Drug Reimportation A Threat to Safety…or Profits

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Drug Reimportation A Threat to Safety…or Profits Powered By Docstoc
					                                                                                         directly or indirectly (through such
                                                                                         spokespeople as hired doctors) market-
                                                                                         ing medications for diseases for which
                                                                                         the FDA has never found the drugs to
                                                                                         be safe or effective. A case in point is
                                                                                         Pfizer’s epilepsy drug, Neurontin; 80%
Drug Reimportation:                                                                      of the company’s billion-dollar
                                                                                         Neurontin sales are owed to such “off-
A Threat to Safety…or Profits?                                                           label” use. Although doctors may
                                                                                         legally prescribe drugs for “off-label”
From 2002 to 2003, the average cost of                                                   uses, pharmaceutical companies’ aggres-
drugs most commonly prescribed to                                                        sive and illegal marketing of drugs for
seniors rose almost three and a half                                                     those purposes suggest a less than sin-
times the rate of inflation. Drug prices                                                 cere commitment to place drug safety
in the U.S. are the highest in the                                                       over profit.
world, and their continuous climb is                                                          Then there are drugs that have
forcing many patients to either give up                                                  never received any FDA approval, such
needed medications or look for other                                                     as Solvay Pharmaceuticals’ Estratest, a
ways to purchase them. Growing num-                                                      hormone replacement therapy (HRT)
bers of Americans have found a solu-                                                     drug that has reached sales of over
tion to their problem: filling their pre-                                                $100 million. The FDA has never
scriptions beyond U.S. borders, partic-                                                  approved Estratest for HRT – or any
ularly in Canada, where drug makers                                                      other condition. Such instances of
do not have sole authority over prices.       imported from foreign countries could      unregulated drug sale certainly make
Now the pharmaceutical industry and           be counterfeit, stored improperly, or be   the FDA’s “concerns” about the safety
its allies in Washington are trying to        otherwise dangerous. However, most         of reimportation ring hollow.
stop such drug reimportation by falsely       drugs sold in Canada are exactly the            Despite the pharmaceutical indus-
branding it a threat to patient safety.       same as those sold in the United States,   try and government warnings about the
     The most common objection that           and the pharmaceutical regulatory agen-    dangers of reimportation, many indi-
critics raise against drug reimportation      cies of the U.S. and Canada have very      viduals, organizations, cities, and even
is that it is a safety hazard because drugs   similar safety and efficacy standards as   states are defying the law and buying
                                              well as a history of cooperation.          medications from pharmacies in
                                                   Health Canada, the Canadian           Canada and elsewhere. Consumers,
                                              equivalent of the United States’ Food      especially seniors, continue to take long
                                              and Drug Administration (FDA), has         bus-rides across U.S. borders in order
                                              recently repeated assurances that there    to fill their prescriptions, but many are
                                              is no evidence that any drugs shipped      now placing such orders over the
                                              from Canadian pharmacies to                Internet and through American outlets,
                                              American consumers are unsafe or           like Rx Depot, that buy their supply of
                                              counterfeit. And, despite its alarming     drugs from Canada.
                                              warnings, the FDA has been unable to            The governors of Minnesota,
                                              give a single example of a patient who     Illinois, Iowa, New Hampshire and
                                              died from taking drugs imported from       Wisconsin have all expressed a serious
                                              another industrialized nation.             interest in buying drugs from Canada
                                                   These safety concerns are not only    for state employees, and the mayors of
                                              unfounded but also hypocritical, given     New York and Boston are considering
                                              current drug industry practices. For       following the lead of Springfield,
                                              example, the FDA prohibits companies       Massachusetts in purchasing medica-
                                              from marketing drugs for conditions        tions from Canada for city employees.
                                              other than those approved by the FDA,           In response to the tremendous
                                              yet many companies make a habit of         demand for cheaper, imported drugs,
                                                                                                                   continued on page 2
                                                                                          als. The Campaign for Better Health
PAL Groups Push Reimportation                                                             Care of Illinois connects web users and
Through Grassroots Efforts                                                                members to an online petition that
                                                                                          demands a change in federal policy on
                                            began organizing bus trips                    reimportation to allow consumers to
                                            eight years ago to provide seniors access     purchase drugs from Canada. And
                                            to more affordable drugs in Canada.           some groups, like Health Care For All
                                            Bus trips have been an innovative strate-     of Connecticut, are working behind
                                            gy for other members as well, including;      the scenes to encourage municipalities
                                            Alliance for Retired Americans, Citizens      to look at reimportation as a viable
                                            for Consumer Justice (of Pennsylvania),       approach to rising health care costs for
                                            Health Care for All of Connecticut,           city employees.
Courtesy of Minnesota Senior Federation
                                            Massachusetts Senior Action Council,               The increased attention highlight-
                                            Wisconsin Citizen Action and United           ing the greater affordability of
                                            Senior Action of Indiana.                     Canadian drugs has led to an increased
                                                 These bus trips have proven highly       U.S. demand for drugs from both
Widespread national interest in the         successful in numerous arenas. Seniors        Canadian pharmacies and mail-order
reimportation of prescription drugs has     with high drug costs have been able to        services. A plethora of companies now
exploded of late, but the issue did not     obtain critical savings, while fostering      offer mail-order prescriptions.
emerge quite so suddenly. For a num-        greater public awareness of the price              In response to this growth in
ber of years, grassroots advocates have     differentials between the two countries.      providers, United Senior Action of
been rallying consumers around the          Consumers, the media, and lawmakers           Indiana partnered with other groups to
issue of reimportation because of the       have all been drawn into the battle over      screen 35 Canadian exporters for quali-
significant savings available just north    reimportation. Despite drug manufac-          ty and safety and then, confident in
of the border. PAL members have             turers’ massive lobbying budget, law-         their ability to ensure high-quality ser-
been, and continue to be, leaders in        makers at municipal and state levels          vice, contracted with two of the
these efforts to help consumers buy rea-    have drafted plans that use reimporta-        exporters to provide additional savings
sonably priced prescription drugs from      tion as part of the fiscal solution to ris-   for their members. The average savings
Canada. This article highlights just a      ing drug costs.                               for the members who utilize the pro-
few of those efforts.                            PAL members have found ways to           gram is now at $1,715 per year.
     The Minnesota Senior Federation        support both local and federal propos-        Similarly, Minnesota Senior Federation
                                                                                                                    continued on page 3

DRUG REIMPORTATION                          taking action against businesses that         of drugs to Canadian pharmacies and
continued from page 1
                                            import drugs from Canada, and has             raised prices there, leading Canadian
                                            already ordered Rx Depot to shut              pharmacists to complain of shortages
                                            down. Major pharmaceutical compa-             and some members of Congress to
the U.S. House of Representatives easily    nies, including GlaxoSmithKline, Pfizer,      accuse the companies of illegally collud-
passed a bill this year allowing the U.S.   and AstraZeneca, have cut their supply        ing to limit the supply of medicine. As
to import drugs from 25 countries.                                                        drug prices in the U.S. continue to sky-
However, the bill was never voted on by                                                   rocket, and increasing numbers of
the Senate. The recently-passed                                                           patients are forced to choose between
Medicare prescription drug bill not only                                                  medicine and other necessities, the
prohibits reimportation unless the Bush                                                   debate on drug reimportation is unlike-
administration certifies its safety (the                                                  ly to subside. Drug makers and their
Secretary of Health and Human                                                             supporters will continue to argue that
Services has already said he would never                                                  importing drugs is unsafe, but, as Dr.
do so), but even prohibits the govern-                                                    Stephen Schondelmeyer of the
ment from using the Medicare program                                                      University of Minnesota reminds us, “a
to negotiate discounts with drug mak-                                                     drug that is not affordable is neither
ers. Meanwhile, the FDA has begun                                                         safe nor effective.”

    PAL • Winter 2004
                                                                                           Newly Filed Litigation
                                                                                           OxyContin ®
                                                                                           OxyContin is a widely prescribed
                                                                                           pain relief medication manufactured
                                                                                           by Purdue Pharma L.P. (Purdue).
                                                                                           On January 6, 2004, PAL filed a suit
                                                                                           against Purdue alleging that the
                                                                                           drug company reaped billions in
                                                                                           unlawful profit from OxyContin con-
                                                                                           sumers through fraudulent patents
                                                                                           and sham lawsuits that blocked
                                                                                           generic alternatives from coming to
                                                                                           market. The suit was brought on
                                                                                           behalf of Connecticut Citizen Action
                                                                                           Group, Health Care For All and an
                                                                                           individual from Wisconsin.
                                                                                                The suit alleges that Purdue has
                                                                                           been illegally marketing and selling
                                                                                           OxyContin since December 1995,
                                                                                           when it received approval from the
                                                                                           Food and Drug Administration
                                                                                           (FDA). To win its patents on the
                                                                                           drug in the first place, Purdue told
                                                                                           the federal patent office that
Courtesy of Massachusetts Senior Action Council                                            OxyContin was unique because of
                                                                                           its effectiveness at very low
GRASSROOTS                                                                                 dosages. The suit charges that
continued from page 2
                                                                                           Purdue knew that there was no evi-
                                                                                           dence to support this assertion at
has contracted with a Canadian phar-              organizations, has launched a            the time the company filed for the
macy to assist members in obtaining               nationwide boycott – nicknamed           patents and therefore received
better rates through a trustworthy                the “Tums Down” campaign —               exclusive rights to the drug that it
mail-order program. A recent exami-               against Glaxo’s over-the-counter         did not deserve.
nation of six commonly prescribed                 products, such as Tums and                    The PAL lawsuit comes on the
medications showed that this program              Aquafresh. Many PAL members,             heels of a decision in the case
saved members an average of 54%                   including Congress of California         brought by Purdue against the
                                                                                           generic manufacturer who attempt-
over U.S. mail-order pharmacies.                  Seniors and the Massachusetts
                                                                                           ed to market a less expensive,
     These dramatic potential savings             Senior Action Council, are actively
                                                                                           generic version of OxyContin. In
have fueled the rapid expansion of a              supporting the effort. In addition,      that case, a federal judge ruled that
Canadian reimportation market; of                 Health Care For All in Connecticut       Purdue’s patents on the drug were
course, this boom has not escaped                 is encouraging their state Attorney      invalid because of Purdue’s material
the notice of drug manufacturers try-             General to file suit against Glaxo for   misrepresentations to the federal
ing to maintain their inflated profits.           potential anti-trust violations.         patent office. The judge based his
GlaxoSmithKline and other drug                         Absent the sort of grassroots       ruling, in large part, on the trial tes-
makers have instituted reprisal mea-              action that’s been undertaken by         timony of OxyContin’s inventor,
sures, such as monitoring pharmacy                PAL member organizations, reim-          who admitted that he had done no
sales and even restricting sales to               portation would not have emerged as      clinical studies or had no other evi-
                                                                                           dence to support Purdue’s claim
Canadian suppliers. Despite this                  the national issue it is today. PAL
                                                                                           that lower dosages of the drug
industry maneuvering, determined                  groups have shown that grassroots
                                                                                           were effective in treating pain.
consumer groups have pledged to use               measures can offer sensible solutions,        This case is yet another in a
their buying power to fight back.                 generate broad national interest, and    string of PAL actions aimed at mak-
     The New York Statewide Senior                successfully confront the industry’s     ing prescription drugs more afford-
Action Council, in partnership with               efforts to maintain their stranglehold   able and ending illegal conduct by
various Canadian and American                     on prescription drug prices.             the pharmaceutical industry.

                                                                                                             PAL • Winter 2004
Update on Previously Filed Litigation
                                          charging that the company illegally      tice” of selling drugs to physicians
 Please go to PAL website                 extended its monopoly on                 at prices well below the reimburse-               Augmentin by applying for patents        ment cost charged to Medicare. In
 for additional information and           that duplicated the original patent      May 2002, PAL’s lawsuit was consol-
 documents.                               (“double patenting”) and by sub-         idated with cases around the coun-
                                          mitting those patents to the FDA,        try. On September 6, 2002 Plaintiffs
                                          thereby keeping other companies          filed a Master Consolidated Class
Adalat ®                                  from developing generic versions of      Action Complaint detailing specific
Background: Adalat (nifedipine) is a      Augmentin.                               allegations against each of approxi-
prescription drug used to treat                                                    mately twenty defendants.
hypertension and other cardiac            Update: In the underlying patent lit-
conditions. In July 2002, PAL filed       igation, the U.S. Court of Appeals       Update: In May 2003, Judge Saris
suit against Elan and Biovail, two        for the Federal Circuit affirmed         issued a decision on the Defendants’
generic drug manufacturers. The           summary judgment against GSK,            Motions to Dismiss the Master
complaint alleges that consumers          holding that numerous patents are        Consolidated Class Action
of the 30mg and 60mg dosages of           invalid for “nonstatutory double         Complaint, denying those motions in
both the generic and brand name           patenting.” The court found that         part, and giving Plaintiffs an oppor-
form of Adalat have been hurt by          GSK’s earlier patent had expired,        tunity to amend the complaint in
the collusion of Elan and Biovail,        and GSK could not use later-issued       order to meet her concerns. On
who agreed to divide the market           “nearly identical” patents to extend     June 12, 2003, Plaintiffs filed with
for the 30mg and 60mg dosages             the life of the original patent so as    the Court a 300-page Amended
between them in violation of feder-       to exclude generic drugs from the        Master Consolidated Complaint.
al and state antitrust laws. Under        marketplace. This decision allows us     Defendants filed another round of
this illegal agreement, Biovail paid      to move forward with our case.           Motions to Dismiss, which were fully
Elan approximately $45 million and,                                                briefed during the fall of 2003. Oral
in return, Elan shared its profits        Court: U.S. District Court, Eastern      argument on those motions took
with Biovail.                             District of Virginia (Judge Smith)       place in November 2003 and the
                                                                                   Court has taken them under advise-
Update: All Adalat cases have been        Average Wholesale Price                  ment. In the meantime, Plaintiffs’
centralized in one court. Elan and        Background: In December 2001,            attorneys have continued to press
Biovail filed a Motion to Dismiss on      PAL filed suit against numerous          for discovery from the Defendants.
October 15, 2003. Among other             drug companies for manipulating          During the hearing on Motions to
things, the Defendants argue that         the “average wholesale price”            Dismiss in November, Judge Saris
the organizational Plaintiffs (Health     (AWP). This lawsuit alleges that         orally lifted her stay on further dis-
Care For All, AFSCME and Council          there is an industry-wide scheme to      covery. Plaintiffs attorneys’ are cur-
47) lack standing to sue on behalf        defraud the U.S. health care con-        rently reviewing documents previ-
of their members. Our opposition          sumer by charging inflated prices        ously produced by Defendants; as a
to the Motion to Dismiss was filed        for critically-needed medications.       result of Judge Saris’ ruling, a great
on December 15, 2003.                     Specifically, the lawsuit charges that   deal of additional discovery from
                                          since 1993 the companies have            Defendants as well as third parties is
Court: U.S. District Court, District of   engaged in “a pattern and prac-          forthcoming.
Columbia (Judge Leon)
                                                                                   Court: U.S. District Court, District of
Augmentin ®                                                                        Massachusetts (Judge Saris)
Background: Augmentin is
GlaxoSmithKline’s (GSK) brand                                                      B e x t r a®
name for the drug amoxicillin/clavu-                                               Background: Bextra is a prescription
lanate potassium and is used in the                                                painkiller/anti-inflammatory drug
treatment of lower respiratory, mid-                                               used for treatment of osteoarthritis,
dle ear, sinus, skin and urinary tract                                             rheumatoid arthritis and primary
infections. It is an extremely prof-                                               dysmenorrhea. In December 2002,
itable prescription drug reportedly                                                PAL filed suit in California on behalf
earning $2.05 billion in annual sales                                              of Congress of California Seniors
worldwide in 2001. In June 2002,                                                   against Pharmacia and Pfizer assert-
PAL filed litigation against GSK                                                   ing illegal and fraudulent actions to

  PAL • Winter 2004
promote Bextra for “off-label use.”       cially maintain a monopoly on the       Claritin ®
Although the FDA approved Bextra          manufacturing, distribution and         Background: Until Claritin began
for certain conditions, it specifically   sales of BuSpar.                        being sold over-the-counter recently,
rejected Bextra for treatment of                                                  Claritin was both America’s most
acute pain in adults, citing safety       Update: In March 2003, PAL              widely prescribed and advertised
and efficacy concerns.                    Plaintiffs reached final settlement     allergy drug. In 2000, Claritin was
Nonetheless, the Defendants               agreements with BMS including           the seventh-ranked prescription
engaged in a number of illegal            monetary damages, prohibitions on       drug, with sales of approximately
activities to promote the drug for        future bad conduct and extensive        $1.7 billion. On August 9, 2001 PAL
the treatment of acute pain in            reporting requirements. BuSpar          filed a class action lawsuit in New
adults, including hiring a company        users who purchased the drug            Jersey state court alleging that
— a subsidiary of one of the world’s      between January 1, 1998, and            Claritin’s maker Schering-Plough has
largest advertising companies — to        January 31, 2003 may be eligible for    engaged in a campaign of misrepre-
conduct a study, which was later          a refund and should visit the settle-   sentation that has artificially
found by independent sources to           ment website www.busparsettle           increased the demand and price for
be unpersuasive and insignificant. The deadline to file a        the drug, a drug that Schering-
                                          claim for payment under the settle-     Plough’s own studies have shown to
Update: On December 9, 2003, a            ment was December 5, 2003.              be effective for only 50% of its users.
hearing was held on Defendants’
motions to strike and to dismiss the      Court: U.S. District Court, Southern    Update: In June 2002, the court
                                          District of New York (Judge Koeltl)     issued its decision granting the
                                                                                  Defendant’s Motion to Dismiss.
                                          Cipro ®                                 PAL attorneys filed a notice of
                                          Background: Cipro is the bestselling    appeal and in September 2002,
                                          antibiotic in the world. In October     filed the appellate brief. A hearing
                                          2001, PAL joined federal litigation     on the appeal was held in May
                                          against Bayer, the maker of Cipro,      2003. This summer the intermediate
                                          Barr Laboratories, and two other        appellate court affirmed the lower
                                          generic drug companies. The law-        court ruling. A petition was filed to
                                          suit alleges that Bayer Corporation     the New Jersey Supreme Court for
                                          unlawfully agreed to pay three of its   further review, and on November
                                          competitors – Barr Laboratories,        14, 2003, the Court denied certifi-
                                          Rugby, and Hoechst-Marion Roussel       cation. This is a very disappointing
                                          – a total of $200 million to get them   decision that terminates our efforts
                                          to abandon their efforts to bring       on this drug, but we remain deter-
                                          cheaper generic versions of Cipro       mined to find a way to stop misuse
                                          to the market. There are also sever-    of prescription drug advertising.
Complaint. Judge Person granted
Defendants’ requests on a tentative       al similar state cases that are mov-
basis. However, following oral argu-      ing forward on Cipro.                   Court: Superior Court of New
ment by PAL’s attorney, Judge                                                     Jersey, Appellate Division
Person took the matter under sub-         Update: In May 2003, the Court
mission. We await a final ruling.         granted in part and denied in part      Estratest
                                          defendants’ motion to dismiss the       Background: In August 2003, PAL
Court: Superior Court of California,      federal Cipro case. As a result of      filed a suit against Solvay
County of Los Angeles (Judge              this decision, the PAL organiza-        Pharmaceuticals, Inc. (Solvay) alleg-
Person)                                   tions were dismissed from the           ing the pharmaceutical firm illegally
                                          case on technical grounds.              and fraudulently marketed the drug
BuSpar ®                                  Although the federal case was           Estratest as an effective treatment
Background: BuSpar is an anti-anxi-       met with some pre-trial difficul-       for hot flashes, despite the fact that
ety drug widely prescribed to the         ties, it is proceeding with signifi-    it has never been approved by the
elderly and people with chronic ill-      cant discovery and motion prac-         Food and Drug Administration
nesses. In April 2001, PAL filed suit     tice on class certification.            (“FDA”). Estratest is a combination
against Bristol-Myers Squibb Co.                                                  hormone replacement therapy drug
(BMS) alleging that the company           Court: U.S. District Court, Eastern     that contains esterified estrogen
has employed illegal tactics to artifi-   District of New York (Judge Trager)     and methyltestosterone (an andro-

                                                                                                    PAL • Winter 2004
gen). The drug is primarily used by     new patents were invalid, PAL filed      ment that is often prescribed in con-
menopausal women who suffer             suit against McNeil. The lawsuit         junction with high blood pressure
from moderate to severe vasomotor       alleges that the drug company ille-      medication. In June 2001, PAL filed
systems (hot flashes). The lawsuit      gally manipulated the patent system      suit alleging that that Schering-
was filed in the wake of an April       to prevent generic competition from      Plough Corp., Upsher-Smith
2003 announcement by the FDA            entering the market.                     Laboratories and American Home
that it now believes there is no sub-                                            Products Corp. illegally agreed to
stantial evidence proving that estro-   Update: In August 2002, the U.S.         keep a generic version of K-Dur off
gen/androgen therapies are effec-       District Court for the Eastern           the market, thereby depriving con-
tive in treating hot flashes.           District of Pennsylvania stayed the      sumers of a less expensive generic
                                        litigation until a decision by the       version of the drug.
Update: On November 5, 2003,            federal circuit court in the underly-
Judge Hess sustained Solvay’s           ing patent litigation appeal.            Update: Defendants have filed a
Motion to Dismiss to the Complaint      Recently, the federal circuit issued     Motion to Dismiss and Plaintiffs
with leave to amend. On December        a disappointing ruling in which it       have filed a Motion to Remand a
5, 2003, Plaintiffs filed their First   held that while the generic compa-       portion of the K-Dur cases back to
Amended Complaint. Solvay’s             ny’s patent litigation attack was        state court. We are awaiting court
response to the First Amended           valid, McNeil’s defense of its patent    decisions on these motions. In the
Complaint is due on January 5,          was not frivolous. As a result, the      meantime, PAL attorneys continue
2004, and it is expected that Solvay    case was dismissed.                      to review documents in the case.
will file a new Motion to Dismiss.                                               On December 18, 2003, the Federal
                                        Court: U.S. District Court, Eastern      Trade Commission issued a signifi-
Court: Superior Court of California,    District of Pennsylvania (Judge Katz)    cant, helpful opinion, reversing its
County of Los Angeles (Judge Hess)                                               own administrative law judge and
                                        K-Dur 20 ®                               finding that antitrust conduct did
                                        Background: K-Dur is the fourth          indeed take place.
Imodium ®
                                        most frequently prescribed drug for
Background: Imodium (loperamide)
                                        the elderly. It is a potassium supple-   Court: U.S. District Court, District of
is an over-the-counter drug widely
                                                                                 New Jersey (Judge Greenaway)
used to treat diar-
rhea. It is manufac-
tured by McNeil-
PCC, Inc. the mak-
ers of such drugs
as Tylenol and
Motrin. In the early
nineties, just as the
original patent on
loperamide was
set to expire,
McNeil added an
agent, sime-
thicone, to
Imodium, naming
the new formula
McNeil got four
patents relating
to this addition
of simethicone.
In July 2002, in
response to a
court decision
that the four

  PAL • Winter 2004
Lupron ®                                                                           generic manufactures, paving the
Background: Lupron is a prescrip-                                                  way for the antitrust litigation to
tion drug that is manufactured, mar-                                               proceed. However, a decision on
keted and sold by Abbott                                                           summary judgment with respect to
Laboratories, Takeda Chemical                                                      a few generic manufacturers is still
Industries, and TAP Pharmaceuticals                                                outstanding, and the antitrust litiga-
(a wholly owned joint venture of                                                   tion will not proceed until after the
Abbott and Takeda) as a treatment                                                  Court has issued its decisions on
for prostate cancer. In September                                                  these final motions.
2001, PAL filed suit alleging that
the Defendants created and imple-                                                  Court: U.S. District Court, District of
mented a fraudulent marketing and                                                  New Jersey (Judge Falk)
sales scheme to substantially
increase the sale of Lupron and                                                    Neurontin ®
reap unlawful profits at the expense                                               (Off-Label Promotions)
of Medicare patients. The following                                                Background: In February 2003, PAL
month (October 2001) TAP pharma-                                                   filed suit against Pfizer and its sub-
ceuticals agreed to settle a criminal                                              sidiary, Parke-Davis, accusing the
case brought against it by the fed-                                                companies of circumventing Food
eral government, pleading guilty                                                   and Drug Administration (FDA) reg-
and agreeing to pay $875 million.                                                  ulations to promote scientifically
This was the largest health care          has been extremely profitable for        unproven “off-label” use of their
fraud settlement in history.              both Warner-Lambert and its parent       drug. The suit alleges that in 1995
                                          company Pfizer, generating in            Parke-Davis decided that it did not
Update: In December 2003, almost          excess of $1.3 billion in worldwide      want to undertake the clinical trials
a year since oral argument on the         revenues in 2000. In April 2002, PAL     that the FDA requires in order to
matter, Judge Stearns issued his rul-     filed suit against Warner and Pfizer     approve new uses for a prescription
ing on Defendants’ Motions to             alleging that they listed illegitimate   drug. The company instead created
Dismiss. The ruling was a very good       secondary patents on Neurontin in        an extensive illegal promotional
one for Plaintiffs. In upholding most     order to keep more affordable            campaign to get more patients to
of the claims against Defendants          generic versions off the market.         use Neurontin, which had only
and allowing the litigation to pro-       The lawsuit also alleges that the        been approved for epilepsy.
ceed, Judge Stearns – in reference        companies filed baseless patent          Disguised as “medical education”
the Defendants’ arguments that the        infringement lawsuits against poten-     for the doctors or “consulting” for
prices published by Defendants            tial generic competitors. As a result    the company, that campaign includ-
were analogous to “sticker prices”        of these actions, consumers who          ed illegal cash kickbacks to physi-
and Defendants therefore cannot be        take Neurontin have never had the        cians and other sales ploys to
held liable for fraud – observed that     opportunity to buy lower-cost            pump up sales of the drug for non-
“[t]here is a difference between a        generic versions of Neurontin and        FDA approved uses.
‘sticker price’ and a ‘sucker price.’”    have been paying an artificially
As a result of this ruling, Plaintiffs    inflated price for the drug.             Update: The initial status confer-
have moved ahead with additional                                                   ence was held on January 7, 2004,
document discovery as well as             Update: In March 2003, the court         at which time a filing and briefing
numerous depositions of TAP,              ordered that the actions be coordi-      schedule for motions was set.
Abbott and Takeda.                        nated and consolidated for pretrial      Discovery is now proceeding.
                                          purposes. In addition, further pro-
Court: U.S. District Court, District of   ceedings were suspended until the        Court: Superior Court of California,
Massachusetts (Judge Stearns)             court hearing on the underlying          County of Los Angeles (Judge Mohr)
                                          patent litigation between Pfizer and
                                          generic manufacturers has decided        Pharmacy Benefit
Neurontin ®                               all of the summary judgment              Managers (PBMs)
                                          motions in those actions. With           Background: Pharmacy Benefit
(Patent-Related Litigation)
                                          respect to those summary judgment        Managers (PBMs) are intermediaries
Background: Neurontin is a widely         motions that have been decided to        between drug manufacturers and
prescribed anti-convulsant for the        date, the Court has granted sum-         purchasers that specialize in the
treatment of epilepsy. Neurontin          mary judgment in favor of the            administration and management of

                                                                                                     PAL • Winter 2004
prescription benefit programs.           finding that GSK made material mis-
PBMs contract with a range of            representations to the Patent Office
clients, including health plans and      and that the Relafen patent was
employers. Drug manufacturers give       invalid and unenforceable. GSK lost
PBMs rebates to secure a favorable       its appeal of this decision. As a
placement on their formularies or        result of GSK’s conduct, consumers
preferred drug lists. In March 2003,     have been forced to pay an artificial-
PAL brought suit against the             ly inflated price for Relafen for sev-
nation’s four largest PBMs (Advance      eral years while a less expensive
PCS, Caremark Rx, Inc., Express          generic version of the drug was kept
Scripts, and Medco Health) in            off the market.
California under the state’s Unfair
Competition Law. The lawsuit             Update: In a positive case develop-
alleges that the PBMs have illegally     ment, on November 24, 2003,
contributed to escalating drug costs     Judge Young certified two separate
and have failed in their fiduciary       classes of indirect purchasers of
duty to those client health plans by     Relafen from a select number of
failing to pass along rebates and        states: one based on the antitrust
other discounts.                         and consumer protection claims and
                                         the other based on the claim for
Update: The parties are currently        unjust enrichment. Notice to these
trying to reach agreement on a           classes will begin soon. In the mean-     Update: This PAL lawsuit has been
Protective Order. The hearing on         time the direct purchasers, who           consolidated with the AWP litiga-
all motions – as well as a status con-   were set to go to trial on January 5,     tion in Massachusetts. (See above).
ference — is set for January 28,         2004, have settled their case with
2004. Discovery remains stayed           GSK. The trial for the indirect pur-      Court: U.S. District Court, District of
until after the pleadings and            chasers is set to begin in June 2004.     Massachusetts (Judge Saris)
motions are resolved.
                                         Court: U.S. District Court, District of   Tamoxifen
Court: Superior Court of California,     Massachusetts (Judge Young)               Background: Tamoxifen is the most
County of Los Angeles (Judge                                                       commonly prescribed drug to treat
Lichtman)                                Remicade ®                                women with breast cancer. In May
                                         Background: Remicade is an expen-         2001 PAL filed suit against
Relafen ®                                sive prescription drug used in treat-     AstraZeneca, maker of Tamoxifen,
Background: Relafen is a widely-         ing Crohn’s disease and moderate          and Barr Laboratories, sole distribu-
used anti-inflammatory drug. In          to severe rheumatoid arthritis.           tor of a generic form of Tamoxifen.
February 2002, PAL filed suit against    Remicade is manufactured and mar-         The lawsuits allege that Astra-
GlaxoSmithKline Corporation and its      keted by Centocor, Inc., a wholly         Zeneca and Barr illegally colluded
predecessors (collectively “GSK”)        owned subsidiary of Johnson &             to keep the price of Tamoxifen high
alleging that GSK fraudulently           Johnson, Inc. In April 2002, PAL          and claim that there is no true
obtained a patent on Relafen in          filed a lawsuit in state court in New     generic of Tamoxifen on the market
order to prevent a generic version       Jersey alleging that Centocor and         (though a cheaper generic form of
of Relafen from coming to market.        Johnson & Johnson illegally profit-       Tamoxifen finally became available
Internal documents from GSK reflect      ed by overcharging Medicare and           in February 2003, at the expiration
that GSK knew that a patent should       Medicare patients who take                of the allegedly illegal agreement
not be issued. Three generic drug        Remicade through gross overstate-         between AstraZeneca and Barr).
manufacturers later filed applica-       ment of the Average Wholesale
tions for a generic Relafen, certify-    Price (AWP). The complaint further        Update: In May 2003, the Court
ing that the Relafen patent was          alleges that Centocor has given           granted Defendants’ Motion to
invalid and unenforceable. In            providers discounts that reduce the       Dismiss the case. PAL attorneys filed
response, GSK sued the generic           actual amount that they pay for the       an appeal. The Defendants moved
manufacturers. In a non-jury trial on    drug while simultaneously encour-         to transfer the appeal from the
the underlying patent suit,              aging those providers to charge           Second Circuit to the Federal Court,
Massachusetts Federal District Court     Medicare and patients for the full        for tactical reasons. The Motion to
Judge Reginald Lindsay ruled in          price based on the AWP and pock-          Transfer was heard on September
favor of the generic manufacturers       et the difference.                        23, 2003. The panel of judges

  PAL • Winter 2004
 Funding supporting the               Prescription Access Litigation Project (PAL)
 Prescription Access
 Litigation Project:                                                             Maine
                                        The Prescription Access Litigation       Consumers for Affordable Health Care
 The Atlantic Philanthopies             (PAL) project participants agree to      Maine People’s Alliance
                                        work in a collaborative effort: (a) to
 The Nathan Cummings
                                        achieve our shared mission of cre-       Maryland
                                        ating substantial economic value         Maryland Citizens’ Health Initiative
  The George Gund                       for consumers in order to remedy
  Foundation                            past unlawful practices of pharma-       Massachusetts
 The Rockefeller Family Fund            ceutical companies; and (b) to           Health Care For All
                                        achieve meaningful change in the         Health Law Advocates
                                        way the pharmaceutical industry          Lynn Health Task Force
decided that the case would             does business in order to increase       Massachusetts Breast Cancer Coalition
remain in the Second Circuit. The       access to affordable prescription        Massachusetts PIRG
matter is now being briefed on          and other drugs.                         Massachusetts Senior Action Council
the merits.                                                                      New England Regional Council of
                                      PAL Participants                           Women’s Health Institute (Massachusetts)
Court: Second Circuit Court of        State-Based Organizations
Appeals, on appeal from the U.S.                                                 Michigan
District Court, Eastern District of   Arizona                                    Public Interest Research Group in
New York (Judge Glasser)              Arizona Citizen Action                       Michigan
                                      Senior Disabled Arizona Protest
Wellbutrin ®                                                                     Minnesota
Background: Wellbutrin is a drug      California                                 Minnesota COACT
used to treat depression. While       California PIRG                            Minnesota Senior Federation
                                      Congress of California Seniors
the main ingredient of Wellbutrin
                                      Gray Panthers of Sacramento                Mississippi
has been off-patent for several       Legal Assistance to the Elderly            Mississippi Human Services Coalition
years, its extended-release for-      San Francisco Senior Action Network        Mississippi Health Advocacy Program
mula, Wellbutrin SR, is not. In
July 2002, PAL filed suit against     Colorado                                   Nebraska
GlaxoSmithKline (GSK), maker of       Colorado PIRG                              Nebraska Appleseed
Wellbutrin and Wellbutrin SR.         Colorado Progressive Coalition
The lawsuits allege that GSK                                                     New Hampshire
filed baseless patent lawsuits        Connecticut                                New Hampshire Citizens Alliance
                                      Connecticut Citizen Action Group
against generic drug companies
                                                                                 New Jersey
in order to delay the manufac-        District of Columbia                       New Jersey Citizen Action
ture and sale of generic versions     Nonprofit Clinic Consortium                New Jersey PIRG
of Wellbutrin SR. The result of                                                  Public Interest Law Center of New Jersey
this misuse of the patent system      Florida
is that people suffering from         Florida Alliance for Retired Americans     New Mexico
depression were forced to pay         Human Services Coalition of Miami-         Health Action New Mexico
higher prices for extended-              Dade County                             Senior Citizens’ Law Office
release versions of a medication
                                      Idaho                                      New York
vital to their mental health.
                                      Idaho Community Action Network             Brooklyn-wide Interagency Council
                                      Living Independence Network                   of the Aging
Update: In the underlying patent      Corporation (Idaho)                        CAIRE
litigation, the Federal Circuit                                                  Citizen Action of New York
Court of Appeals held that the        Illinois                                   JPAC for Older Adults
district court in Florida erred in    Campaign for Better Health Care            Gay Men’s Health Crisis
its construction of the patent        Champaign County Health Care Consumers     Ithaca Breast Cancer Alliance
infringement claims. This out-        Citizen Action Illinois                    Long Island Coalition for a National
come undermines our claims                                                          Health Plan
                                      Indiana                                    Long Island Progressive Coalition
                                      United Senior Action of Indiana            Metro New York Health Care for All
Court: U.S. District Court,           Kansas                                     New York Statewide Senior Action Council
Eastern District of Pennsylvania      Kansas Association for the Medically       Rockland County Senior Health Care
(Judge Kauffman)                        Underserved                                 Coalition

                                                                                                     PAL • Winter 2004
Utica Citizens in Action                 Rhode Island                         Wisconsin
                                         Health Care Organizing Project       Wisconsin Citizen Action
North Carolina                           Ocean State Action
North Carolina Fair Share                                                     National organizations
North Carolina Health Access Coalition   South Carolina                       AIDS Action (Washington D.C.)
North Carolina PIRG                      South Carolina Appleseed Legal       Alliance for Retired Americans
                                           Justice Center                     American Federation of State
Ohio                                                                             County and Municipal Employees
Universal Health Care Action Network     Tennessee                            Association for Health Center-
  of Ohio                                Tennessee Health Care Campaign          Affiliated Health Plans
Working in Neighborhoods Senior                                               Boston Women’s Health Book Collective
  Action Coalition                       Texas                                Community Catalyst
                                         Texas Alliance for Human Needs       Medicare Rights Center
Oregon                                                                        National Health Law Program, Inc.
Oregon Consumers League                  Utah                                 USAction
Oregon Health Action Campaign            Utah Issues
Oregon State Public Interest Research                                         The PAL plaintiffs are represented
Group                                    Vermont                              by Hagens Berman LLP.
SEIU Local 503                           Vermont PIRG
SEIU Local 49                                                                 For more information on PAL:
                                         Virginia                             Catherine Lowe,
Pennsylvania                             Virginia Poverty Law Center          Community Catalyst
Action Alliance                                                               Tel: 617-275-2839 F: 617.451.5838
Citizens for Consumer Justice            Washington                           email:
Consumer Health Coalition                Washington Citizen Action            30 Winter Street/ 10th Floor,
Mon Valley Unemployed Committee          Washington PIRG                      Boston, MA 02108
Pennsylvania Alliance for Retired        West Virginia              
Americans                                West Virginia Citizen Action Group

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                                                                                                             BOSTON, MA
                                                                                                           PERMIT NO. 54076

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