Some of the most anticipated generic launches in recent years will be more limited than originally projected following court decisions creating 180-day exclusivity periods for generics of Bristol-Myers Squibb's Pravachol and Merck's Zocor .

Pharmacy benefit managers, most notably Express Scripts, had been planning on generics of Zocor (simvastatin), and to a lesser extent Pravachol (pravastatin), to drive down prices in the cholesterol agent market.

Now, however, five tentatively approved pravastatin ANDAs will have to wait until the end of October before coming to market while Teva enjoys 180-day exclusivity for its 10 mg, 20 mg and 40 mg doses.

Teva and Ranbaxy are expected to launch their Zocor generics when the compound patent expires June 23. Tentatively approved applications from Aurobindo and Cobalt will be held off until early next year.

While the Zocor exclusivity issue is not completely resolved (the case has been remanded back to FDA), it seems likely that the statin market will look considerably different - and have considerably higher pricing - in the second half of the year than many expected.

[Editor's note: In-depth coverage of the court rulings on both Pravachol and Zocor appeared in ¹ "The Pink Sheet" DAILY . To read the articles and sign up for a free trial, visit www.ThePinkSheetDAILY.com.]

The court rulings could cause policymakers to reflect again on the value of 180-day exclusivity, which will now be responsible for keeping prices in a major consumer market above where they would otherwise have been.

The generic industry argues that 180-day exclusivity offers long-term benefits for consumers, since it creates an incentive to challenge patents and brings generics to market years before they might otherwise launch. That argument seems difficult to make in the instances of Zocor and Pravachol, however, since the innovators appeared to have little interest in defending their out-year patents.

On the other hand, the court wins may have limited immediate impact on policy since they involved applications regulated under the previous exclusivity schemes that have been replaced by provisions contained in the Medicare Modernization Act of 2003.

The statin market in the second half of the year will also be a high-profile test of the extent with which "authorized" generics act as legitimate second generic players, which under normal conditions should force prices down significantly. Watson is distributing an authorized Pravachol generic; Dr. Reddy's will handle the Zocor authorized generic.

Pravachol's Forgotten Stepchild: Ranbaxy's 80 mg

Another potential harbinger of concern for the generic industry in the statin saga is that one of the ANDAs with exclusivity - Ranbaxy's 80 mg pravastatin - has been unable to launch. While the product received tentative approval, it has not received final clearance from FDA. The company says its exclusivity is not at risk while it works towards final approval.

Ranbaxy is not discussing the reasons for the hold up, and approval could come shortly, but problems for generics at this stage can include a range of issues, from changes to the drug master file to the need to update labeling to match modifications in an innovator's package insert.

Ranbaxy's delay at FDA illustrates a risk generics could face under the MMA system, despite the new law's potential to provide greater clarity surrounding exclusivity triggers.

As part of an effort to prevent applicants with exclusivity from serving as a roadblock for other applications, MMA contains several provisions designed to force first-filers to use or lose their exclusivity.

FDA is still in the drafting stages of a reg to implement the changes, but the issue could come to a head this summer as the applicants who submitted shortly after MMA was passed reach the first forfeiture milestone.

A Future Of Forfeitures - Or Fees?

Applicants now must obtain tentative approval within 30 months of ANDA submission or forfeit their exclusivity. This threat of suddenly evaporating exclusivity makes moving through the Office of Generic Drugs expeditiously vital for generic firms.

It may be these changes related to forfeiture (which can also be caused by a delay in marketing after a court win) that could most alter how the generic industry conducts itself in the coming years.

FDA's generic drug office is under tremendous pressure from a ballooning number of applications, and median review times are hovering at slightly more than 16 months. A series of process improvements to speed reviews is underway (² Also see "Generic Reviews Getting NDA-Style Communication Enhancements" - Pink Sheet, 6 March, 2006., p. 23).

FDA has acknowledged that the new forfeiture provisions put them in the "hot seat" (³ Also see "Generic Exclusivity Forfeiture Provisions Put FDA In “Hot Seat”" - Pink Sheet, 10 October, 2005., p. 16).

One idea that the agency has floated for improving the performance of the Office of Generic Drugs is to charge ANDA applicants user fees (⁴ Also see "FDA Faces Pricing Pressure As Generic Drug User Fee Debate Begins" - Pink Sheet, 27 February, 2006., p. 8).

However, since formally proposing the concept to a cool reception at the Generic Pharmaceutical Association's annual meeting, the Administration does not appear to be actively moving the idea forward and the speech which outlined the proposal seems to have been removed from FDA's website.

In fact, at a recent appropriations hearing, HHS Secretary Michael Leavitt did not mention the idea of user fees when questioned about OGD's performance.

Sen. Herb Kohl (D-Wisc.) asked Leavitt at an appropriations subcommittee hearing May 3 whether he supported current funding levels for the office.

Leavitt agreed the approval process needs to be sped up, but said it could be accomplished within the current budget. He suggested OGD focus on ANDAs for new products rather than applications for "repeats" of generics already on the market.

"I fear the secretary is defending business as usual at the FDA and that's unacceptable in my book," Kohl said.

Kohl has filed an amendment to the 2006 supplemental spending bill to boost funding for ANDA approvals by $20 mil. in an attempt to reduce the backlog - an estimated 800 approvals - by 20%.

The senator has been in discussions with FDA Commissioner-nominee Andrew von Eschenbach to address the review issue.

Failure To Launch: Pravachol, Zocor And The Future Of 180-Day Exclusivity

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