The Politics Of Generic Drugs

Half the war over branded drugs is fought outside the lab

The way E. Thomas Arington sees it, his company is David taking on Goliath. For nearly a decade, the CEO of Cincinnati-based Duramed Pharmaceuticals Inc. has sought Food & Drug Administration approval for a generic version of America's most widely prescribed drug, a brew of estrogens called Premarin. Standing in the way is American Home Products Corp. and its subsidiary Wyeth-Ayerst Laboratories Inc., which makes Premarin from the urine of pregnant mares.

The pharmaceutical giant has blocked Duramed by arguing that its generic counterpart to Premarin lacks a crucial ingredient found in the brand-name product--and might therefore be less effective. Generic supporters dispute that. The FDA is expected to decide who's right within weeks.

But there's more to the Premarin fight than just the fate of one blockbuster drug. In a growing trend, brand-name companies such as Wyeth-Ayerst are using regulatory and legal tactics to delay the approval of cheaper generics, say critics. Their favorite strategy is arguing that a generic differs in some key way from the equivalent brand-name drug. The generic may lack a trace ingredient, as Wyeth-Ayerst claims in the case of Premarin. Or it may not exactly mimic the way the brand-name drug delivers its chemicals, as in the case of the heart drug Procardia (table).

Generics supporters say these differences are immaterial. And favoring brand-name drugs forces patients and the government to shoulder millions of dollars in unnecessary drug costs. "The real losers are the consumers," says Bruce L. Downey, CEO of Barr Laboratories Inc. of Pomona, N.Y. Brand-name companies counter that they're simply trying to protect the public. "We're not averse to a generic," says Justin Victoria, Wyeth-Ayerst's regulatory chief. But leaving out ingredients may be risky because "nobody knows how the products work without them."

In the case of Premarin, the financial stakes are huge. While the drug has been on the market since 1942, it was not until the mid-1980s that scientists showed that it could ward off bone loss as well as the symptoms of menopause. That's helped Premarin reap $860 million in U.S. sales alone last year. The drug is expected to become even more popular as evidence mounts that estrogen replacement also helps prevent heart ills and maybe even Alzheimer's disease. Analysts figure a generic would kill Wyeth-Ayerst's cash cow and boost Duramed's annual revenues from $50 million to $300 million.

BACKFIRE. As Premarin's fortunes rose in the late '80s, Wyeth-Ayerst execs began to aggressively fight off would-be copycats. They argued that generics then on the U.S. and Canadian markets were deficient in two crucial ways. First, the copies were absorbed into the bloodstream faster than the U.S. version of Premarin and might not be as effective. Second, the generics are made from plant estrogens rather than urine. As a result, while they contain the two ingredients deemed "active" in Premarin, they lack many others. One trace ingredient called delta (superscript 8,9)-dehydroestrone sulfate may be vital to the drug's action, says Wyeth.

The pharmaceutical giant's tactics partially backfired. ICN Canada Ltd., a generic maker in Montreal, showed that the Canadian version of Premarin was actually nearly as fast-acting as the generics. That riled a Canadian drug advisory committee. If Wyeth's position was correct, the panel concluded in a 1991 report, then Premarin had "been producing unsafe plasma levels in [Canadian] women for years." Canada's regulatory agency rejected Wyeth's claim and left the generic on the market. "The Canadians called their bluff," says Dillon, Read & Co. analyst Jerry I. Treppel.

Wyeth-Ayerst had better luck in the U.S. In 1991, the FDA made a rule change that forced fast-acting generics off the market. Regulators also declared that conjugated (or blended) estrogens should contain three so-called concomitant ingredients plus the two active estrogens. Together, the five substances make up 91% of Premarin's estrogens.

COUNTERATTACK. In 1994, however, the FDA firmly rejected Wyeth's contention that delta (superscript 8,9) was also essential. That was the opening generic companies had been waiting for. Duramed filed its application in September, 1995. Barr followed the next July. Both companies' versions lacked delta (superscript 8,9), which wasn't commercially available at the time.

Wyeth-Ayerst counterattacked. In November, 1994, it asked the FDA to require delta (superscript 8,9) as an ingredient. It also recruited Washington insiders to lobby Congress and other key groups. The effort won over Senator Barbara A. Mikulski (D-Md.), the National Osteoporosis Foundation, and many others. In 1996, the company's forces persuaded Representative Eddie Bernice Johnson (D-Tex.) to switch sides. "I just have a strong feeling that an inferior generic is no bargain," Johnson says.

Virtually everyone in the battle says that while Premarin is a stellar drug, the details of how its cocktail of estrogens actually works in the body are still murky. "For a drug used by this many American women for this amount of time, it's shocking how little is known about it," says Dr. Janet Woodcock, director of the FDA's Center for Drug Evaluation & Research. Wyeth scientists have shown that the disputed substance, delta (superscript 8,9), does have an effect on bone when given in doses four times higher than that in standard Premarin tablets. But that doesn't necessarily mean that Premarin wouldn't work without the ingredient, says Dr. Robert Lindsay of Columbia University, a pioneer in estrogen research, who analyzed the data for Wyeth-Ayerst.

In a study sponsored by Duramed, Dr. Richard B. Hochberg of the Yale University School of Medicine showed that delta (superscript 8,9) has only weak estrogenic effects on human cells. Generic supporters also point to other estrogen drugs on the market, such as Bristol-Myers Squibb Co.'s Estrace, that don't contain any delta (superscript 8,9) but appear to work as well as Premarin. "This fight is driven by financial interests rather than health interests," concludes Hochberg.

PRESSURE. If true, that's little consolation to Duramed, which is trying to hang on long enough to get FDA approval. With a $33 million investment in the product yet to pay off, the company is losing money. Arington was forced to lay off 90 of his 250 workers late last year.

So why has the FDA taken so long to decide? One reason is that the lack of data strengthens Wyeth-Ayerst's argument that millions of women could be put at risk by a generic that's not identical to Premarin. Another reason for the FDA's delay is intense pressure from Congress and interest groups. Even animal rights groups have gotten into the act, throwing horse manure on the steps of the agency in December to protest the treatment of horses used to supply urine for Premarin. "Where there's a tremendous amount of outside scrutiny as in this case, a decision has to be pretty impeccable," says Woodcock.

Wyeth's executives stand by their no-holds-barred approach. "We make no apologies for defending our product and its earnings," says Michael Dey, president of Wyeth-Ayerst unit ESI Lederle Inc. But Arington, along with many analysts, is convinced that Duramed will finally prevail. "What I like best about the David and Goliath story," he says, "is that David wins." If so, it will be a message to the brand-name companies that their regulatory and legal maneuverings won't always succeed.

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