Subject: Barr Labs Gets Help in Effort To Make AZT
Date: Published: 7/18/91 (103 lines)
Source: Wall Street Journal. Copyright Dow Jones & Co. Inc.

    Technology & Medicine:
    Barr Labs Gets
    Help in Effort
    To Make AZT
    ---
    Conditional License Shows
    Wider U. S. Role in Bid
    To Lower Price of Drug
    ----
    By Robin Goldwyn Blumenthal
    Staff Reporter of The Wall Street Journal

    The U. S. government said it granted Barr Laboratories Inc. 
 a conditional license to make a generic form of the AIDS drug
 AZT, a step Burroughs Wellcome Co., the drug's developer,
 called an "unwise intrusion" into the battle to market it.
    The announcement makes the National Institutes of Health a
 more direct party in the effort to widen the market for and
 lower the price of AZT, the only drug approved to treat
 acquired immune deficiency syndrome.  Burroughs Wellcome has
 said world-wide sales of AZT in 1990 totaled $286 million, of
 which about $175 million was generated in the U. S. 
    But whether Barr will ever be able to market a generic
 form of AZT remains to be seen.  The Pomona, N. Y., company is
 entangled in a patent-infringement suit brought by Burroughs
 and pending in federal court in Raleigh, N. C. The
 government's license agreement with Barr is contingent on the
 NIH winning patent rights to the compound in that litigation.
 And Barr still must get approval to market its version of the
 drug from the Food and Drug Administration.
    Patent disputes are common when it comes to developing and
 selling generic versions of brand-name drugs.  But it is rare
 for the government to step in and take sides in a patent
 dispute, observers say.
    The dispute centers on whether researchers at the NIH's
 National Cancer Institute should be named co-inventor of AZT,
 or zidovudine, with Burroughs Wellcome, the sole source of
 the drug.  Burroughs, the U. S. unit of Britain's Wellcome PLC,
 holds a "use" patent on AZT to treat AIDS, giving it a legal
 monopoly on supply of the drug.
    Although the government wasn't named as a litigant in the
 dispute, it gave Barr the right to litigate its rights in the
 AZT patents, and agreed to join in paying expenses and
 supplying information.
    A year's worth of AZT therapy costs $2,200 to $2,800, and
 Wellcome said in late May that the price of the drug, which
 has been criticized, is firm.  Barr, when it filed its
 application with the FDA in March for approval to market a
 generic form of the drug, said its form of AZT could sell for
 about 40% less than current prices.
    Barr, which countersued Burroughs, isn't challenging the
 patent on scientific grounds.  Rather, Barr claims that the
 NIH is a co-owner of the patent, and as such has the right to
 license it.  If Barr eventually succeeds, that could have a
 significant effect on its sales, which a spokesman estimated
 were $90 million in the year ended June 30.  In composite
 trading on the American Stock Exchange yesterday, Barr shares
 closed at $21.375, up 12.5 cents.
    The Barr spokesman said generic forms of high-priced drugs
 are generally believed to be able to capture 40% to 50% of
 the market.  If that is the case, Barr could nearly double its
 annual sales, based on last year's world-wide sales and the
 discounted prices for which it would sell a form of the drug.
    But even if Barr wins the patent suit, it couldn't sell a
 form of AZT until next March at the earliest.  That is when
 the orphan drug status, which gives exclusive rights for a
 limited period to companies that do the major research on new
 drugs, expires.  Burroughs Wellcome's patents on the drug
 don't expire until 2005, so even if Barr receives FDA
 approval to market a form of the drug but loses the patent
 suit, it would have to wait until then to sell it.
    Derek Hodel, executive director of People with AIDS Health
 Group, which filed suit against Burroughs Wellcome in U. S. 
 District Court in Washington earlier this year, hopes the
 various actions against the company will result in a less
 expensive form of the drug.
    "Part of the whole basis of the suit is that the
 government paid a tremendous amount to develop AZT and now
 it's paying a tremendous amount to buy it back," he said,
 noting that the government, through programs such as
 Medicaid, is the largest purchaser of AZT.  
    Burroughs Wellcome, based in Research Triangle Park, N. C.,
 called the recent actions of the NIH "unprecedented."  The
 company said the actions "raise a serious question about
 whether private companies, the source of most new drugs, can
 continue to collaborate with government scientists if they
 risk having proprietary rights and patents challenged years
 later."
    An NIH official disputed that notion.  "This is a very
 special case with very unusual facts," said Reid Adler,
 director of the NIH's office of technology transfer.  "We have
 a very healthy collaborative relationship with a number of
 companies.  We have about 150 collaborative research
 agreements under the technology-transfer act."

[This article is made available here by Dow Jones Co. for the
 personal and non-commercial use of callers to this bbs, in the
 hope that it will be of some help to those who are suffering
 from the disease and others who are seeking to help them.]