States join fight against drug companies for keeping generics off the market.

Dozens of states recently piled onto a growing list of entities bringing lawsuits against brand-name drug makers. The cases allege that the companies raked in millions of dollars in undue profits by engaging in illegal anticompetitive behavior.

The latest wave of litigation, filed by the attorneys general of 29 states, claims Bristol-Myers Squibb Co. fraudulently obtained patents on the cancer-fighting drug Taxol, also known as paclitaxel, to keep cheaper generic versions off the market. The lawsuit also fingers a California-based laboratory, American Bioscience, Inc., for allegedly conspiring with Bristol-Myers to delay production of genetic Taxol. (Ohio v. Bristol-Myers Squibb Co., No. 1:02CV01080 (D.D.C. filed June 4, 2002).)

The plaintiffs claim that wrongful actions by Bristol-Myers resulted in a two-year delay in getting a generic drug to cancer patients, who, during that time, had to pay nearly a third more for Taxol treatments. A standard course of treatments typically costs patients between $6,000 and $10,000.

"Health care costs are already rising at an alarming rate. Keeping less expensive generic drugs off the market longer than necessary only adds to that already serious problem," said Florida Attorney General Bob Butterworth in a statement supporting the lawsuit. "We cannot tolerate any unlawful attempt to delay the availability of lower cost drugs, especially those that are crucial in combating cancer and other life-threatening diseases."

The claims echo those made by generic-drug makers, consumer groups, and government regulators in a slew of lawsuits filed in recent years against several brand-name drug makers. Defendants include GlaxoSmithKline, the maker of the antidepressant Paxil; Schering-Plough Corp., which makes the blood pressure drug K-Dur 20; and Bayer Corp., which manufactures the antibiotic Cipro. And when the states' Taxol suit was filed, Bristol-Myers was already defending class action lawsuits that claimed it had improperly blocked the sale of a generic version of the antianxiety drug Buspar. (Consumer Class Actions Follow Suits by Generic Drug Makers Against Brand-Name Companies, TRIAL, July 2001, at 99.)

The complaint by the attorneys general details Taxol's history. The drug's anticancer properties were first discovered in the 1960s with publicly funded research by the National Institutes of Health. In 1991, Bristol-Myers was granted exclusive rights to market the drug for five years. To lessen congressional concerns at the time that the deal would prove too costly for the public, a company vice president assured representatives that "Taxol was never patented, and no patent is even possible" because research associated with the drug was in the public domain.

Nevertheless, the company did obtain patents falsely, the complaint alleges, by intentionally withholding information from patent examiners that would have revealed that the company's patent applications were meritless.

In late 1997, when the five-year exclusivity period was about to end and a cheaper generic drug was ready to hit the market, the company filed an infringement action that automatically barred the sale of generic versions for either 30 months or until the patents were conclusively ruled invalid, whichever was less. This kept the generic drug off the market until late 2000.

Bristol-Myers's response to the states' claims was guarded. In a letter to employees explaining the lawsuit, Chief Executive Officer Peter Dolan said only that the allegations had "been in litigation for some time," and that the company would assert its defense "in the appropriate forums."

In the meantime, Congress is considering legislation that would limit brand-name drug companies' use of patent laws to block generic competition. The Senate has passed a bill, and a House version is awaiting a vote.

In July, the Federal Trade Commission (FTC) issued a report supporting reform of laws governing the sale of brand-name and generic drugs. It can be viewed at www.ftc. gov/opa/2002/07/genericdrugstudy.htm or requested from the FTC's Office of Public Affairs at [phone].