UPDATE: I’ve talked more about this, and who’s to blame, in an additional post.
There’s a paper out in Archives of Internal Medicine that’s going to keep me good and fired up all day:
The ongoing debate concerning the efficacy of fenofibrate has overshadowed an important aspect of the drug’s history: Abbott Laboratories, the maker of branded fenofibrate, has produced several bioequivalent reformulations that dominate the market, although generic fenofibrate has been available for almost a decade. This continued use of branded formulations, which cost twice as much as generic versions of fenofibrate, imposes an annual cost of approximately $700 million on the US health care system. Abbott Laboratories maintained its dominance of the fenofibrate market in part through a complex switching strategy involving the sequential launch of branded reformulations that had not been shown to be superior to the first-generation product and patent litigation that delayed the approval of generic formulations. The small differences in dose of the newer branded formulations prevented their substitution with generics of older-generation products. As soon as direct generic competition seemed likely at the new dose level, where substitution would be allowed, Abbott would launch another reformulation, and the cycle would repeat. Based on the fenofibrate example, our objective is to describe how current policy can allow pharmaceutical companies to maintain market share using reformulations of branded medications, without demonstrating the superiority of next-generation products.
Let me recap for you. Abbott Labs had a drug (fenofibrate, or Tricor-1) which they licensed from Fournier Labs in 1998. So please, don’t start with me about how much it cost Abbott to “discover” the drug. There was a problem, though. Much of its exclusivity time had been used up by the time Abbott acquired the license. So in early 2000, another company filed its intention to make a generic version of the drug. Abbott fought back by filing a patent infringement suit. When this happened, the FDA basically told the generic company that they couldn’t make the drug until the lawsuit was resolved, which usually took about 30 months. During that time, Abbott got to keep exclusivity.
In the interim, Abbott sought and obtained FDA approval for Tricor-2. That drug was nothing more than a branded reformulation of Tricor-1. Tricor-1 came in 67-mg, 134-mg, and 200-mg capsules; Tricor-2 came in 54-mg and 160-mg tablets. No new trials involving Tricor-2 were submitted to the FDA. But Tricor-2 came out while the generic company was still waiting to make Tricor-1, and thus Tricor-2 began selling with no direct competition.
Six months later, Tricor-2 evidently accounted for 97% of all fenofibrate prescriptions. By the time the generic copies of Tricor-1 came out, no one was taking it anymore, and they couldn’t penetrate the market.
Wash, rinse, repeat. The generic companies petitioned to make generic Tricor-2. Abbott filed a patent infringement suit buying them a 30 month delay. They got to work on Tricor-3. That tablet came in 48-mg and 145-mg doses. No new studies. They got approval. Evidently, 70 days after Tricor-3 was introduced, 70% of users were switched to the new branded drug. By the time the other companies got generic Tricor-2 out, Tricor-3 had 96% of the market.
I swear I’m not making this up. Wash, rinse repeat.
As others once again tried to make generic Tricor-3, Abbott rolled out Trilipix. That drug switched back to capsules, changed the dose to 45-mg and 135-mg, and packaged a metabolite of fenofibrate (fenofibric acid). That, and a few simple studies got them three years of exclusivity.
Needless to say, the generic companies have sued (emphasis mine):
Abbott’s strategy did not go entirely unnoticed. In May 2005, the Louisiana Wholesale Drug Company filed a class action lawsuit against Abbott, on behalf of all pharmacies and wholesalers that purchased Tricor, alleging the company’s “unlawful exclusion of competition from the market for fenofibrate” (eAppendix 2). Abbott was the subject of a similar antitrust complaint brought by various patients taking Tricor. Both lawsuits cite the same sequence of events described herein as evidence that Abbott violated the Sherman Antitrust Act (15 USC 1-7 ), which outlaws monopolies and any effort to establish such market position. Abbott was sued again in 2008 by 19 different states, which made allegations similar to those of the plaintiffs in the earlier lawsuits but also highlighted their view that Abbott had broken various state antitrust laws. Ultimately, Abbott settled each of these lawsuits at a combined cost to the company of more than $300 million, which amounts to less than 4% of total sales to date of Abbott’s fibrate franchise (eAppendix 2).
Oh, and by the way, if we switched everyone in the US to the generic drug today, we could save something like $700 million a year. Still.
The authors add this at the end:
While we have used Abbott’s handling of fenofibrate as an illustrative example of a branded drugmaker’s maintaining a dominant market share years after generic competition was permitted, it is only one example. There are instances of similar strategies. AstraZeneca’s efforts to switch patients from omeprazole (Prilosec) to the active enantiomer of the old drug, esomeprazole magnesium (Nexium), in 2001 is well documented. Such strategies are particularly worrying given concerns about the unsustainable growth of health care costs. Fortunately, this is a solvable problem because small changes to the current regulations and structure of our health care system have the potential to foster appropriate generic competition and to ensure that drugmakers demonstrate the value of their next-generation products.
I’ve written about some of this before here.
The BMJ news quoted one of the authors with some strong words:
Harlan Krumholz, a professor of cardiology, told the BMJ that it was not just the company that could be criticised. He thought that doctors were “complicit” in the problem. He asked, “Why didn’t we prescribe the bioequivalent generics for our patients? What was the advantage to our patients of the more expensive proprietary drug? Did we let down our patients and society? There are questions about the utility of fenofibrate; but if it was going to be used, why didn’t we think about whether the higher cost, brand drug was providing any additional benefit?”
I think it’s gated, unfortunately, but the paper is well worth your time. “Avoidance of Generic Competition by Abbott Laboratories’ Fenofibrate Franchise“. I’ve only given you the high notes here. There’s much more. Go read if you can.