Why are drugs expensive in the U.S.? Because other countries decide to pay less

Pfizer is continuing its fight with generic drug manufacturer United Laboratories Inc. (Unilab) in the Philippines over the issue of the validity of the patent on Lipitor (atorvastatin) as Unilab tries to have the patent canceled. Unilab filed its petition for the cancellation of Philippine Patent No. 29149 for Atorvastatin, marketed under the brand name Lipitor, and Pfizer filed a complaint for patent infringement and damages against Unilab for selling its generic anticholesterol drug Avamax, which is priced 30 percent lower than Pfizer's.

Unilab claims that according to the IP Code, as amended by the Cheaper Medicines Act, the patent should not have been granted since it failed to meet the requirements for patentability. Unilab claims the patent is merely an attempt at "evergreening," an abuse of the patent system by patent holders that seek to perpetuate their monopoly over a product beyond the period allowed by law. Opponents claim that before the expiration of the original patent, new applications over the same product with minor modifications are filed so that a new 20-year period of monopoly is obtained through the grant of another patent.

Unilab contends that there is nothing inventive about the Atorvastatin covered by Patent No. 29149 since it is nothing but an isomer of the Atrovastatin compound already disclosed in U.S. Patent No. 4,681,893 (which discloses NCE atorvastatin) and Philippine Patent Nos. 24661 and 26330. Unilab claims that the IP Code, as amended by the Cheaper Medicines Act, explicitly states that an isomer of a known substance shall be considered to be the same substance and is not entitled patentable.

It is true that pharmaceutical companies often file additional patents, including those covering crystalline forms, those in combination with other known compounds, and those for other medical uses. However, there is a public need for continued innovations around an initial discovery. Opponents don't want any further changes to be patentable, and that could shut down innovation in these areas.

Pfizer argues that the patent in question was issued by the IPO after having gone through a thorough examination and was deemed to meet all the criteria for patentability based on Philippine laws.

The Quality Medicine Act amends the IP Code to state that the mere discovery of a new form of a new property of a known substance which does not result in the enhancement of the known efficacy of that substance, or the mere discovery of any new property or new use for a known substance, or the mere use of a known process unless such known process results in a new product that employs at least one new reactant is non-patentable.  In addition, a patent owner has no right to prevent third parties from using a patent without his authorization after a drug or medicine has been introduced in the Philippines or anywhere else in the world by the patent holder or by any party authorized to use the invention. The act also grants the right to import drugs and medicines to any government agency or any private third party.

In the case of drugs and medicines, the patent owner has no right to prevent the testing, using, making or selling of the invention including any data related thereto, solely for purposes reasonably related to the development and submission of information and issuance of approvals by government regulatory organizations required under any law of the Philippines, or of another country that regulates the manufacture, construction, use or sale of any product.

Upon recommendation of the secretary of the Department of Health, the director-general of the Intellectual Property Office can grant a compulsory license for the importation of patented drugs and medicines, with reasonable compensation to the patent owner.

The president of the Philippines also has the power to impose maximum retail prices over any or all drugs and medicines listed in Section 23 of the act, which include: those indicated for treatment of chronic illnesses and life threatening conditions such as, but not limited to, endocrine disorders, cardiovascular diseases, skin diseases, pulmonary diseases, neuropsychiatric disorders or other infectious diseases; those indicated for prevention of pregnancy; and anesthetic agents.

Expect this fight to continue. The stakes are high. According to reports, Lipitor was the largest-selling drug in the world in 2006, earning its producers $12.9 billion in sales the same year alone. In 2008, Lipitor sales internationally were at $13 billion.

Stephen Albainy-Jenei is a patent attorney at Frost Brown Todd LLC, serving up chat at PatentBaristas.com. Write him with comments or questions at Stephen@patentbaristas.com.