Altana starts legal action to fight generic drug competition

Apr 21 2004

Altana AG, Germany's fifth-biggest drug maker, is facing a generic challenge from an unnamed competitor to its Protonix ulcer drug. Altana is now readying its patent infringement suit to stave off the generic competition. Altana and its US partner Wyeth are confident that the patent, which expires in July 2010, will stand up to the challenge.

Protonix generated $2.84 billion in worldwide sales last year. Although many other generic defense strategies are available today, legal battles remain the last line of brand protection. According to "Combating Generics: Pharmaceutical Brand Defense," ( http://www.pharmagenerics.com ) a report by industry watchers Cutting Edge Information, 71% of pharmaceutical companies surveyed have fought generics with legal strategies since 2000. Litigation often represents an effective means for patent defense, and attendant costs are more than covered by continued -- and protected -- product sales.

As generic makers threaten to capture large chunks of market share from branded products, the trend toward the courts shows no signs of stopping. "Fifty-seven percent of companies plan to use litigation strategy to protect patents in the next three years," said Jon Hess, senior analyst at Cutting Edge Information. "The same percentage, however, also plans to pursue defensive pricing strategies and more patient outreach programs."

The report also reveals that, in the next few years, companies will first attempt line extension strategies to protect their patents. When executed and marketed properly, line extensions yield powerful results by building on initial drugs' brand equity. In the most successful cases, such as with AstraZeneca's Prilosec and Nexium, patients and physicians switch en masse from the threatened brand to a newer one with patent protection. Cutting Edge Information's report "Combating Generics: Pharmaceutical Brand Defense," available at http://www.pharmagenerics.com , explores an array of legal- and product-based strategies for defending pharmaceutical assets against generic competition.

The report analyzes line extensions, defensive pricing, Rx-to-OTC switching, "flanking generics" and other licensing agreements, DTC advertising and outreach programs. It also includes lifecycle management activity timing and resources and key industry trends and developments.