Outcome of fight with giant Schering-Plough to determine tiny Cranberry drug maker’s fate

Thursday, April 11, 2002

By Pamela Gaynor, Post-Gazette Staff Writer

Correction/Clarification: (Published April 18, 2002) In our April 11 story about Three Rivers Pharmaceuticals, we said Hepatitis C is contracted through contact with unsterile needles. In reality, blood is the medium through which the disease is transmitted, and needles are only one source of contaminated blood.

Anyone in Pittsburgh who thinks about generic drug makers probably thinks automatically of Mylan Laboratories, not tiny Three Rivers Pharmaceuticals.

Mylan, of course, is a granddaddy in the industry, accustomed to doing combat with brand-name drug makers that don’t easily give up long-held rights to pharmaceutical compounds — even when their patents reach expiration.

Three Rivers, on the other hand, is a mere wannabe, just trying to break into the business. At this point, it has no sales, not even a pill that it’s permitted to sell.

All it really has is an application with the Food and Drug Administration to produce ribavirin, a generic form of Rebetol, which is used in combination with interferon to treat Hepatitis C, a liver disease that could reach epidemic scale because it is transmitted by blood through intravenous drug use and other uses of unsterilized needles.

Still, Three Rivers already is embroiled in the kind of lawsuit that has become almost a core business activity among generic drug makers.

The tiny Cranberry-based company filed for FDA approval in August. In October, drug giant Schering-Plough filed suit to block Three Rivers’ application. Schering holds exclusive marketing rights for ribavirin from ICN Pharmaceutical.

Like all such suits, those involving ribavirin (there are two others) are complex, involving not just the drug itself but also the manufacturing processes and potentially other issues including how the drug is used.

The stakes in the battle are high. For Schering — a third of whose revenue already is jeopardized as it faces patent expiration for the blockbuster allergy drug, Claritin — the possible loss of Rebetol sales could erode potentially vast opportunities in a fast-growing market.

For Three Rivers, the issue is survival.

Whether it prevails, how the company got to this point is a tale in itself.

Three Rivers roots are in a North Side drugstore, Fisher’s Pharmacy and a sister company, Fisher’s SPS that the owners established to compound — or hand make — prescription drugs.

The pharmacy actually started making and selling ribavirin in 1999. According to Three Rivers, that was the year ICN’s patent expired, but three years before any generic competition could begin because of the post-expiration exclusivity the FDA allows brand-name drug developers to retain to compensate them for the time it took to obtain their initial marketing approvals.

Fisher’s, however, availed itself of an exception the FDA provides for pharmacies to “compound” drugs that are not commercially available.

Although Schering was selling its brand version for the treatment of Hepatitis C at the time, it was marketing it in a package with a form of interferon on which it holds a patent.

The Rebetol pills were in a bottle, boxed along with a form of interferon that could be injected.

Because of the packaging, physicians sometimes couldn’t prescribe doses they wanted to try on patients without causing them to waste portions of one of the drugs. Physicians who wanted to try their patients on the ribavirin but use another manufacturer’s interferon also couldn’t do so without waste.

The drug package, priced at about $1,400 for a month’s supply, was too precious to allow for the discarding of any part of it, said Donald Kerrish, a former Fisher’s pharmacist and now chief executive officer of Three Rivers, which he founded with Fisher’s owners. Of course, at that price, there also were patients who couldn’t afford the therapy at all.

It was because the ribavirin wasn’t available by itself that Fisher’s was able to compound it, said Paul Fagan, Three Rivers’ attorney and one of its investors.

Schering made no attempt to block the compounding, though a spokesman, Robert Consalvo, said Fisher’s was stretching rules under which FDA usually finds there to be a lack of commercial availability. The exception, he said, is typically one permitted to help patients obtain medication in a form that doesn’t exist — such as a liquid formulation for someone who can’t swallow a pill.

Schering, which declined to discuss its lawsuit against Three Rivers, said it packaged the two drugs in one box to protect patients against uses with other forms of interferon, which physicians are permitted to recommend but which might not have been subjected to enough study. It has since begun marketing the two separately because sufficient studies have since been done, Consalvo said.

Three Rivers’ attorney, however, said he suspected the packaging was designed to give Schering a lock on treatment of Hepatitis C, protecting its hold with a “bundled” product. Moreover, Fagan contended Schering didn’t sue Fisher’s because it didn’t want to chance an earlier challenge to its patent.

Whichever is the case, Fisher’s found plenty of takers for its compounded ribavirin. Kerrish wouldn’t disclose actual sales but acknowledged there was enough demand — considering Fisher’s version cost $1.25 per tablet vs. $10 for Schering’s — to make it worth the pharmacy’s while.

With no factories, Three Rivers expects to purchase its production from a large contract manufacturer, assuming it wins its legal battle and gets FDA approval. It also would attempt to develop additional generics, possibly investigating some of the compounds used in treating HIV infections, Kerrish said.

Kerrish also wouldn’t say how much Three Rivers would charge for ribavirin if it gets approval. But he said he believed that the company’s pricing would be such that it would significantly widen the market by making the drug affordable to more people.

The number of people in need of the drug is rising, particularly in prison populations where the incidence is deemed to be around 40 percent, said Fagan.

Fagan said he was optimistic about Three Rivers’ chances because it’s much like the companies that started the generic industry but have since become large pharmaceutical concerns themselves, sometimes making brand name products along with generics.

“There’s no one like us. We’re small and nimble,” he said.

Read the Post Gazette Article here

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