AbbVie, Amgen Settle Humira Patent Fight -- WSJ
September 29 2017 - 3:02AM
Dow Jones News
By Peter Loftus
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 29, 2017).
Drugmakers AbbVie Inc. and Amgen Inc. reached a patent-dispute
settlement requiring Amgen to wait until 2023 to start selling a
lower-price copy of the world's top-selling drug, AbbVie's
arthritis treatment Humira, in the U.S.
The deal could give AbbVie an unusually long 20-year U.S.
monopoly on sales of the expensive biotech drug that went on sale
in early 2003, assuming no other rivals manage to bring copies to
market before 2023. Humira costs more than $57,000 annually a
patient and had U.S. and global sales last year of $10.4 billion
and $16 billion, respectively.
The deal suggests that the industry's longstanding strategy of
using patents to ward off cheaper competition for brand-name drugs
is extending into the era of "biosimilars," the industry name for
copies of biotech drugs, which are proteins secreted by genetically
modified cells. Such drugs are newer to the market and harder to
copy than traditional chemical pills.
Companies have long acquired additional patents that expire
years after a drug's original patent to extend market exclusivity
for traditional pills or solutions, such as Pfizer Inc.'s
erectile-dysfunction drug Viagra and Eli Lilly & Co.'s cancer
drug Alimta. Because they are a newer phenomenon, biotech drugs
haven't faced copycat competition in the U.S. until recent years. A
2010 law cleared a path for regulators to start approving
biosimilars; the first one was approved in the U.S. in 2015.
AbbVie secured more than 100 patents to protect its sales of
Humira, a biotech drug originally approved for U.S. sale in 2002.
It treats a range of conditions including rheumatoid arthritis and
gut disorders. The initial U.S. patent for Humira expired in
December 2016, but the additional patents, which cover things such
as manufacturing methods and the drug's formulation, expire in the
2020s.
Drug companies often challenge the validity of patents held by
rivals, and the disputes end up in court. Sometimes the court cases
result in settlements that allow a copycat version of a drug to
enter the market before the last patents expire. The Federal Trade
Commission and purchasers of drugs have criticized some settlements
as being anticompetitive by delaying generic launches, particularly
if the maker of the brand name drug agrees to pay money to the
generic challenger as part of the settlement.
AbbVie said Amgen will pay royalties under the agreement; the
companies declined to disclose additional financial terms. AbbVie
shares rose 5.7%, to $89.54, on Thursday.
The companies' dispute began when Amgen received Food and Drug
Administration approval to start selling a copy of Humira in the
U.S. in September 2016. AbbVie sued Amgen in federal court in
Delaware, seeking to block the copy and alleging it violated many
AbbVie patents. Amgen didn't start selling the copy because of the
patent litigation. Amgen previously tried to invalidate some Humira
patents in a challenge filed with an arm of the U.S. Patent and
Trademark Office, but failed.
Under the new settlement, Amgen said AbbVie will grant patent
licenses for the sale of its biosimilar, and the companies have
agreed to dismiss all pending litigation. Amgen expects to launch
the drug in Europe in Oct. 16, 2018, and in the U.S. on Jan. 31,
2023.
The deal could also raise the ire of politicians, health
insurers and patients who are counting on biosimilars to help
reduce the hefty cost of many biotechnology drugs.
John Arnold, co-chair of the Laura and John Arnold Foundation, a
charity that supports making drugs more affordable, criticized the
deal Thursday, saying the agreement unfairly delays the launch of a
lower-priced copy.
"This deal is another example of how the pharma industry
exploits the combination of a flawed patent system, weak antitrust
enforcement, and poor drug price regulation to ensure Americans pay
grossly inflated prices relative to the rest of the world," Mr.
Arnold said. "The creativity of the industry's lawyers to
circumvent the intent of current regulations is remarkable and will
only stop if and when Congress passes comprehensive reforms," he
added.
Several other companies are developing their own biosimilar
versions of Humira, including Boehringer Ingelheim's Cyltezo, which
was approved by the FDA in August but hasn't gone on sale because
AbbVie also sued to block that drug.
AbbVie created a "wall of patents that was so hard to get around
that the biosimilars are going to have to settle for a date" long
after the initial patent expiration, said Zachary Silbersher, a
patent attorney with Markman Advisors, which provides
intellectual-property analysis to investors.
AbbVie has raised Humira's U.S. list price substantially in
recent years -- the price rose 68% between 2013 and 2016 according
to the Alliance of Community Health Plans, an insurance group. The
drug company says it provides rebates and discounts that lower the
cost for insurers and patients.
Write to Peter Loftus at peter.loftus@wsj.com
(END) Dow Jones Newswires
September 29, 2017 02:47 ET (06:47 GMT)
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