Business

At war over Prozac

Generic drugmakers fight to sell look-alike copies of the antidepressant

JENNIFER WELLS April 1 1996
Business

At war over Prozac

Generic drugmakers fight to sell look-alike copies of the antidepressant

JENNIFER WELLS April 1 1996

At war over Prozac

Business

Generic drugmakers fight to sell look-alike copies of the antidepressant

Barry Sherman is doing the verbal pyrotechnic thing again. The abrasive, brilliant and wildly litigious Sherman is railing at an interim federal-court injunction that last week left him sitting on millions of buff and green gel caps of fluoxetine. The name means nothing until it is translated from pharmacare-speak to its brand name: Prozac. What Sherman cannot yet sell in Canada is his generic copy of the Godzilla of antidepressants, the first mental health drug in the world to surpass the $2-billion-a-year sales figure. And that’s $2.7 billion Canadian.

At issue is the color and shape of the gel caps. The half-green, half-buff “look,” says Prozac’s creator, U.S. pharmaceutical giant Eli Lilly, is proprietary. Eli Lilly Canada Inc. is seeking a permanent injunction against all Prozac look-alike generic copies. To Sherman, founder and chairman of generic heavyweight Apotex Inc., that is just the latest volley from the “cartel of multinational firms that still dominate the Canadian market, as they do the world market, who are doing everything they can to prevent us from building a Canadian industry and saving money for the health care system, and the governments have done everything they can, starting with Mulroney, to help them.”

Like Hollywood director Oliver Stone following the trajectory of the magic bullet in the Kennedy assassination, Sherman has a more complicated conspiracy theory. It leads him to a company called AltiMed Pharmaceutical Inc. of Mississauga, Ont.

AltiMed, which started business on March 1, was born of the merger of two generic companies, Kenral Inc. and SynCare Pharmaceutical Inc. In the prescription drug business, these two were known as “pseudogenerics,” for they were the offspring of drug giants Upjohn and Hoffmann-La Roche. Their job was to take generic versions of their parents’ brand-name drugs to market. Through AltiMed, the two have joined forces and have brought in a third and equal partner, Glaxo Wellcome Inc., which had been licensing its products to Kenral for generic copy sales. AltiMed now markets the generic versions of its owners’ patent drugs, and, under licence, those of other big-name drug companies. Fifty-one drugs in all. The products are identical to the originator drugs.

This is all too much for Sherman, who has joined forces with his archenemy and chief generic drug rival, Leslie Dan, founder of Novopharm Ltd. Together the Toronto-based firms have taken

their case to the competition bureau in Ottawa. It is, they say, a scheme to squeeze them out. “Generic companies started some 25, 30 years ago, and we were ridiculed, reviled, criticized, taken to court,” says Dan, who emigrated to Canada from Hungary in 1947 and started Novopharm in 1965. “Having gone through all this hardship, we have finally shown there is a generic market in Canada,” says Dan. “And then these companies jump in as Johnnycome-latelies.”

Johnny-come-early is more like it. Because the pseudo-generics are, effectively, the patentees, they can take a product to market before the expiry of a drug’s patent. The true generics cannot. “You call it pre-emptiveness,” says Nelson Sims, president of Eli Lilly Canada. “I would call it another marketing avenue,” one, he adds, that is great for consumers. “It gives them a lower-priced product sooner. That’s competition.” Counters Sherman: “They’re getting together in a conspiracy to do every dirty trick they can to force us out of business.” And when they’ve done that, Sherman predicts, AltiMed will become inactive and prices will rise. “They

say they’re trying to compete in the generic market, but it’s a joke because they don’t bring out a generic except because they know we’re going to.”

Bob Little, president of the recently merged Pharmacia & Upjohn Canada Inc., chuckles when he hears the generics’ lament. “It’s rather like General Motors and Ford being worried that Hyundai will put them out of business,” says Little, who also sits on the board of AltiMed. Apotex and Novopharm Ltd., the country’s two largest generics, control about 70 per cent of the generic market, which last year was worth approximately $620 million. AltiMed, says Little, has about a 10-per-cent market share. “The initial goal of AltiMed was to protect the existing business,” he says. “Neither Kenral nor SynCare could survive in this market on their own. What we hope to see is a free market for generics.” Little maintains that AltiMed will have a very tough slog taking market share from Sherman and Dan; their firms have built powerful sales forces and tight connections with the community of pharmacists.

But AltiMed’s backers are themselves the equivalent of the biggest automakers. Individually, their generic subsidiaries made marginal progress in the past. The product lines were relatively limited, and the sales expertise of the brand-name companies has always focused d not on retail sales, but on the \ high-dollar end of the busiï ness—schmoozing prescription-writing physicians. As provinces adopted rules of “interchangability,” requiring pharmacists to substitute cheaper generic versions except in instances where a physician specifies otherwise, the generic manufacturers captured an increasing share of prescriptions. According to IMS Canada of Pointe Claire, Que., 38 per cent of prescriptions dispensed in Canada last year were for generic medications. The Canadian Drug Manufacturers Association, a lobby group for the generic manufacturers, says the knockoff drugs sell for, on average, 43-per-cent less than the brand names. That is supported by IMS data, which shows that while the generics fill more than a third of prescriptions, they claim just 13 per cent of a $6-billion industry.

The brand-name players want that back. The “coup de grace,” says Sherman, is the Eli Lilly case. From the outset, Canadian generics have been allowed to copycat the look of brand-name products. The Prozac case could put an end to that. “The issue we believe is at stake,” says Eli’s Sims, “is that consumers, some of whom are very sensitive to even small changes in their medica-

tion, should not be misled by copycat drugs that look alike but are not identical.” Sims is not referring to the drug’s “active ingredient,” which is the same in both generic and brand-name products, but the inactive fillers. For example, some patients are lactoseintolerant, says Sims, “and one of our competitors has put lactose in their [fluoxetine] capsule. The issue is that patients and consumers deserve the right to know.”

That, says Sherman, is “another element of nonsense,” another “gimmick.” All possible inactive ingredients are taken from a Health Protection Branch approval list, are present in trace amounts, and are documented for the benefit of issuing pharmacists. Some associations, including the Canadian Society of Hospital Pharmacists, are concerned that not standardizing size, shape and color, will lead to patient—and dispensary—confusion, which is not, says the CSHP, “in the best interest of public health and safety.” Says Sherman: “If you go to someone’s house and ask for an Aspirin, and they give you a green tablet, you’re going to say that’s not Aspirin. It’s got to be white, round.”

Apotex is not the only Canadian generic awaiting the federal decision on whether Prozac by any name will always be identified by the green-and-buff look. Leslie Dan has his stock ready to ship, as does Nu-Pharm Inc., yet another generic player. Last week, Dan and Sherman, who are more used to suing one another on other pharmaceutical issues, agreed to order up all-green caps for one dosage of fluoxetine and all-buff for another. By week’s end they were filling the things, and preparing to ship them to pharmacies across the country. In the meantime, consumers need not despair. Look-alike generic Prozac has, in fact, been available in Canada since Dec. 1 at 20-per-cent below the brand-name price of about $165 marketed by Pharmascience Inc. of Montreal. And just how did Pharmascience get away with it? It has been licensed to sell the stuff by none other than Eli Lilly, which manufacturers both generic and brand versions. The difference? One pill is stamped Pharmascience. All of which feeds Barry Sherman’s pre-emptive conspiracy theories.

Curiously, the bulk of Pharmascience’s business is the same as Apotex and Novopharm—the creation and manufacture of in-house copycat generic formulations. A victory for Eli Lilly would be good news for Pharmascience fluoxetine sales. A loss for Lilly would be good news for Pharmascience’s broader business. “On the one hand, I want Lilly to win,” says Jonathan Goodman, business development manager for the company his father founded in 1983. “On the other hand, I want them to lose. I’m taking Prozac now just so I can figure it out.”

JENNIFER WELLS

Davids and Goliaths

Brand Name Generic Name Antidepressant Prozac Fluoxetine

$165.08 $125.84

Eli Lilly Pharmascience

100 capsules Manufacturer

Blood-pressure pill Lasix Furosemide

$10.93

Hoechst-

Roussel

$0.75

Various

100 tablets Manufacturer

Anticholesterol drug Lopid Gemfibrozil

100 capsules Manufacturer

$37.96

Various

Brand versus generic share

Based on total number of prescriptions dispensed at Canadian retail pharmacies