Sneezing for big profit

After a long journey to FDA approval, makers of allergy drug powerhouse Claritin face patent fight

April 15, 2001|By Stephen S. Hall

It had been yet another miserable, nose-dripping, red-eyed spring a couple of years ago, when I finally went to see an allergy specialist. I've been battered by seasonal allergies all my life. My father and I shared his hay-fever pills when I was growing up.

They were called Chlor-Trimeton, manufactured by Schering-Plough Corp., first as a prescription drug and then, after 1976, as an over-the-counter medication. It definitely worked, but it knocked me out. Even as the high tide in my nose and throat subsided, I felt mentally waterlogged.

For the most part, I managed to get by with over-the-counter medications until that spring in 1999, when I decided I needed something stronger. After rummaging through a cabinet in the examining room, my new allergist handed me a week's supply of Claritin, also made by Schering-Plough.

Claritin was, and still is, the most frequently dispensed drug sample in the United States, part of the nearly $8 billion worth of free drug samples that pharmaceutical companies distribute to doctors annually. I had seen the ads on television - who hadn't? I figured I'd give it a try.

Claritin had several other distinctions: It was by then the best-selling antihistamine in the United States, indeed the most profitable antihistamine of all time, with annual sales of more than $2 billion. And it was the most aggressively marketed drug to American consumers.

Claritin is a drug for our time: designed to relieve symptoms and improve "quality of life," hardly lifesaving or even curative, expensive as hell.

A month's supply of Claritin costs about $80 or $85 in the United States, even though it is an over-the-counter drug in dozens of other countries, where it usually costs $10 or $15. The high domestic price is paired with an enormous potential market: an estimated 35 million Americans suffer seasonal allergies.

So I went home and tried it. The little white pill was easy to swallow and had to be taken only once a day. There was just one problem: It didn't work. When I told my allergist, he didn't seem particularly surprised. Only about 30 percent to 40 percent of his patients, he said, found the drug helpful.

Claritin has been singled out as a prime example of greed by the American pharmaceutical industry, notably last summer by Al Gore during his presidential campaign, and there has been a constant stream of negative press about Schering-Plough's efforts to get the basic patent on Claritin extended beyond its 2002 expiration.

Schering-Plough has argued that the patent should be extended because the Food and Drug Administration's review of Claritin was unusually "protracted" (which, in fact, it was).

To press its case in Washington, the company has paid millions of dollars in political contributions and assembled a high-powered, strange-bedfellows team of lobbyists (including former senators Howard Baker and Dennis DeConcini, Gore confidant Peter Knight and Linda Daschle, wife of Senate Minority Leader Tom Daschle).

Claritin's 77-month odyssey through the FDA approval process was indeed lengthy, as a General Accounting Office report, issued in August, documents.

The biography of this one drug reveals a great deal about why prescription drugs cost so much to bring to market, and also why health care economists like Uwe E. Reinhardt of Princeton University argue that we are paying premium prices for new drugs without knowing if they are better than the drugs they've replaced.

It is above all a case study of how a drug company creates a blockbuster. There are no villains, no broken laws - just an enormous expenditure of money, a highly sophisticated understanding of food and drug laws, daring marketing, a great deal of luck. Making it all possible is a financial system that ultimately passes along the high price of a modest drug to third-party payers - and you.

In June 1980, when Schering filed a patent for the group of chemical compounds that included the drug that would eventually be known as Claritin, the world of drug development was quite different. It typically cost a pharmaceutical company roughly $200 million to $250 million to develop a new drug; that cost is estimated to be closer to $500 million today, a figure that also accounts for failures along the way.

A patent lasted 17 years from the date it was issued; it now lasts 20 years from the date the application is filed. And the effective patent life of a new drug - the amount of time a company can expect to enjoy an exclusive run in the marketplace - was about eight years; the average effective patent life of a drug has nearly doubled since then.

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