The September 1997 generic Cardizem CD agreement between Andrx and Hoechst Marion Roussel is pro-competitive because it allows for the launch of a generic once-daily diltiazem regardless of the outcome of the patent suit between the two firms, Andrx maintained in response to class action suits.

Two class action lawsuits filed in California and Alabama on behalf of Cardizem CD (diltiazem sustained release) users charge Hoechst and Andrx with conspiring to keep generic competitors off the market.

While Andrx has agreed to defer marketing of its generic version of Cardizem CD in return for $10 mil. until resolution of the patent case, the company is arguing that the agreement is procompetitive because it will eventually be able to market a generic even if it loses the patent case.

Under an agreement between Hoechst and Andrx reached in September, if Andrx loses the patent case, it will then have the right to license and market a generic Cardizem CD product from Hoechst. If Andrx wins the case and markets its generic sustained-release diltiazem, Hoechst will make an additional payment to Andrx to compensate for lost profits, estimated at up to $100 mil. ("The Pink Sheet" Sept. 29, 1997, T&G-8).

The first class action suit was filed Aug. 20 in San Francisco state court by the firms of Lowey, Dannenberg, Bemporad & Selinger (White Plains, N.Y.) and Berman, DeValerio, Pease & Tabacco (San Francisco).

On Aug. 26, Lowey, Dannenberg, Bemporad & Selinger along with the firm of Beasley, Wilson, Allen, Crow & Methvin (Montgomery, Ala.) filed a similar suit in the Clayton, Alabama state court. The lawsuits are seeking a declaratory judgement and damages.

The California class action suit asserts that Andrx "is receiving $40 mil. per annum for simply doing nothing and delaying the introduction of its generic version of Cardizem CD into the U.S. marketplace. This accomplishes the intended effect of preventing indefinitely the introduction in the U.S. marketplace of any generic version of Cardizem CD."

As a result, Hoechst will "continue to set and maintain artificially high prices for [its] Cardizem CD products."

Other generic firms may not begin marketing generic versions of Cardizem CD until 180 days after Andrx begins marketing its product under Waxman-Hatch exclusivity as the first to file an ANDA for the product. Andrx could have begun marketing the product in July, when it received final FDA approval.

Biovail, which has its own generic Cardizem CD ready to market, charged Andrx with antitrust violations in a March 30 suit filed in Newark, N.J. federal court ("The Pink Sheet" April 13, p. 25). Biovail's public relations firm, Sitrick and Co., is handling PR for both class action suits.

Hoechst had been collaborating with Biovail in an effort to develop a branded version of sustained release diltiazem (Tiazac) to compete with Marion Merrell Dow's Cardizem CD. After Hoechst announced plans to acquire Marion in late 1994, Biovail sued.

The Federal Trade Commission issued an order directing Hoechst to provide Biovail with a right of reference to the toxicology data filed with the Cardizem CD NDA for Biovail product applications. The order stipulated that Hoechst not file subsequent litigation against Biovail regarding diltiazem.

The Cardizem CD case represents an obvious target for plaintiff's attorneys because of the previous Biovail law suit as well as prior FTC involvement. However, other settlements between innovator and generic firms could draw scrutiny by class action attorneys.

An agreement between Barr and Zeneca regarding tamoxifen caused the generic firm not to pursue its ANDA for the product after reaching an agreement with Zeneca allowing it to market an "authorized' version of Zeneca's Nolvadex. Barr is now arguing that its 180-day marketing exclusivity for tamoxifen prevents the introduction of another generic product until a final nonappealable judgement is issued in the pending patent cases by Zeneca against Mylan and Pharmachemie ("The Pink Sheet" Aug. 24, p. 23).

Similarly, Abbott settled with Ivax and Geneva in an effort to prevent generic competition to Hytrin (terazosin) until February 2000. While the financial terms of the Geneva settlement remain undisclosed, Ivax will receive $6 mil. per quarter in exchange for not marketing its generic version of terazosin until the expiration of Abbott's patent in 2000 ("The Pink Sheet" April 6, p. 28).

Hoechst/Andrx Cardizem CD Settlement is Pro-Competitive - Andrx

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