed generic competition back until the end of 2010. The roadblocks succeeded in delaying generic competition for five years.

As long as the company can effectively switch the market from its old formulation to the new formulation before a generic arrives, the strategy does not even require an active patent. Because a generic must contain the same dosage and form as the brand-name for a pharmacist to fill a prescription for a brand-name drug with a generic, a product switch can effectively eliminate substitution at the pharmacy counter. That barrier undercuts the market for a generic, which generally does not have a heavy marketing budget.

A similar tactic was taken by the drug company Abbott to squeeze more profits out of its cholesterol drug Tricor. As generics were preparing to enter the market in 2001, Abbott introduced Tricor 2, tweaking the available dosages from 67 and 134 mg pills to 54 mg and 160 mg pills. Three years later, Abbott introduced Tricor 3, in 48 mg and 145 mg doses, just as a generic Tricor 1 was entering the market. After another four years, Abbott launched Trilipix, switching from tablet to capsule form.

Generics were always one step behind, and were never able to drive down the price for consumers. According to an article published in the Archives of Internal Medicine in May, the multiple reformulations of Tricor are costing the U.S. health care system $700 million each year.

Mylan's suit claims such moves represent an antitrust violation and the Federal Trade Commission agrees.

“Such tactics, often referred to as product hopping, can be an effective way to game the regulatory structure that governs the approval and sale of generic drugs, thereby frustrating the efforts of federal and state policymakers to facilitate price competition,” the FTC wrote in an amicus brief filed in the Doryx case.

The FTC, however, has no say in whether the FDA can approve a new drug or whether the Patent and Trademark Office issues a new patent for meaningless change of a drug. The commission could sue in cases of product-hopping, but the agency has limited resources and must pick its battles.

Same tactics

Now Warner seems to have dusted off its product-hopping playbook for Delzicol.

“You take the tablet and you put it in a capsule, and you call it a new drug,” Berger said. “It's the typical circus and charade that the brand manufacturers are involved in. The game is to engage in whatever shenanigans, stratagems or whatever you can do to postpone the day of generic entry.”

As Asacol was removed from the market, the company stepped up its marketing efforts to shift as many former Asacol patients to Delzicol as possible. Now even if a generic Asacol tablet emerges, the market has already moved on to the capsule form. Whether by coincidence or by design, the switch has extended the life of the brand.

“Will any generic firm bother to market a generic version of Asacol, if no doctor is prescribing it any more?” asked Scott Hemphill, a law professor with Columbia University in New York. “The usual path is to take advantage of automatic substitution. But once the product switch has been accomplished, there may be no Asacol prescriptions left to switch.”

Warner also sells an 800 mg extended-release tablet, Asacol HD, that contains the same enteric coating as in Asacol. Warner holds a patent on that formulation that won't expire till 2021, and has not yet reformulated the drug or pulled it from the market.

Part of the problem, said Dr. Michael Carome, director of the health research group at Washington, D.C.-based consumer advocacy group Public Citizen, is the FDA doesn't take into account whether a new drug, like Delzicol, truly represents a step forward when granting approval.

“The law doesn't require that they do that,” he said. “It did meet the requirements for the approval of a new drug despite not being a major innovation. It really isn't an innovation at all, and there are probably better products out there.”

Analysts who track Warner Chilcott believe the motivation for the switch is more financial than clinical.

“It's definitely an attempt to delay generic competition,” said David Krempa, an analyst with Morningstar in Chicago. “We don't even know if there would be generic competition here if the patent expired, but this is another preventive measure to help them in case there would have been.”

The FDA does not reveal which companies have filed applications for generics, but according to financial and legal filings, at least three companies have started down that road, and Warner Chilcott has settled at least one Asacol patent case.

The company did not respond to The Bulletin's requests for comment. But in a conference call with analysts in February, transcribed by the website Seeking Alpha, Warner CEO Roger Boissonneault was asked about how the switch would impact a generic competitor. The description seemed to match closely the product-hopping scenario outlined by the FTC.

“Generally, the generic doesn't even get launched because the reference product will be Delzicol,” he said. “There won't be any Asacol out there. We've seen that happen with Doryx, when the generic company got the product approved. And by that time, the product had moved on ... As the reference product has changed and then moved on to either tablet or new dose form, there really isn't much to be substituted there.”

That will likely leave patients paying higher drug prices for Delzicol for a number of years until a generic emerges. That is, unless the company moves the goalposts back again.

Matlock now pays $25 a month for her Delzicol. She would have to pay $125 a month for Apriso, another brand-name mesalamine product, which would cut the number of pills she has to swallow daily from 12 to four. She would likely pay only $8 if a generic were available.

“I would really like just to be able to get what my doctor feels I need,” she said.

Extending profits

Pharmaceutical drug manufacturers have used a variety of strategies to extend the life of their brand-name drugs and ward off generic competition. None are expressly illegal, although some may violate antitrust laws.

New formulations

Changes in the formulation of a drug to a new dosage, a new form (tablet or capsule) or an extended-release version can provide a new patent for an existing drug. To the extent companies can shift patients to the new formulation, they can stay one step ahead of generic manufacturers even without an enforceable patent.

Molecular differences

Most active drug ingredients can exist in multiple molecular structures. Some drug companies have been able to take an active ingredient that is losing its patent protection, and isolate only one form of its molecular structure and patent that as a new drug. In some case, the companies can isolate a molecular structure that is more effective than the mixture of multiple structures in the original drug.

New uses or indications

Manufacturers can secure additional patents when their drugs are shown to work for new indications or conditions. Companies often pursue the easiest indication first to get the product on the market, then get additional indications approved over time.

Combinations

By combining two drugs into a single pill, drug companies can create “new” medications and secure new patents. Companies can combine multiple drugs that have lost patent protection and patent the combination.

Source: Biopharm International, Alton and Byrd LLP