Teva’s strikes will get more difficult to fend off

Pillman

It’s back to basics for generics giant Teva. A company that has prided itself on breaking patents of big multinational companies for many years is facing the same prospect — an impending challenge to the patents of its big multi-billion-dollar brand Copaxone, used to treat multiple sclerosis.

But that’s not the real story. Teva is taking its penchant for suing companies, mostly Indian, to a more basic level - challenging patents for active pharmaceutical ingredients (APIs), used to make finished drugs. And Indian companies are fighting back.

Zydus Cadila has sued Teva in a US court, contesting claims on the bulk drug used for the manufacture of risperidone, a treatment for schizophrenia.

Teva had sought to review processes used by Cadila for making its risperidone. Teva had objections on two risperidone patents for bulk drugs and had asked Cadila for evaluations failing which Teva said it will pursue remedial measures including seeking a temporary restraining order. Teva had secured a six-month exclusive access to the US market for the drug that was patented by Johnson & Johnson.

Zydus Cadila decided it needed to respond decisively. But in the petition that Cadila filed, the company went beyond just protecting and defending its patent rights. Cadila alleged that Teva was working on an overall strategy to obtain monopolistic power in the API and API formulation market, more particularly risperidone.

The petition says Teva API - a division of Teva - markets itself as the undisputed API generic leader. According to Cadila’s claim in the filed papers, Teva’s API figures indicate that its API sales to third parties more than tripled between 2000 and 2006. The number of patents issued to Teva API increased more than eight-fold.

Call it an incessant nimbleness of Teva that pushes it to dominate the generic market in the US by a huge margin, mostly carved through tedious court battles with multinational pharma companies.

But will the strategy work for APIs?
Most experts at Indian companies believe it will be tough for Teva to assert its monopoly over APIs. Indian companies have mastered the trick as much as Teva has in synthesising bulk drugs through several non-infringing routes and so it will be difficult for Teva to stonewall Indian companies from accessing the US markets. It’s a great strategy though, they agree in perfect sync.

Reflecting the same collective sentiment of Indian companies, Zydus Cadila alleges in the filing in the US court that, “The ultimate objective of Teva with regard to obtaining intellectual property on molecules not invented by Teva is to control and restrict competition in the generic pharmaceutical market. On information and belief, Teva has undertaken measures to gain issuance of patents covering the API of commercially successful brand-name drugs, methods of manufacture of the API, and formulations of the API, at all costs.”

According to a pharmaceutical patent expert, Teva may be aiming at API patents of several such complicated drugs. Drug patents in the US are not so difficult if documented and proven scientifically and accurately.

If Teva does secure a few of them out of the several dozens, it can extend its dominance in a few big product categories, not just for formulations but also raw materials. Teva can then have a strong play in the 180-day exclusivity periods obtained by overthrowing patents and also beyond that by restricting API supplies from generic players.

Interestingly, this is not the first instance that Teva is locking horns with Indian companies. In 2007, the company sued several Indian companies over carvedilol APIs. On clarifications furnished by Indian companies about their manufacturing processes for carvedilol, Teva softened its approach.

That may not be the case always. Future drugs will be more and more complex to handle. Right bioavailability, the impurity levels, analysing methods for those reactions are all subject to patent grants. Teva can go the next mile and gain patents over every stage of the drug manufacturing cycle. Indian companies will be put on the defensive yet again by Teva: A big reason for me to admire Teva’s strategy of keeping rivals on their toes.

Pillman is an executive closely linked to the  global pharma industry.