Subject: Patent Quagmire: Who Invented AZT? Big Bucks Are Riding On What Sleuths Find Date: Published: 10/21/93 (211 lines) Source: Wall Street Journal. Copyright Dow Jones & Co. Inc. Patent Quagmire: Who Invented AZT? Big Bucks Are Riding On What Sleuths Find --- Development of AIDS Drug Involved Many Scientists, And That Sparks a Battle --- A Familiar Trap for New Ideas ---- By Edward Felsenthal Staff Reporter of The Wall Street Journal Who invented AZT? Was it Jerome Horwitz at the foundation with the heated flask? Or Martha St. Clair in the workshop with the mouse cells? What about Samuel Broder in the laboratory with the test tube? Like most compelling mysteries, the story of the invention of the powerful AIDS drug is one of lives imperiled, of accusations, of clashing egos and, some say, of greed. It also is a story of continuing suspense; the case hasn't been cracked. The search for inventors is important because, legally, the first person to come up with an idea gets exclusive rights to sell it. Patent experts say that is fine in theory. Inventors take risks by pursuing ideas that others see as pipe dreams. If the idea pays off, the dreamer should reap the rewards. But, as the AZT case shows, determining who originally conceived of a drug can be a legal nightmare. Nearly 10 years after scientists at Burroughs Wellcome Co. and the National Institutes of Health jointly began working on AZT, they are still fighting about who deserves the credit. The case is only one among dozens of court battles over rights to various drugs, from the hair-growth formula minoxidil to the arthritis medication flurbiprofen. And the costly fights are prompting some lawmakers to advocate leaving such mysteries of inventorship unsolved. Whoever shows up at the U.S.Patent Office first should own the rights, they say, regardless of who made the crucial discoveries. Such a change might reduce the financial incentive for inventors, but it would help keep them out of court. The current system seems to have fallen behind the times. Sleuthing for the one true inventor once was relatively easy, when scientists worked alone in back rooms and garages. But modern drug development has become too complex and expensive for that. It requires the pooled expertise and cooperation of so many scientists that it's often difficult to decide who really made a new treatment possible. That leaves the detectives in charge -- the U.S.Patent Office and the courts -- with the nearly impossible task of sorting through competing claims. "The patent system has osteoporosis," declares Roger Schechter, a law professor at George Washington University in Washington, D. C. The hunt for AZT's inventor starkly illustrates how serpentine the patent system's detective work has become. It also shows how nasty cooperative research can get. The interminable squabbling is taking scientists out of the lab and into the courtroom and draining millions of dollars from research work. For now, Burroughs Wellcome, the U.S. arm of Britain's Wellcome PLC, alone manufactures the drug, which remains the most widely used AIDS therapy and one of the most expensive drugs on the market. If a court ultimately rules that someone outside Burroughs Wellcome was an inventor, the company would lose its monopoly, allowing generic AZT to be marketed at a far lower price. But a long list of researchers and court dates stands in the way. Although AZT didn't hit the market until 1987, the list of possible inventors goes back to 1964. In that year, a chemist at the Michigan Cancer Foundation in Detroit cooked up a new compound called azidothymidine, or AZT. No one involved in the case denies that the chemist, Dr. Horwitz, created the drug. Yet that consensus doesn't even begin to settle the dispute. Dr. Horwitz's problem is that he didn't know what he had wrought. Legally, an inventor has to prove not only that he originated an idea but also that it might do something useful. Dr. Horwitz had hoped his new drug would work as a cancer treatment, but it didn't. And in 1964, no one had heard of AIDS. So the compound sat on the shelf for years. Finally, in 1983, Burroughs Wellcome began looking for AIDS treatments. It assigned Janet Rideout, an organic chemist, to identify promising compounds. After going through thousands, she cut the list to 14. It was the research equivalent of picking the winning lottery number: One of those drugs was AZT. Dr. Rideout's work gave a Burroughs Wellcome virologist, Dr. St. Clair, something to work with, and Dr. St. Clair quickly made a breakthrough. In a sophisticated test she had designed to screen potential therapies, AZT destroyed a mouse virus similar to the human immunodeficiency virus that causes AIDS. In its patent application, Burroughs Wellcome named both Dr. Rideout and Dr. St. Clair as inventors, plus three other scientists: David Barry, its vice president of research, who put together the AIDS-research team; Phillip Furman, a virologist who worked with Dr. St. Clair in designing the mouse screen; and Sandra Lehrman, an infectious-disease expert involved in almost every part of the project. But critics say these scientists' work alone doesn't qualify the company for the AZT patent because they didn't prove that the drug helped fight AIDS in humans. Bruce Downey, president of generic-drug manufacturer Barr Laboratories Inc., disparages the notion that Dr. Rideout is an AZT inventor simply "because she pulled it off the shelf." And armed only with Dr. St. Clair's results in mice, Burroughs Wellcome's claim was no stronger than "the idea you could use lemonade as a treatment for AIDS," he adds. In a deal with the NIH, Barr Labs is arguing the case on the government's behalf in exchange for the right to market AZT if it wins. In 1991, Burroughs Wellcome sued to enforce its patent rights after Barr asked the Food and Drug Administration for permission to manufacture and sell a generic version of AZT. A year later, Burroughs Wellcome brought Novopharm Ltd., a Canadian generic-drug maker, into the lawsuit after it, too, filed an application with the FDA to sell the drug. Barr's picks for who "invented" AZT? Dr. Broder and Hiroaki Mitsuya of the NIH, the government's health-research arm. Dr. Broder, the director of the NIH's National Cancer Institute, spearheaded NIH research on AIDS and, with Dr. Mitsuya, developed a test-tube experiment to assess the effect of different drugs on HIV-infected human cells. In 1984, the NIH asked various companies, including Burroughs Wellcome, to send potential treatments for testing. Dr. Mitsuya, who ran the experiment, knew that he might be risking his life by working with live HIV at a time when the possible dangers to researchers were unknown. He discussed those dangers with his wife, and they decided that the quest for an AIDS drug was worth the risk. The gamble paid off. After shipping a number of potential treatments that failed the NIH test, Burroughs Wellcome sent AZT in early 1986. Dr. Mitsuya put it in a test tube containing HIV in a solution and watched for six days. On Feb. 20, Dr. Broder called Burroughs Wellcome to tell it that the drug had blocked the virus from getting into the human cells in the test tube. As a company public-relations document on AZT puts it, "We knew we really had something then." Burroughs Wellcome and the NIH agreed to work together to move the drug through an FDA-required clinical trial on AIDS patients. That was about the last time the two sides agreed on anything. Relations soured when Burroughs Wellcome put a high price on AZT and then publicly discounted the NIH role. "In order to get that high price, they had to snub Broder and his lab of all credit," says Peter Arno, a health economist at Montefiore Medical Center in New York. It was "old-fashioned greed." Burroughs Wellcome defends AZT's price tag, which originally ran $10,000 a year at retail. After a public outcry about that price and a drop in the dosage recommended by most doctors, the cost has declined to about $2,500 a year. The company says the price reflects the high cost of development, manufacturing and continuing research on the drug. It adds that it had every right to exclude Drs. Broder and Mitsuya from the list of inventors on its patent application. The idea was fully conceived after Dr. St. Clair finished her tests, the company contends. In the lawsuit over the question of who invented AZT, the legal system so far is siding with Burroughs Wellcome. Last July, federal Judge Malcolm Howard in New Bern, N. C., ruled that the NIH acted "merely as a technician and not a conceiver" in AZT's development. "The law doesn't require that the inventor's idea be reasonable, scientifically accurate or capable of being proved," Judge Howard wrote. But the case could be far from over. The issue is being taken up by the Court of Appeals for the Federal Circuit, the country's most important patent court, which is expected to hear the arguments early next year. If the court reverses Judge Howard -- which some patent lawyers term possible -- the case would probably go back to the New Bern court. The issue could end up in the U.S.Supreme Court. Like every mystery story, the AZT case has its victims. Even if Barr wins, the lawsuit will have delayed the marketing of generic AZT by several years -- longer than many AIDS victims can wait. Meanwhile, the cost of AZT has been a hardship for many patients. And Medicaid, the government medical program for the poor, is among the biggest buyers of AZT; so, the steep price it pays is a bit ironic because the government poured significant resources into AZT's development. The New Bern trial has also squandered research money. Burroughs Wellcome says it has spent several million dollars; Barr's tab is near $4 million. Scientists have been yanked from the lab for days at a time, including more than a week of pretrial testimony from Dr. Broder alone. During the trial, the three companies' legal staffs and documents took up several floors of office space in New Bern. Afterward, Barr rented a truck just to haul papers back to its Pomona, N. Y., headquarters. Although such feuds have especially plagued new drugs, the problem isn't confined to that industry. Similar disputes can arise during creation of any scientifically complex product and have led some lawmakers to question whether sleuthing for inventors is worth the cost. But reforming patent laws is a tricky business because the promise of 17 years of exclusive sales rights is often what lures inventors into risky ventures in the first place. The most radical proposal -- and the subject of recent hearings at the Patent Office -- would mete out ownership rights like hot concert tickets: first come, first served. The drawback of favoring the earliest applicant is that such a system might harm small inventors deft at innovation but slow at paperwork. Critics contend that companies with only a vague claim could rush multiple applications to the Patent Office to try to seize the bonanza. However, a first-to-file system probably would help avoid AZT-style brawls. Moreover, as Sen. Dennis DeConcini puts it, "The whole world is doing it a different way." The Arizonan and Rep. William Hughes of New Jersey have sponsored legislation that would adopt the first-to-file method, which most countries already use. If the two Democrats succeed, the 200-year-old series of invention mysteries would be ended. The upshot, according to Prof. Schechter, "We may lose the sense of fairness and characteristic American righteousness." But he adds, "The way we do it now is murky and ambiguous, and when the day is done, we don't even know if we've found the right person." [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.]