Supreme Court Studies Generic Drug Question: How Will Patients Fare?

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Perhaps not as attention-grabbing as the health care industry’s struggle to adapt to the changes brought by the Affordable Care Act, its efforts to deal with what is known as the patent cliff is nevertheless a hugely important narrative for pharmaceutical companies. While Teva Pharmaceuticals (NYSE:TEVA) has grabbed numerous headlines in recent years with its efforts to undercut brand-name drugmakers with generic versions of their own high-priced medicines, the Israel-based company is now worried about the financial viability of its own blockbuster multiple sclerosis treatment, Copaxone.

Teva Pharmaceutical Industries — the world’s largest manufacturer of generic drugs — has criticized other brand-name drugmakers from trying to block its generic versions. It has gone so far as to take those companies to court. Take for example Teva’s battle with Pfizer (NYSE:PFE).

Patent expirations continue to be a problem for the United States’ largest pharmaceutical manufacturers. Since Pfizer’s patent for its blockbuster cholesterol medicine Lipitor — which for nearly a decade was the world’s top-selling drug — expired in 2011, earnings and revenue have struggled to grow. Like many large drug manufacturers, cheaper generic versions of its once-top-selling pharmaceuticals are eroding sales for drugs no longer protected by patents, that once earned Pfizer billions annually. It is for that reason that the company has pursued a so-called method of use patent for its arthritis-pill Celebrex. The drug belongs to a class of drugs called COX-2 that helps lower pain for arthritis patients by blocking a chemical reaction in the body that causes inflammation. A method of use patent covers the use of a product to treat certain health problems or diseases, and Pfizer argued in the United States District Court for the Eastern District of Virginia recently that the company should be able to retain marketing exclusivity and an additional eighteen months of a market monopoly because the reissued patent covers methods of treating osteoarthritis and other approved conditions with celecoxib, the active ingredient in Celebrex.

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