• U.S.

Bristol-Myers Squibb Lobbies for a Patent Loophole

5 minute read
Viveca Novak

Bristol-Myers Squibb has stepped forward in recent weeks to do its part in the fight against bioterrorism. It was one of several companies that offered the government free supplies of drugs believed to be effective against anthrax. It also offered the feds a fully-funded team of scientists with expertise in bacterial research to help fight the bio-war.

At the same time, on Capitol Hill and at the Food and Drug Administration, BMS has remembered its self-interest. The company is trying to leverage a provision of drug law designed to help children to secure a three-year extension on its exclusive right to sell a top-grossing diabetes drug, Glucophage — and hiring a world of lobbyists to help make it happen. The tablet form of the drug brings the company $1.4 billion a year.

The background

Congress was already in the process of debating the renewal of a measure that gives brand-name drug companies an extra six months of patent protection on their products if they do studies on how they work on children. Before the law was passed in 1997, pediatricians had little information on whether drugs were safe or effective for their young patients, and often had to guess how to calibrate doses of even well known medicines. For drugmakers, testing drugs on kids wasn’t profitable; the money was in the adult market. The law led to a flurry of studies (more than 400) and labeling changes that have been helpful for treating children, though at a huge cost: pediatric studies that often cost companies just a few million dollars often reap them rewards totaling hundreds of millions thanks to the extended monopolies.

During the debate, some generic companies went to Capitol Hill with a concern: BMS was asking the FDA to approve a new interpretation of the agency’s rules that, if successful, would allow it to use the findings from its pediatric study — for which it already received six months of additional monopoly — to keep generic versions of the drug off the market for an extra 3 years. The reason? FDA regs entitle companies that change their labels due to new research to have an extra three years of exclusivity. BMS argued that since data gleaned from its pediatric study led to a labeling change, it should get that three years. This would be a first; until now, the regs have been read as keeping generics from labeling their products for use in children for three years, not as barring them from the market altogether, which would delay competition and keep prices high for consumers.

Enter the lobbyists

To help make its argument, BMS added a slew of new lobbyists to its force, including GOP insider Haley Barbour. Longtime lobbying powerhouse Tommy Boggs took Bristol-Myers’ CEO for sit-downs with lawmakers like John Dingell, the top- ranking Democrat on the House Energy and Commerce Committee. And BMS made headway in arguing that a measure to fix the loophole it was trying to create should not be part of the bill — or at least that BMS should be exempted. But when lawmakers figured out that dozens of other drugs could make the same argument as BMS, including products like Pfizer’s anti-seizure medication Neurotonin, with revenues of $2.5 billion per year, most realized a fix was needed, and other brand-name drugmakers didn’t like the notion of an exemption for BMS. The Senate approved a bill with a provision clarifying that generic drugmakers can sell their version of a drug in an adult form even if the brand- name maker has changed its label by adding new pediatric information. The House bill that passed in committee has similar language; a vote on the House floor could happen Tuesday. But generic drugmakers and other opponents of BMS’ effort worry that a measure favoring the company could still be slipped in during the House-Senate conference on the bills.

Patrick Donohue, a spokesman for BMS, confirmed that “we are in discussions with the FDA and Congress about pediatric studies and Glucophage.” He would not comment further.

Long anticipating it would lose its exclusive right to sell Glucophage, BMS already was working another strategy: to try to convert doctors and patients to two new formulations of the drug, Glucophage XR and Glucovance.It’s a common tactic used by brand-name drugmakers as their patents near expiration — develop a slightly altered version of a drug, which is then eligible under FDA rules for at least another few years of market monopoly, and try to get users of the original drug to switch. BMS has run newspaper ads offering patients free 30 or 60-day supplies of the new drugs if they switched. But in a conference call with market analysts last week, a BMS executive conceded that “We have clearly not been making the progress” that the company had hoped for in converting patients.

With 14 generic companies lined up to start making generic Glucophage, consumers stand to benefit greatly if BMS is not successful with its unorthodox interpretation of FDA rules. Analysts believe the price of the product, whose generic name is metformin, would plummet immediately by at least 30%, with greater price cuts as time passed.

More Must-Reads from TIME

Contact us at letters@time.com