Keeping U Posted: July 2009

Prilosec's Maker Switches Users To Nexium, Thwarting Generics

By GARDINER HARRIS

The heartburn drug Prilosec is one of the best-selling prescription
medicines in history. Sales in the past five years alone amount to $26
billion. The reason is not only its popularity but its steep price:
about $4 per pill.

AstraZeneca PLC, Prilosec's maker, has been able to charge this much
because it owned the drug's patent. But the patent's expiration date was
April 2001. By now, cheap knockoffs should be flooding the market and
saving millions for retirees, insurers, government health plans and
corporations, such as General Motors Corp., which spends $55 million a
year just to buy Prilosec for its employees and retirees.

Yet, no generics have been launched. The reason? Seven years of planning
by a group of marketers, lawyers and scientists within the drug's maker.
The group called itself the Shark Fin project after the dismal shape the
sales chart would trace if they did nothing: an inverted-V.

Beginning its work in 1995, the team came up with a list of nearly 50
possible solutions to the patent-expiration disaster facing the company.
Among the best would be finding a new heartburn drug that worked
significantly better. Among the worst: launching a successor drug that
was virtually no better but had several more years of patent
exclusivity. The group also constructed an elaborate legal defense of
Prilosec's patents.

Fifteen months after the patent expiration, the market shows how deftly
the planners handled their crisis. Prilosec still has its exclusivity,
having kept the generics at bay with a series of lawsuits and peripheral
patent claims. Meanwhile, AstraZeneca has begun establishing a successor
heartburn drug in the market. And, knowing it can't fend off Prilosec
generics forever, it is spending half a billion dollars a year to
convert Prilosec users to the new branded product, called Nexium, which
like Prilosec carries a steep price of some $4 a pill.

All this despite a dim assessment from several executives who were part
of the long Shark Fin planning process. They say Nexium was among the
poorest of the many drug solutions they pondered back in 1995 -- a new
medicine that isn't any better for ordinary heartburn than the one it
will succeed.

The Prilosec pattern, repeated across the pharmaceutical industry, goes
a long way to explain why the nation's prescription-drug bill is rising
an estimated 17% a year even as general inflation is quiescent. Just a
few dozen high-priced branded drugs are driving this increase. As the
drugs near the end of their market exclusivity, the maker typically
brings out a new branded drug for the same condition, then launches a
huge promotional campaign to convert users to the new one. And as in the
Prilosec case, the new drug often is little better, or even little
different, owing to growing difficulties drug-company labs face in
finding novel drugs.

At the same time, companies typically fight to block generic versions by
filing patents on related matters such as how a drug is delivered and
used, and then suing makers of generics. It's a tactic that is meeting
increasing resistance, though. This week, 29 state attorneys general
sued Bristol-Myers Squibb Co., accusing it of using frivolous patents to
delay generic competition to the cancer drug Taxol. They say more such
suits are in the offing.

Few patients who walk into the Mud Creek Clinic in Floyd County, Ky.,
can afford to pay for Prilosec. "So they stretch out a month's
prescription for five or six months," says Jackie Bartley, a nurse at
the clinic. "They'll go a week and not take it, and their stomachs will
get so bad that they'll take it for three or four days until things get
OK and then wait again until their stomachs get bad again. A generic
would be a gift from God."

Prilosec was originally sold in the U.S. by Astra-Merck, a partnership
of Merck & Co. and Astra AB of Sweden. Astra eventually bought out
Merck's share and merged with another company to form AstraZeneca. Merck
still collects 32% of Prilosec's U.S. sales and 27% of the successor
drug's.

Lofty Goals

The Astra-Merck team that set out in 1995 to plan the Prilosec
succession started with lofty goals. "It wasn't just about the money --
we wanted to do good things," says one of the members. Four agreed to
speak about the planning for the Prilosec successor drug, which is
called Nexium, if their names weren't used. This account describes only
matters that all four, speaking independently, cited.

The planners subjected each drug option to four tests: Would it be
better than Prilosec, patent-protected, technically feasible, and a drug
that could be launched before generics hit the market? The first test
was toughest, because Prilosec heals stomach sores from chronic
heartburn in about 84% of patients who take it for two months, by
curbing acid production in stomach cells. "We thought the likelihood of
us finding [a better drug] was quite small," says Martin Nicklasson,
chief of AstraZeneca's gastrointestinal business. He wasn't part of the
planning team.

Launching a follow-on product is easier when the initial drug leaves
many patients unsatisfied. Astra-Merck planners, expecting to find few
unhappy Prilosec users, were astonished when surveys showed only half of
those who used the drug were entirely pain-free and satisfied. This
unhappiness was good news: The planners knew they'd be able to persuade
some users to try a new pill.

By early 1996, they had narrowed their options to 18. Among the ideas
was to search hard for a drug that inhibited the same acid-producing
cells as Prilosec but worked faster and better -- a so-called reversible
proton-pump inhibitor. Other ideas included liquid and extended-release
versions of Prilosec -- which could be newly patented -- or combinations
of Prilosec with various other heartburn remedies. But options kept
failing. For instance, a combination of Prilosec and Pepcid, an older
ulcer drug, didn't work. By early 1998, what would eventually become
Nexium was just about the last option.

Nexium is one-half of the Prilosec molecule -- an isomer of it. Tweaking
a tried-and-true medicine by cutting the molecule in half is a common
strategy. Sometimes the drug that results has fewer side effects or is
more effective. Often it works just the same. But even if that's the
case, it will be chemically different enough to win its own patent.

Astra found that this half-of-Prilosec molecule seemed to get into the
bloodstream more efficiently than the whole Prilosec. While executives
doubted it would work any better against heartburn, they thought it
might be better against something called erosive esophagitis, where
burped-up stomach acid injures the esophagus. They commissioned four
studies comparing the proposed new pill with Prilosec in patients with
this condition.

It was a huge gamble. If the product turned out to be worse than
Prilosec for the condition, the label would probably have to say so.
"You spend $120 million studying the thing and it could have come out
worse. You're scared as hell," one member of the planning team says.

The four studies all compared 20 mg. of Prilosec against 40 mg. of what
was to become Nexium. The company says the dosage difference was
justified because it planned to seek approval for a 40 mg. dose of
Nexium against erosive esophagitis, a condition for which Prilosec's
dose is 20 mg. Two of the studies found that even this big dose didn't
provide faster healing with Nexium than with Prilosec. But the other two
studies did show better healing with 40 mg. of Nexium.

Only one study compared the drugs at equal 20 mg. doses. It found no
difference in healing rates after four weeks, but after eight weeks,
Nexium eked out a victory -- a 90% healing rate versus 87%. AstraZeneca
published the two positive studies but won't release detailed
descriptions of the two negative ones.

The gamble had paid off. The company now had at least one study it could
show doctors concluding that Nexium was in some cases better, if only
slightly, than Prilosec when the heartburn was so bad it eroded the
esophagus. AstraZeneca got regulatory approval for Nexium in late
February 2001 and started selling it in March.

Prilosec's patent was due to expire in April. Getting many Prilosec
users to switch to Nexium would be impossible if low-cost generic copies
of Prilosec hit the market that month. But AstraZeneca won six extra
months of exclusive Prilosec sales, thanks to a federal law that gives
such extensions if companies test their drugs in children.

That took the company to October. GM and everybody else had to keep
paying for Prilosec, not a low-cost generic form of it.

Even the extension to October might not have given AstraZeneca enough
time to establish Nexium and start winning Prilosec users over to it.
But the maker's legal team had been preparing for this moment for more
than 15 years.

Drug companies patent everything they can think of about their
medicines, setting up "patent estates" that serve as legal minefields
for competitors. Astra had started applying for these incidental patents
in 1985, four years before it launched the drug in the U.S. Even if such
patents ultimately fail legal challenges, they often delay generic
launches.

Moreover, these legal fights ensure that there's just one generic
competitor at first. That's because a 1984 federal law said generic-drug
makers that got into litigation with brand-name drug makers could have
six months of generic exclusivity once they finally got to the market.
That exclusivity is welcome to a maker of a branded drug, because it
means sales don't erode as fast. The idea is, "if you're going to lose,
you lose to one generic," says a former Astra-Merck executive. "Because
if four or five come in, it gets really ugly."

Patenting Everything

Astra's attorneys were constantly alert to chances to file patents on
Prilosec. For instance, when outside scientists figured out that ulcers
are often the result of bacterial infection, Astra obtained patents on
the idea of combining Prilosec with antibiotics. The company then argued
that generic competitors couldn't launch copycat versions of Prilosec
because doctors might prescribe them with antibiotics, in violation of
its patent on the combination.

Astra also patented a substance that briefly forms in the human body
when Prilosec is swallowed. Then it claimed that patients who took
generic versions of Prilosec would violate this patent, so that generics
themselves were illegal.

The company also patented the way it manufactured the drug and claimed
generic competitors were illegally using identical techniques. And it
patented the idea of putting two coatings on the drug's active
ingredient.

Prilosec's active ingredient can survive only about eight minutes in
stomach acid -- not enough time for it to get through to the intestine
for absorption. So it needs a so-called enteric coating that resists
stomach acid. Unfortunately, most such coatings are also slightly
acidic. So Astra's scientists decided to add a thin middle coat to keep
the enteric coating from damaging the drug. This problem is so common
that standard industry textbooks describe it and chemical companies sell
middle coatings to solve it.

Yet Astra's lawyers persuaded patent clerks in Europe and the U.S. that
its scientists had made a novel discovery when they came up with this
triple-layering. It was like patenting the discovery that hamburgers are
best served with the tomato slice sandwiched between the lettuce and the
meat so the bread doesn't get soggy.

A British judge later invalidated this patent because of "obviousness."
But in the U.S., the trial on the patent's validity has been grinding on
since December in New York. Every day the trial continues, AstraZeneca
collects another $10 million in Prilosec sales, on average. Equally
important, it gains more precious time to switch Prilosec users over to
Nexium.

AstraZeneca attorneys and executives say the patents involved in these
cases are important discoveries that must be defended. "We've been
attacked," says Dr. Nicklasson. "We're simply protecting ourselves in
saying that we have patents that are valid."

Deep Purple

Prilosec is one of the most recognizable drugs, thanks to a distinctive
purple color and hundreds of millions of dollars spent on consumer ads
-- some telling people to "ask your doctor about Prilosec, the purple
pill." In planning its successor, Nexium, the Shark Fin team considered
lots of colors, but "we decided on a purple pill to leverage the brand
-- and racing stripes to distinguish it," says a team member. Ads say
that "today's purple pill is Nexium. From the makers of Prilosec." They
also talk about "damaging erosions of the esophagus," the one area where
Nexium may have a slight advantage.

The company is pouring huge money into this. It spent $478 million
promoting Nexium in the U.S. last year, according to research firm IMS
Health. Nexium is currently the most heavily advertised drug in the U.S.

Grover Cleveland Young, a retired paper-mill worker in Red Fox, Ky.,
says he took Prilosec until two weeks ago when his doctor switched him
to Nexium. Neither his Medicaid nor Medicare benefit pays for either
drug. "I decided if I had to pay for it myself, I might as well buy the
best," says Mr. Young, who was released last week from Hazard ARH
Regional Medical Center for treatment of bleeding ulcers. "My doctor
said Nexium was the only thing that would help my ulcers."

Mr. Young, 74, gets $2,100 in monthly Social Security and pension
benefits, which has to stretch for both him and his wife. He doesn't own
a car. Money spent on Nexium is money that won't go to pay credit-card
bills. "We let one bill go to buy the medicine one month and then let
another go to buy it the next," he says. "I don't know what we'll give
up.... It's hard, but if I don't take my medicine, my stomach about
kills me."

AstraZeneca is flooding doctors' offices with sales representatives and
free samples. Peter Halper, an internist at a large group practice in
Manhattan, has a computer given him by a drug-marketing firm on
condition he chat with drug-company marketers via the Internet from time
to time. Recently, he checked in with AstraZeneca. The face of a
salesman popped onto his screen, asking him how he was and then
launching into a pitch for Nexium.

Dr. Halper asked the salesman why Nexium was better.

"The proof's in the healing rates," said the live salesman, who cited
data comparing 40 mg. of Nexium to 20 mg. of Prilosec. "We're safer,
with no drug-to-drug interactions. We're also the No. 1 proton-pump
inhibitor among gastrointestinal specialists." While he spoke, several
graphs flashed on the screen.

"So have I shown you how we differ from the other drugs?" the salesman
asked. Dr. Halper said he had. "Do you need any more samples delivered?"
No, Dr. Halper said, he had plenty.

Minutes later, two salesmen from AstraZeneca arrived to talk to Dr.
Halper about Nexium. They made sure to restock his cabinet with free
Nexium. Since many physicians view Prilosec and Nexium as virtually
identical, they often prescribe whichever one is in their free-sample
closet. Patients who begin with free samples often continue with paid
prescriptions, so the freebies are effective marketing tools.

Rising Share

AstraZeneca's 6,000 salespeople, who have nine products they sell to
U.S. primary-care physicians, talk about Nexium during a third of their
sales calls, according to ImpactRx, a research firm in Mt. Laurel, N.J.
Its numbers show doctors get more pitches for Nexium than for any other
heartburn drug. Trying to switch doctors to the new drug with years of
patent protection ahead, the salespeople now bring up Prilosec only to
compare it unfavorably to Nexium.

Prilosec's share of new heartburn prescriptions dropped to 25% in April
from 49% in 2000, says IMS Health, while Nexium -- on the market only a
little over a year -- was already up to 19%. Most of Nexium's growth is
coming at the expense of Prilosec, as the Shark Fin team had expected.
When patients are switched away from Prilosec, 60% of the time it's to
Nexium, ImpactRx data show.

The retail price of Prilosec at the Soho Pharmacy in New York is $4.47 a
pill, while Nexium's is $4.30. A generic Prilosec is expected initially
to cost about 15% less than the brand and eventually, as more
competitors jump in, to drop by two-thirds or more.

Another way AstraZeneca is getting Nexium established is by cutting
deals with managed-care companies to sell the new drug for less than
Prilosec, at least for now. Although the strategy does nothing for
people like Mr. Young in Kentucky, Nexium is now Empire Blue Cross and
Blue Shield's preferred heartburn drug because of its price. AstraZeneca
won't disclose how much it charges managed-care firms for Nexium.

Kaiser Permanente, the largest managed-care group, is nonetheless
discouraging its physicians from prescribing Nexium. The reason, says
David Campen, a Kaiser physician and pharmacy executive: "Nexium clearly
is no value-added drug."

Gautam Naik contributed to this article.

"It will break him."

By Christopher Hass - Jul 21st, 2009 at 1:59 pm EDT

From OFA Director Mitch Stewart:

Last week, Republican Senator Jim DeMint made it pretty clear why the opponents of health care reform are fighting so hard. As he told a special interest attack group, "If we're able to stop Obama on this, it will be his Waterloo. It will break him." Here's how the President responded:

Think about that. This isn't about me. This isn't about politics. This is about a health care system that is breaking America's families, breaking America's businesses and breaking America's economy. And we can't afford the politics of delay and defeat when it comes to health care. Not this time, not now. There are too many lives and livelihoods at stake.

With Congress only days away from finalizing their plans for reform, it's time to stand up with the President and fight back against this disastrous brand of old-style politics. So we need as many people as possible to publicly support the President's principles for health care reform and call on Congress to act.

Before the first full votes in Congress, we'll publish the signatures in newspaper ads across the nation, to make sure your voice is heard.

Watch President Obama's full response, then add your name in support of reform. Or if you've already signed, please forward this message to every one of your friends and neighbors so they can join you.

The President is more dedicated than ever to passing health care reform that satisfies the three requirements he's been talking about for months: Health care reform must reduce costs, guarantee choice -- including the choice of a strong public insurance option -- and ensure all Americans have quality, affordable health care.

If we do not reform our broken health care system this year, we will only shackle future generations with spiraling costs and deteriorating care. The cost of inaction is simply more than this country can afford.

But the special interests who profit from the status quo won't go down without a fight. The ads, the smears, and the attacks -- targeting both President Obama and members of Congress who support reform -- will only get worse. So it's crucial that we show huge backing before Congress finalizes their plans this month.

Stand with President Obama on health care reform.

Thanks for standing up for change.

Thanks,

Mitch

Mitch Stewart
Director
Organizing for America