| When OxyContin Caused the Pain |
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peterj
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| When OxyContin Caused the Pain |
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http://www.stamfordadvocate.com/business/scn-sa-purdue1mar05,0,4646230.story?page=3&coll=stam-business-headlines
When OxyContin caused the pain: A diversifying Purdue Pharma hopes to regain control of its flagship drug
By Julie Fishman-Lapin
Staff Writer
March 5, 2006
Few companies know pain the way Purdue Pharma does. For years, the connection between pain and Purdue was the Stamford company's flagship medication, OxyContin, a time-released painkiller used by cancer patients and chronic-pain sufferers.
Last year, pain at Purdue Pharma became a visceral feeling that permeated the inner workings of a company that today is a shell of its former self.
In January 2004, Purdue Pharma lost the first round in a legal pursuit to halt a generic version of OxyContin when Endo Pharmaceutical Holdings won its lawsuit that Purdue Pharma's patents protecting OxyContin until 2013 were unenforceable.
When an appeals court agreed in June, Endo, as well as other generic drug makers, quickly began marketing generic versions of the drug.
The impact on Purdue Pharma was swift and severe. OxyContin had contributed about 80 percent to the company's annual net sales, and the cheaper generics were rapidly stealing market share.
Management slashed 1,863 jobs, representing more than half of Purdue Pharma's employees. And the Tresser Boulevard pharmaceutical company has lost $1 billion in revenue since the court ruling, about half its annual gross sales, said Michael Friedman, president and chief executive officer.
The decline in branded OxyContin sales happened more slowly than Purdue Pharma anticipated, but the ultimate effect was the same, Friedman said.
Along with the job cuts, "The loss of revenue has caused us to dramatically reduce our drug discovery abilities," he said. "Our research capacity has dropped by about 80 percent."
The company's drug discovery unit in Cranberry, N.J., went from 154 people to 27. And its other research facility in Ardsley, N.Y., went from 331 employees to 37, Friedman said.
"We've pretty much mothballed the place. So it has just been profound," he said.
A court's mistake
Good news has been hard to come by for Purdue Pharma. But a court decision last month that vacated the June 2005 ruling against the company's OxyContin patents has given it a glimmer of hope -- and some vindication.
The U.S. Court of Appeals has sent the case back to a federal trial in New York to determine whether Purdue Pharma's patents are enforceable. All along, Purdue Pharma said it was confident it would win its appeal.
Purdue Pharma has not been alone in that opinion. Bruce Lehman, the former U.S. commissioner of patents and trademarks, wrote in an opinion article that the decision against Purdue Pharma "would likely be reversed on appeal."
The court made a mistake in interpreting a regulation that Lehman was responsible for administering when he served as commissioner from 1993 to 1998, he wrote.
And Wall Street analyst Corey Davis, who follows the generic drug industry for JP Morgan, warned investors last June that Endo's decision to put OxyContin on the market could be a mistake because Purdue Pharma has such a strong case.
In a recent research note, Davis again weighed in on the subject.
"We think the market underestimates the risk of keeping (the generic version of OxyContin) on the market, given the recent surprise reversal of the appellate court," Davis said.
Worth the risk
Generic companies, balancing risk and revenue, have been more aggressive in challenging patents and are increasingly launching drugs before litigation has concluded, known in the industry as an at-risk launch, said Dar Haddix, editor of Generic Line, one of several pharmaceutical trade publications run by Falls Church, Va.-based FDAnews.
"A lot of people say that generic companies are more legal-savvy and are hiring better lawyers and grabbing a bigger share of the market," Haddix said. "Because of these changes they are more confident in challenging patents."
Generic firms win 70 percent of their challenges against brand drug firm patents, Haddix said.
Endo, Teva Pharmaceuticals Industries Ltd. and other generic OxyContin makers, unless they voluntarily withdraw their versions of the drug, will continue to see added revenues at Purdue Pharma's expense, at least until the trial court rules again. The appeals court ruling in its favor, at least for now, does nothing to help Purdue Pharma recover.
"We don't have any additional cash flow because of this decision," Friedman said. "While this is good news there are a lot of questions we can't answer at this time."
He added that he doesn't know how long it will take for the Endo case to be resolved, and there are separate lawsuits against Teva of Israel, the world's largest generic-drug maker, as well as other companies that are also making generic versions of the drug.
"If we prevail we will seek damages from all of them," Friedman said.
Payback?
A decision in favor of Purdue Pharma could turn its fate, said Manny Ratafia, president of Woodbridge-based Ratafia Ventures, which studies and reports on the pharmaceutical market.
Along with damages for what Purdue Pharma lost in profit, if the court finds that the competition acted inappropriately, there could be punitive damages, Ratafia said. Purdue Pharma could potentially recover much of what it has lost.
It's risky for a company to launch a generic drug before litigation is finished, Haddix said.
"There's always a chance it will have to pay triple damages," she said. "For a company like Endo, which is relatively small, paying triple damages could put it out of business."
However, Haddix said, according to the industry watchdogs she speaks with, a generic company has never had to pay triple damages to a brand drug firm.
Before September 2003, there had been no at-risk generic drug launches. But now that more challenges are happening, it is likely that a generic drug company may have to pay triple damages, she said.
That possibility makes industry observers wary of Endo's decision to keep its generic OxyContin on the market, especially because the pricing environment for generics is weak.
"This is one major reason we are surprised to see the product remain on the market since, if Endo were to lose on remand, it would owe Purdue Pharma based on the brand sales rate," Davis said.
Despite the risks, Endo has said it has no intention of pulling its version of OxyContin off the market.
A bigger market
Purdue Pharma could reap other, less tangible benefits if the trial court eventually decides in its favor. First, the company would instantly gain an expanded marketplace thanks to the aggressive marketing the generic drug makers have given their versions of OxyContin, Ratafia said
If they're forced to stop, "automatically, Purdue Pharma picks up all that extra market, so the marketing efforts of the other companies can benefit Purdue Pharma," he said.
Although the recent court decision is "profoundly important for the company," Friedman said the steps to preserve Purdue Pharma from further decline are just as critical.
Researchers continue to work on reformulating OxyContin to make the tablets more abuse-resistant, a problem that has plagued Purdue Pharma and generated hundreds of lawsuits. The company has won all of those adjudicated -- about 400 -- thus far.
And Purdue Pharma's remaining researchers also are attempting to reformulate its other controlled-release painkiller called Pallodone, which was pulled from the market in July at the request of the federal Food and Drug Administration because of concerns about how the drug interacts with alcohol.
Diversification
Purdue Pharma, though out of the drug discovery arena, has learned to be creative in its quest to develop and market new drugs, Friedman said.
The company licensed a one-a-day painkiller last year from Canada's Labopharm, and has the exclusive right to market, sell and distribute the product, pending regulatory approvals in the United States.
Purdue Pharma will pay up to $170 million if certain milestones are met for time-released Tramadol, a centrally acting analgesic used to treat moderate to moderately severe pain that is sold in the United States in immediate-release formulations.
"We are hopeful to have approval before the end of the year," Friedman said.
In January, Purdue Pharma entered into a multiyear agreement with the Japanese company Shionogi & Co., to develop and co-market several drug compounds for pain treatment.
The research focuses on developing new compounds that target receptors and pathways known to modulate the pain response in the body.
Shionogi will pay the research costs for the first three years of the collaboration, then provide additional payments to Purdue Pharma as the programs reach certain development milestones. It will make certain milestone payments to Shionogi based on sales once the products are commercialized.
Friedman said he is hopeful that clinical trials will begin early next year for a compound that has already been identified.
Purdue Pharma will own half of any of the drugs produced by the partnership, sharing the cost and risk of clinical development, Friedman said.
"The goal has been to give us a broad pipeline of analgesic products that are innovative and improve the way patients are treated," he said.
The legal challenge Purdue Pharma is battling has forced it to look beyond OxyContin. And that will help shore up the long-term health of the company, Ratafia said.
"If Purdue gets its rights back (for OxyContin), they will be somewhat more diversified and that will be beneficial," he said. "There are advantages to not having all their eggs in one basket."
Meanwhile, Friedman is taking it one day at a time in a struggle to keep a smaller Purdue Pharma healthy while it fights to regain its OxyContin patents.
"It is difficult to project what will happen, we are hoping the judge finds in our favor. It will speak well of our opportunities here in Stamford to renew our growth and rebuild our business," Friedman said.
Copyright © 2006, Southern Connecticut Newspapers, Inc.
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Thu Mar 09, 2006 7:54 pm |
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Rolo
Yo' Daddy
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| Re: When OxyContin Caused the Pain |
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quote:
Originally posted by peterj
Last year, pain at Purdue Pharma became a visceral feeling that permeated the inner workings of a company that today is a shell of its former self.
In January 2004, Purdue Pharma lost the first round in a legal pursuit to halt a generic version of OxyContin when Endo Pharmaceutical Holdings won its lawsuit that Purdue Pharma's patents protecting OxyContin until 2013 were unenforceable.
Yea thats what happens when a company intentionally misrepresents itself.
quote:
Endo said that Purdue's many patents on OxyContin were invalid. To win
its patents, Purdue told the patent office that OxyContin was unique
because 90 percent of patients taking the medicine got pain relief by
taking very little medicine - from 10 milligrams to 40 milligrams.
But during the course of the trial, Dr. Robert F. Kaiko, OxyContin's
inventor, acknowledged that he had done no clinical studies and had no
evidence to support this claim. Purdue admitted that Dr. Kaiko's
"discovery" was made solely in his head but that it was valid even
though the company was unable to prove it to be true.
Internal company documents from 1993 show that Purdue executives
concluded that the claims that the company were making for OxyContin
"weren't anywhere close" to being proved and were "clearly Bob Kaiko's
vision."
In his ruling, Judge Stein wrote that "Purdue made a deliberate decision
to misrepresent to the P.T.O. a 'theoretical argument' and an
'expectation' as a precisely quantified 'result' or 'discovery.' "
The F.D.A. grants five years of exclusive selling rights to any drug
that wins its approval. After that, companies generally rely on patents
to maintain the monopolies that allow them to charge high prices.
Purdue's initial five years of exclusive selling rights ended in 2000.
Since then, it has been able to continue charging high prices for
OxyContin because of its patents - patents that were won fraudulently,
Judge Stein ruled.
See complete article HERE
Drug companies are continually trying to defraud the consumers to hold on to exclusive patent rights forcing patients to pay exorbitant costs for the medication they desperately need. I can not understand how one could have sympathy for that. When you know the excruciating pain people can suffer when being eaten alive by cancer, it becomes obvious that what these drug companies are doing is reprehensible.
~Safora (Rolo's wife)[/quote]
"Expect me when you see me."
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Sat Mar 11, 2006 3:23 pm |
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Rolo
Yo' Daddy
Cash: $ 309.70
Posts: 1551
Joined: 13 Mar 2005
Location: Colorado/Florida
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quote:
Originally posted by coaster
Patent reform, yes, absolutely. Along with tort reform, reinstating the ban on drug advertising, and streamlining the FDA approval process. The escalating cost of prescription drugs is outrageous.
The first thing we do is, we kill all the lawyers.
I don't know enough about the topic to comment on specifics, but I will disagree with my wife's sentiments.
What is the purpose of drug companies? Is it to help people? No. Is it to ease people's suffering? No. The purpose of drug companies is the same as any other company: to make money.
It is accountable to its shareholders. No profit, no money, no company, no research, no drugs.
If the company were, say, Lexus, would it be demonised the same way?
I mean, there are plenty of families in need of luxury SUVs with built-in DVD players to baby-sit the ADHD kids on the way home from day-care, right? Even with BOTH parents working, it is hard to make ends meet!
Just because a company makes something humanitarian does not mean we're entitled to its products.
From my limited experience, I cannot see justification for the cost of medicine....$600 for a friggin' bottle of Flonaise!?!? WTF!? I understand funding R&D, but with that budget, we should have an immortality pill by now.
"Expect me when you see me."
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Sun Mar 12, 2006 5:16 am |
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Monika555
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Cash: $ 35.45
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Joined: 26 Oct 2017
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I didn't hear about OxyContin, but this article persuaded me that I'm right when I check the information about pills I'm going to take. Usually I use Canadian Pharmacy Online for this purpose as this source provides visitors with the possibility not only to order meds, but also to read description of them. Anyway, thanks for sharing, I'll be careful with medications for sure!
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Thu Mar 07, 2019 10:21 pm |
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