Technology in Society 32 (2010) 324–330
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`Contents lists available at ScienceDirect
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`Technology in Society
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`j o u r n a l h o m e p a g e : w w w . e l s e v i e r . c o m / l o c a t e / t e c h s o c
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`Evergreening: A deceptive device in patent rights
`Gaurav Dwivedi 1, Sharanabasava Hallihosur 1, Latha Rangan*,1
`Department of Biotechnology, Indian Institute of Technology, Guwahati, Assam 781 039, India
`
`Keywords:
`Branding
`Drugs
`Evergreening
`Generics drugs
`Patents
`Pharmaceuticals
`
`a b s t r a c t
`
`Patents are the most important way by which inventors can protect their invention and the
`income that might derive from innovations developed in return for the full disclosure that
`enters into public domain after expiration of the patent term.
`In certain domains,
`monopolies over patent rights are being extended beyond the patent period, particularly in
`high-revenue-earning pharmaceutical sectors. This article presents evergreening strategies
`that are regularly employed by the giant branded pharmaceutical firms as a tactic to
`bypass existing patent laws and limit generic competition in the marketplace. The article
`examines the implications of evergreening for different stakeholders, including branded
`and generic drug companies and consumers. Problems that arise due to evergreening are
`also discussed. The frequency of such strategies necessitates strong patent interpretations
`that are protective of the spirit of patent laws.
`
`Ó 2010 Elsevier Ltd. All rights reserved.
`
`1. Introduction
`
`A patent, in simple terms, is a temporary monopoly
`right granted by the government to the inventor for an
`invention. The system strives to find a balance between
`reward for innovation and promotion of development by
`facilitating dissemination of knowledge by disclosure. The
`temporary period of monopoly gives the inventor a chance
`to profitably exploit his/her invention and thus provides an
`incentive for disclosure. This disclosure by itself, promotes
`further development. Upon expiration of the monopoly
`period others are free to practice the invention, which
`again is made easier by the disclosure.
`Evergreening, although not a formal legal concept, is
`a term referring to the numerous ways in which patent
`owners of pharmaceutical products use the patent laws to
`extend their monopoly privileges beyond periods that are
`normally allowed by law, particularly over high-revenue-
`earning drugs [1]. While most of these evergreening
`strategies conform to the letter of the law, very often they
`
`* Corresponding author. Tel.:þ91 (361) 2582214; fax:þ91 (361) 2582249.
`E-mail addresses: lrangan@yahoo.com, lrangan@iitg.ernet.in (L. Rangan).
`1 This authors are contributed equally in this work.
`
`0160-791X/$ – see front matter Ó 2010 Elsevier Ltd. All rights reserved.
`doi:10.1016/j.techsoc.2010.10.009
`
`seem to undermine the spirit in which patent laws were
`created.
`For major pharmaceutical companies, revenues come
`primarily from one or two of their blockbuster drugs
`(defined as drugs producing revenues in excess of $1 billion
`a year), such as Lipitor and Celebrex from Pfizer and Allegra
`from Aventis. Having spent years of colossal investment,
`both in time and resources, the branded pharmaceutical
`companies mobilize all their resources to reap the bountiful
`benefits as their products move from “on the shelf” to “off
`the shelf.” However, innovator organization can harness
`this opportunity only for 20 years, since after that the
`formula enters the generic arena and the price can decline
`by one-fifth of the initial. For instance, the sales of Capoten,
`manufactured by Bristol-Myers Squibb, plummeted from
`$146 million to $25 million within 12 months after the
`expiration of its patent in the US [2]. The expiration of
`a patent brings in its wake generic versions of the drug
`which make considerable inroads into the markets of
`brand-name drugs.
`Therefore, it is important for the pharmaceutical compa-
`nies that the life cycle of their drugs be prolonged to as much as
`possible. Developed economies with technological prowess
`take this initiative for cutting-edge R&D and aim to create
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`325
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`a technology transfer of the generic formulas beyond geo/
`economical/political boundaries. Thus evergreening has
`emerged as an important strategy among the major pharma-
`ceutical companies in the US and Canada for life- cycle
`management of their products, in order to retain profits from
`their drugs.
`
`2. Patentability of a drug
`
`An understanding of what makes a drug fit to get a patent
`and what features in a drug can be patented is essential for an
`understanding of the mechanics of evergreening. To qualify
`for a patent a drug must, just like any other invention, satisfy
`the three basic criteria of novelty, of being non-obvious
`(manifested in the inventive step of the invention), and of
`being industrially applicable. The inventor can patent the
`product (the drug in this case), the process of manufacture, as
`well as methods of use of the product. Although the criteria
`might appear straight forward, the manner in which it is
`interpreted and applied is of critical importance in deciding
`what is fit and what is not to be granted a patent. Probably
`nowhere is this brought out more clearly than in the case of
`pharmaceuticals.
`Traditionally, pharmaceutical companies filed patents for
`only the primary properties of a drug, such as the active
`ingredient, primary use, formulation, processes and inter-
`mediates involved in manufacturing the drug. However, in the
`quest of sustained profits and market exclusivity, companies
`now file greater numbers of patents for a single product. Very
`often these patents cover an expansive number of uses,
`packaging of the drug, dosing regimen, dosing route, dosing
`range, methods of treatment, delivery systems, combinations,
`biological
`target, metabolites, polymorphic compounds,
`stereoisomers etc.
`Clearly, the patent laws cover everything ranging from
`colour of the tablet to the process for making it. In fact, even
`metabolites produced inside the body of the patient after
`ingesting the drug have been patented (US Patent No.
`4636499 and Patent No. 6150 365). With such latitude, the
`inventor can keep adding patents to the same product and
`extending his or her monopoly over the product.
`
`3. Branded versus generic drugs
`
`Patent law does not distinguish between inventions
`consisting of “brand new products” and inventions relating
`to improvements; the same criteria for patentability apply.
`Taking the advantage of this existing loophole in patent law,
`not only those who develop an original product file patent
`applications relating to developments or modifications of
`their products, many applications are also in fact filed by
`other companies, including generic companies. Thus, the
`patent regulatory organizations have become an amphi-
`theatre for the branded and generic medicine makers. While
`branded companies advertise to customers and health
`organizations about their brand value and reliability, and try
`to cast generics negatively on the basis of poor replication, or
`unsatisfactory testing before commercial production of the
`original formula, the capitalistic approach weakens their
`case. However, the argument put forth by branded compa-
`nies is that they enable the development of a non-infringing
`
`competitor product thereby channeling “designing around”
`the patent.
`By allowing patents for secondary developments, the
`branded companies not only fulfill the real goal of the patent
`system (patents as a reflection of technological progress) but
`also encourage other companies to get engaged in innovation.
`This is where the battle for the regulatory and business rights
`is being fought between the branded and generic medicine
`makers for an undistributed market profits. In the case of
`pharmaceuticals, there is a vested interestdthe generic
`pharmaceutical
`industrydpositioned to challenge bad
`patents. Brand makers have to undergo stringent field trials
`for new releases, while generic makers can avoid it by
`showing promising replicas in terms of chemical standards
`and benchmarks set by the brand makers. This disables
`malicious imitations of branded drugs and trusts new drug
`manufacturers entering the market to diffuse the deterrence
`from expensive field trials. What is clear though is that
`government regulations in the different countries will deter-
`mine the extent to which pharmacies, doctors, hospitals and
`even patients can exercise that choice- in some countries the
`generic version is mandated under certain circumstances.
`
`4. Evergreening strategies
`
`It is not surprising to note that the giant pharmaceutical
`companies no longer wait for the expiry of their patent(s) to
`begin the evergreening process. In order to extend their
`monopoly and control, strategies to extend patents and
`avoid generic competition are formulated as soon as the
`product is ready for patenting. These ‘strategies’ or “life cycle
`management plans” include not only patent related strate-
`gies, but other practices of delaying or limiting generic
`competition in the market as well. This section discusses
`some common evergreening strategies, generally in context
`of the pharmaceutical industry.
`
`4.1. The 30 month stay provision
`
`When a company makes a new drug, it must get regula-
`tory approval from the Food and Drug Administration (FDA)
`showing that the product is safe and effective by filing a New
`Drug Application (NDA). This ensures that the drug can be
`sold in the US. To protect against intellectual property
`infringement, the makers go for patenting their product. A
`drug approved by the FDA is listed in an FDA publication
`called Approved Drug Products with Therapeutic Equiva-
`lence Evaluations, more commonly referred to as the “Orange
`Book”. Any new patents associated with the drug must also be
`listed by the drug maker in the Orange Book [3].
`Under the 1984 Hatch-Waxman amendments to the
`Food, Drug and Cosmetics Act, a generic drug manufacturer
`wishing to make generics of a brand-name drug must file an
`Abbreviated New Drug Application (ANDA) with the FDA.
`The ANDA needs to satisfy the FDA that the generic is a bio-
`equivalent of the brand-name drug. Furthermore, the
`generic must not be in violation of any patents on the brand-
`name drug. To comply with this requirement, the generic
`manufacturer must certify to at least one of the following:
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`i)
`ii)
`iii)
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`iv)
`
`the drug has not been patented;
`the patent has already expired;
`the generic will not enter the market till the patent
`expires;
`the patent is invalid or will not be infringed by the
`generic.
`
`If the generic manufacturer certifies to the fourth option
`(called a “paragraph IV certification”) then it must imme-
`diately send a notice to the patent holder informing its
`intent to market a generic. A paragraph IV certification
`triggers the right of the brand-name company to challenge
`the generic manufacturer in court within 45 days on the
`basis that the generic is in violation of a patent listed in the
`Orange Book. This is where the catch lies: if the brand
`decides to litigate, the statute automatically prevents FDA
`approval of the generic for 30 months or until the litigation
`is resolved or the patent lapses, whichever occurs first.
`Companies have misused this provision and at times have
`gone to the extent of listing bogus patents in the Orange Book
`to gain time by litigation. The problem here is that merely
`challenging the generic in court gives the brand an automatic
`extension of two and a half years. The brand could litigate
`saying that the generic violates one of the patents listed in
`the Orange Book and get a 30 month extension, irrespective
`of whether the challenge was correct or whether the patent
`was valid. In theory, with n number of patents listed in the
`Orange Book, the brand could go on litigating for 30n months
`or till the patent lapses by initiating a separate litigation for
`each listed patent. According to a US Federal Trade
`Commission (FTC) analysis, approximately 72% of brand-
`name companies took advantage of this provision [4].
`
`4.1.1. A case study: Bristol-Myers Squibb and Taxolc
`Bristol-Myers Squibb (BMS) sells paclitaxel, used to treat
`ovarian, breast and lung cancer, under the brand-name
`Taxol. Paclitaxel was developed by the National Cancer
`Institute and placed in the public domain and hence was
`not patentable. The drug was approved by the FDA in
`December, 1992. According to FDA regulations, BMS was
`given a five-year market exclusivity over sales of paclitaxel
`as Taxol until December, 1997.
`However, before expiration of the five-year period, BMS
`obtained two patents on paclitaxel for methods of admin-
`istering it as an anti-tumor agent and sought to extend the
`five-year exclusivity [5]. Upon expiration of the five-year
`term in December 1997, a number of generics tried to enter
`the market. BMS challenged many of them based on its
`patents listed in the Orange Book and got an extended
`monopoly for 30 months after 1997. This prevented the
`entry of generics into the market until 2000 when the sales
`of Taxol peaked at $1.6 billion. Eventually the courts ruled
`that the BMS patents were invalid, except for specific parts
`which by themselves could not have blocked the entry of
`generics into the market.
`In June 2002 attorneys general of 29 US states filed
`a lawsuit against BMS alleging that in 2000 it started the
`process all over again by acting in collusion with a Cal-
`ifornia-based company, America BioScience. According to
`the lawsuit, the two companies filed “sham” lawsuits with
`the intent of further delaying the entry of generics into the
`
`market, once again with the aid of the 30 month extension.
`The issue is still in court.
`
`4.2. Patent strategies I – line extension
`
`An area of rapid and well-publicized growth in 2005
`was the generic market, which grew by 13% in the top eight
`countries to $55 billion. Along the way, generic prescription
`volume surpassed branded volume for the first time in US
`history. As generic drug manufacturers became more
`aggressive in their efforts to gain share in markets formerly
`dominated by branded products, companies with signifi-
`cant brand franchises tried to protect their revenues by
`going after line extensions, defending patents, and reallo-
`cating their product portfolios.
`Apart from the primary patents on a drug, a manufac-
`turer can apply for more patents on the drug in order to
`extend its monopoly on the drug. This process is called
`“stockpiling.” Here, the brand-name companies “stockpiles”
`patent protection by obtaining separate 20-year patents on
`multiple attributes of a single product. The expiration of
`these patents can extend market exclusivity by several years
`in addition to the period of the primary patent. Line exten-
`sion refers to such strategies where companies attempt to
`buy additional period of exclusivity by gaining patents on
`modifications to the drugs or their method of use.
`One of the fundamental premises of the patent system is
`that patents be granted to inventions that are original.
`Indeed, objections would be invalid to extension of patents
`over inventions that are genuinely original. However, in the
`context of the pharmaceutical industry the emerging prac-
`tice is to protect a cluster of related technologies by filing
`secondary applications even when these related technolo-
`gies are not entirely original or fit to be called inventions.
`What this effectively does is reset the clock on the protection
`period sustaining the market exclusivity for the drug.
`As mentioned earlier, it is not unusual to patent such
`aspects of a drug as packaging, dosing, methods of treat-
`ment, delivery systems, combinations, biological targets
`etc. Upon ingestion of a drug the body might convert it to
`into a metabolite which has the actual therapeutic effect.
`Some companies have even filed patents for these metab-
`olites with a view to stymie the introduction of generics
`into the market - since the metabolite is patented, any
`patient consuming the generic and hence producing the
`metabolite in her body would be in violation of the patent.
`Some possible types of secondary patents are:
` Composition patents
` Patents for new polymorphs
` Patents for new formulations
` Synthesis patents
` Patents for new therapeutic regimes
` Patents for metabolites or pro drugs, etc.
`
`4.2.1. A case study: Pfizer and Viagra
`In 1991 and 1992 Pfizer obtained patents on a series of
`compounds which acted as selective inhibitors of phospho-
`diesterases (PDEs). The patented compounds included
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`sildenafil citrate, marketed by Pfizer under the brand-name
`Viagra. The patents stated that these compounds were useful
`in the treatment of angina and hypertension. Subsequently,
`several research articles were published in 1992 and 1993
`suggesting that PDE inhibitors could be useful in the treat-
`ment of impotence and male erectile dysfunction (MED)
`[6,7]. Pfizer followed this by filing for new patents in 1994
`which covered the same compounds patented in 1991 and
`1992 but claiming that these products could be used to treat
`impotence and MED (US Patent No. 6469012). The claim
`stated that this use had been found “unexpectedly” and had
`the added advantage of being administered orally as opposed
`to existing medication which needed to be injected.
`Lily ICOS, a joint venture of ICOS Corporation and Eli Lilly,
`challenged this patent arguing that in view of the articles
`published in 1992–1993 the invention was invalid for obvi-
`ousness. Pfizer defended by saying that the patent was
`inventive in the respect that the articles did not suggest the
`compounds as an oral treatment.
`The matter reached the courts in November, 2000. The
`judge found that the only difference between prior art and
`the claims was the suggestion of oral use, which did not
`constitute inventiveness. He declared the patent invalid.
`When Pfizer appealed against the decision, the Court of
`Appeal upheld the decision. The court observed that while
`there was reason to doubt that PDEs could administer orally
`to treat impotence and MED, simply deciding to try it out
`was not inventive. Moreover, there was nothing in the
`specification which suggested that there were any difficul-
`ties in oral administration which needed to be overcome by
`adapting the compound for oral use. It was obvious to try and
`any skilled person carrying out routine procedures would
`have been successful.
`
`4.3. Patent strategies II – franchise extension to successor
`drugs
`
`The struggle between the brand and generics now has
`taken a leap beyond. Brand makers are extending their
`patents beyond the expiration dates by creating euphoria
`about the most original and enhanced drug effects based on
`brand reliance and constant improvisation in the chemical
`composition which they ought to get it re-patented, thus an
`effort to curtail the generics entering the market. This
`strategy of “patent to patent” is being used to retain market
`shares by presenting consumers with a new, supposedly
`improved, drug line to replace the original drug whose
`patent is about to expire. This kind of switching of patients to
`the new drug line minimizes market share loss by attrition
`of consumers and at the same time dissuades generic drug
`manufacturers from entering the market with a generic for
`the original drug since most patients have already transi-
`tioned to the new drug. Obviously, such a large scale fran-
`chise extension requires promotion on a gargantuan scale.
`Companies invest huge amounts of money to launch
`massive campaigns to popularize the successor drug among
`patients. Doctors’ offices are flooded with sales represen-
`tatives offering them gifts of money and kind for prescribing
`their drug. Sadly, very often these successor drugs offer little
`or no advantage over the original drug. But invariably the
`
`advertisement campaigns do succeed in convincing both
`patients and doctors otherwise.
`A number of countries now provide for extended patent
`terms for pharmaceuticals. These include Australia, Japan,
`Korea, Israel, the United States, and the member states of
`the European Union. Although there are no internationally
`agreed standards for patent term extension, the provisions
`for patent term extension in those countries that provide
`for it contain some common features:
` Extension is not automatic; the patent owner must
`make a specific application;
` The length of the extension granted depends on the
`length of time between the date of filing of the patent
`application and the date of marketing approval;
` A maximum extension of 5 years is provided for;
` The rights of the patent owner in respect of the patent
`are usually limited during the extended term compared
`with the rights available during the original term.
`
`Although some countries do provide for patent term
`extension for pharmaceuticals, many countries do not. These
`include Argentina, Brazil, Canada, China, Colombia, Ecuador,
`Hungary, India, Malaysia, Peru, South Africa and Venezuela.
`
`4.3.1. A case study: AstraZeneca and Prilosec
`Omeprazole is proton pump inhibitor used in the treat-
`ment of dyspepsia, peptic ulcer and gastroesophageal reflux
`disease. It was patented by AstraZeneca which marketed it
`under the brand-name Prilosec (US Patent No. 6090827). It
`is one of the best selling prescription drugs in history and
`towards the last five-years of its patent, which expired in
`April 2001, its sales amounted to about $26 billion.
`Prilosec is a racemate containing equal quantities of both
`the S and R enantiomers. In most patients, except those that
`are “poor metabolizers”, the racemate undergoes a chiral
`shift in vivo to form the S enantiomer, which is the active
`form of the drug. Before the patent on Prilosec could lapse
`AstraZeneca developed a new drug branded Nexium which
`was nothing but the S enantiomer, or the active component
`of Omeprazole. The company executives surmised that this
`formulation could be more effective against erosive esoph-
`agitis as compared to Prilosec. The company sanctioned four
`different studies to compare the efficacy of Nexium with
`Prilosec in patients with this condition.
`The four studies compared 20 mg of Prilosec against
`a double dose of 40 mg of Nexium. The company justified
`this by saying that it planned to seek approval for a 40 mg
`dose of Nexium against erosive esophagitis for which
`a 20 mg dose of Prilosec is recommended. Of the four
`studies two concluded that Nexium did not surpass Prilosec
`even with this increased dose. However, two studies found
`Nexium better than Prilosec. The results of the favorable
`studies were published while those of the other two studies
`were not released.
`There was one study comparing equal dosages of 20 mg
`for both Prilosec and Nexium. No difference in healing rates
`was found during the initial course of treatment. At the end
`of the eighth week Nexium seemed to outdo Prilosec only
`marginally - a healing rate of 90% against 87%. This study
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`trials and of those, only one is actually approved for
`marketing. With the odds stacked so heavily against them,
`it is reasonable for pharmaceutical companies to obtain
`market exclusivity rights and recover the costs of research
`and further profits through appropriate pricing mecha-
`nisms. Problems arise when these companies attempt to
`exploit loopholes in the regulatory system to unduly extend
`their monopoly over the market in a bid to sustain their
`revenues. With an ever growing generic drugs industry
`(Fig. 2), such attempts by the branded drug industry have
`become even more aggressive.
`At the same time, evergreening carries a high risk even
`for the company seeking to exploit it. Consider franchise
`extension through successor drugs. Even if the successor
`drug is not an entirely new invention, its final approval
`does entail all the steps from synthesizing the new drug to
`clinical testing. This means that the company still incurs
`substantial costs in R&D of the successor drug. In such
`a scenario, if the new drug lacks the expected level of
`efficacy, is proven unsafe, fails to gain regulatory approval
`for some other reason or fails to sustain market shares of
`the original drug, then the company risks losing a lot of
`money.
`In 2002 Schering-Plough introduced Clarinex as a next-
`generation drug for Claritin. Things went wrong when the
`approval of Clarinex by FDA got delayed and generics got
`a chance to enter the market. A sufficient number of Claritin
`patients could not shift to Clarinex, and Schering-Plough
`faced a double disappointment: Clarinex could not scale
`the blockbuster status of Claritin, and because of generics
`the sales of Claritin plummeted from $3 billion to $300
`million in a short time (Fig. 3), even though Claritin was
`converted to an over-the-counter (OTC) drug.
`Most evergreening strategies invariably involve lengthy
`litigation. Even though pharmaceutical majors are in a better
`position to litigate than most generic drug manufacturers, it
`is definitely a financial burden. The practice has grown to
`such proportions that branded drug companies have started
`complaining about the costs of litigation involved in disputes
`over multiple patents.
`In any case, when evergreening
`strategies are well planned in advance they seem to work well
`for branded drug manufacturing companies.
`
`1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
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`120000
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`100000
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`80000
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`was used to convince doctors that Nexium was indeed
`better than Prilosec. Acting quickly, AstraZeneca got FDA
`approval for Nexium in February, 2001 – a few months
`before the patent on Prilosec was to expire. At the same time
`AstraZeneca exploited the federal provision of pediatric
`exclusivity in the US which gives a six month extension on
`existing market exclusivity for conducting tests on effec-
`tiveness of a drug on children. This extended the exclusivity
`of Prilosec fending off the generics for a further six months.
`The extra time gained was used to campaign for the
`drug. AstraZeneca launched one of the most massive
`marketing campaigns in the history of the USA after it got
`the FDA approval. The company spent $500 million a year on
`direct-to-consumer marketing, hospital discounts on the
`drug, free samples for doctors and media advertising. All
`this effort resulted in a substantial fraction of the patients
`transferring to Nexium. In 2001 alone the company trans-
`ferred 40% of Prilosec users to Nexium and managed a 9%
`growth in its gastrointestinal franchise (Fig. 1).
`
`5. Effects of evergreening
`
`When a drug goes off-patent and generic competitors
`enter the market, the price of the drug inevitably plummets.
`The lower price of the generic motivates most consumers to
`shift from the brand-name forerunner drug. When Gluco-
`phage, an oral antibiotic agent, went generic in late January
`2002, more than 80% of prescriptions were captured by
`generics within two months. The percentage rose to 90%
`within six months.
`As stated earlier, most of the pharmaceutical giants earn
`their major revenues from a couple of blockbuster drugs.
`A blockbuster drug losing its market exclusivity means huge
`drops in revenues for the company. Obviously, companies
`want their monopoly on such drugs to sustain and ever-
`greening has emerged as major strategy towards this end.
`This section examines the implications of evergreening for
`the stakeholders in the market of drugs.
`
`5.1. The branded drug company
`
`Pharmaceutical companies invest billions of dollars in
`drug research.
`It is estimated that of every thousand
`potential drugs screened, only four or five reach clinical
`
`Prilosec
`Nexium
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`2008
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`3000
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`4000
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`Fig. 1. Transitioning Prilosec to Nexium.
`
`Fig. 2. Global generics market growth, 1998–2008. Source: <http://www.
`reportbuyer.com/pharma_healthcare/generic_drugs/global_generics_
`industry_report_1.html>.
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`Claritin
`Claritin OTC
`Clarinex
`
`generic players. To the contrary, it also means that global
`drug majors are now less likely to get away with ever-
`greening. With more and more blockbuster drugs sched-
`uled to go off-patent in the near future, generic players
`have a lot to look forward to.
`
`3500
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`2000
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`2001
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`Generics launched
`
`Fig. 3. Claritin/Clarinex sales, 1999–2004. Source: <http://answers.google.
`com/answers/threadview/id/769219.html>.
`
`5.2. Generic drug companies
`
`The generic drug industry has grown steadily over
`a period of time and almost doubled in the period 1998–
`2008 (refer back to Fig. 2). In 2005, with more than $40
`billion in annual drug sales, the generics accounted for
`more than 50% of all the prescriptions filled in the US. Yet
`the generics industry’s spending on drug discovery,
`development and commercialization is less than a quarter
`of the whole.
`Because of far less spending on R&D, the generic drug
`manufacturers are able to offer drugs at prices lower than
`brand-name drugs. A generic usually sells at a price 30%
`lesser than the brand-name drug. Consequently,
`the
`generics substantially erode the market share of the brand-
`name drugs, triggering the branded drug companies to
`start aggressive evergreening.
`Another important reason to take a closer look at this
`practice is the huge other market that generics cater to: poor
`and underdeveloped countries. Cheap copies of these costly
`drugs are essential to save lives there. Often giant pharma-
`ceutical companies, with their superior resources, rely on
`litigation to extend their market exclusivity. The smaller
`generic drug manufacturing companies are severely handi-
`capped by the heavy costs involved in litigation. A small
`generic drug company cannot hope to take on a massive
`multinational pharmaceutical company in a lawsuit, leaving
`little or no option for the generic company. Moreover, the
`delay caused by litigation means all the more time for the
`branded manufacturer to monopolize the market and lost
`time for the generic manufacturer.
`Evergreening through patent strategies allows the
`branded drug company to retain its exclusive right to
`market the drug. Secondary patents thus act as a “barrier”
`to generic competitors. This essentially forces the generic
`manufacturer to choose between the options of simply
`waiting for all the patents to expire or enter into a legal
`battle and risk the associated costs and delays. Some might
`argue that the much stricter global intellectual property
`regime that we have since 2005 will adversely affect the
`
`5.3. The consumer
`
`In the battle between the generic drug and the branded
`drug manufacturers, the consumer seems to be the biggest
`loser. Full-fledged generic competition between 5 and 6
`manufacturers typically leads to 70–80% lesser expenditure
`to the consumer. When the generic drug manufacturer is
`prevented from entering the market the patient is left with
`no option but to stick to the highly priced brand-name
`drug. Moreover, the branded drug manufacturers should
`strive to educate the consumer about the reasons for
`a higher cost of the drug even after expiry of the monopoly
`period. A conscious consumer will not overlook important
`parameters like quality and safety over price.
`Great injustice is done to the consumer when ever-
`greening is done through patenting strategies involving
`supposedly improved successor drugs that can be barely
`called improvements. When the consumer could have opted
`for cheaper generic drugs, pharmaceutical giants mislead
`her into transferring to the more expensive successor drug.
`Thus the consumer unwittingly continues to serve the
`interests of the pharmaceutical company through the highly
`priced drug when a generic equivalent could have been
`obtained at a lower price.
`
`6. The spirit of patent laws and healthy competition
`
`The current practices of evergreening are clearly in
`conflict with the intended purpose of patent which is not so
`much to protect the inventor as to promote development
`through creativity. Evidently, evergreening practices
`undermine this noble intent of the patent laws by utilizing
`loopholes in the existing regulation. Companies attempt to
`prolong their monopoly by filing patents for aspects that
`can be hardly called invention. Minor modifications, new
`uses of existing drugs and even new dosage regimes are
`often used to extend patents. Such practices, although in
`compliance with the law, are against the spirit of the patent
`laws. An imp