The Claritin Case

Al Gore doesn’t mince words when it comes to pushing for cheaper prescription drugs. So it makes sense that he opposes efforts by pharmaceuticals companies to extend their patent rights in order to block cheaper generic drugs from reaching the market.

What doesn’t make sense is that one of Gore’s senior advisers, top-tier lobbyist Peter Knight, is a hired gun for pharmaceuticals giant Schering-Plough, which is in a red-hot battle to stretch out its patent for the best-selling allergy medication Claritin beyond 2002. The New Jersey-based company paid Knight’s firm $100,000 in the first half of this year alone.

Of course, Schering-Plough would pay almost any amount of money to protect its exclusive right to sell Claritin, a drug that brings it more than $5 million in revenue a day. Claritin sales totaled $1.9 billion last year, and will balloon to $4 billion by 2002, according to a market analyst. To keep the money coming in, the company doubled its lobbying outlay starting in 1996 to more than $4 million in 1998. Among its other paid advocates: former Senator Dennis DeConcini; former Watergate assistant special prosecutor Richard Ben-Veniste; and Thomas Parry, former chief of staff for Senator Orrin Hatch, who heads the Judiciary Committee that considers such requests. Hatch has used Schering-Plough’s Gulfstream IV jet five times this year for his presidential campaign, reimbursing the company at first-class-airfare rates, as permitted by law.

Patent extensions for drugs are rare. The last one, granted in 1996, was for the popular arthritis drug Daypro. So Schering-Plough has tried to work the system every way it can. First it wanted Congress to approve a straight extension of its patent. When that didn’t fly, it tried a bill that would have shifted any patent-extension decision away from Congress to a new review board at the Patent and Trademark Office, and defined criteria for such extensions in ways that tended to favor the drug companies. But that bill, quietly introduced by New Jersey Senator Frank Lautenberg, failed. This year the crusade has been more public: New Jersey’s other Senator, Democrat Robert Torricelli, introduced the bill one day after the company gave $50,000 to the committee he chairs to help elect Democrats to the Senate. He says the timing was a coincidence.

Schering-Plough argues that additional patent years are only fair. Claritin was stuck in the Food and Drug Administration approval pipeline longer than many drugs, it claims, with the clock ticking on its 17-year patent. Schering-Plough also says Claritin profits help fund research for new drugs. But, its opponents counter, what about Claritin patients–who pay as much as $2.66 a dose instead of the 50[cents] or less they would pay, analysts figure, if a generic version of the drug were available? If the patent expires on time, according to a University of Minnesota study funded in part by the generic-drug industry, consumers could save $7.33 billion over five years. Those arguments helped persuade Montana G.O.P. Senator Conrad Burns, who faces a tough re-election fight next year, to drop his support for the bill this fall, saying he wanted no part in forcing millions of Americans to pay higher prices.

Schering-Plough’s effort may be dead for this year. At a Judiciary Committee panel meeting last week, held out of view in a Capitol hideaway, Senator Patrick Leahy objected to moving the bill. Knight says he is closing down his firm to spend more time on the Gore campaign. But Schering-Plough is expected to continue the battle next year. If it loses again, the company has that contingency covered too: the FDA is currently considering its new super-Claritin for market approval. Its patent wouldn’t expire until 2014.

–By Viveca Novak