Authorized generics — brand pharmaceutical products masquerading as generics — are an increasingly common brand tactic aimed at discouraging generic companies from challenging questionable brand patents. With GlaxoSmithKline (GSK) and Dr. Reddy’s having settled their litigation over generic Imitrex™, and the parties agreeing that Dr. Reddy’s will sell an authorized generic version of Imitrex™ in late 2008, before GSK’s patents on Imitrex™ expire in February, 2009, the issue of authorized generics is in the forefront once again. The effect of the same on the health of the Generics market structure in US and its ramifications pertaining to Anti-trust laws in US are to be seen in due course of time. The controversies and issues surrounding the very concept of authorized generics seem far away from melting down easily.

Imitrex, is a selective 5-hydroxytryptamine1 receptor subtype agonist and is used to treat headaches. It had sales of $890 million last year. Dr. Reddy’s can sell an authorized generic version of Imitrex tablets in doses of 25 mg, 50 mg and 100 mg respectively. Dr. Reddy’s Laboratories Ltd. though has settled a patent litigation with GlaxoSmithKline PLC (GSK.LN), but the Indian pharmaceutical company’s financial gains from the deal are likely to be limited. Under the deal, Dr. Reddy’s will be allowed to sell exclusively an authorized generic version of Glaxo’s migraine medication Imitrex, or sumatriptan succinate, in the U.S. before the patent expires in February 2009. The settlement of Dr. Reddy’s challenge of the Imitrix patent is subject to government approval. The Indian company’s foothold on the generic version of Imitrex, which had sales of $890 million in the U.S. in the year ending June 30, may be short-lived. Other companies have also challenged the Imitrex patent and, if they win their cases, Dr. Reddy’s won’t be able to sell the drug exclusively. Also the addition won’t significantly boost Dr. Reddy’s bottom line as this will not add any value, it is just marketing the drug…bottom line (net profit) accretion will not be higher than $7 million to $10 million in fiscal year 2009. But it will provide Dr Reddy’s with a steady stream of revenues in the months before the patent expires. (Source: MarketWatch).The Indian drug maker expects to start selling sumatriptan succinate tablets in the U.S. in the fourth quarter of calendar year 2008, the notice said. The settlement of the dispute is mild positive for GlaxoSmithKline, because it should provide reasonable time to switch patients to a newer product, Trexima.

Authorized generic (AG) is a pharmaceutical product that was originally marketed and sold by a brand company, but is relabeled and marketed under a generic product name. One problem with AGs is that they do not have to abide by the 180-day market exclusivity provision granted by the Hatch-Waxman Act to the first generic on the market. AGs could thus undercut the public policy rationale underlying the Hatch-Waxman Act, and have the potential of threatening the generic industry as a whole. An AG, also known as “authorized copy” or “brand-in-bottle,” may be marketed by the brand company itself or through a subsidiary, or the brand company may license the product to another company for marketing in return for royalties. The AG is sold at a lower cost, and as an alternative, to the branded product. The brand companies may choose to launch an authorized generic for a variety of reasons, including settling patent litigation with a generic company by partnering with it, to participate in the generic market once generic competition starts, or to maintain manufacturing capacity for the drug substance or the drug product. For example, of the 57 largest selling drugs in the United States, more than 30 are scheduled to loose patent protection by 2008, representing total sales of more than $60 billion. The launching of AGs allows the branded companies to maintain cash flow, albeit at a lowered rate, once generic competition starts. Similarly, generic companies may choose to partner with the brand company to launch an AG to settle litigation, to market a product they otherwise might not have been able to enter, or to increase their product portfolio.

The economic and other tangible benefits of the six-month exclusivity are significantly reduced by the introduction of the authorized generic products. The entry of a second generic reduces the revenues of the first generic company by about 80%. The introduction of AG during the 180-day exclusivity period is similar to two generic companies competing for the same market, and reduces the benefit to the paragraph IV ANDA filer.

The fact that authorized generics may compete with ANDA generic products, even during the 180-day exclusivity period was affirmed by the U.S. District Court for the District of Columbia in Teva Pharmaceuticals v. FDA (D.D.C. December 23, 2004), and by the U.S. Court of Appeal for the District of Columbia Circuit (June 3, 2005). The generic company will have to show that the introduction of AG is a willful anti-competitive conduct that prevents the generic from fairly competing in the relevant market for the drug. Factually, AGs do not prevent a generic version from being introduced into the market; AGs decrease the revenues and the profits of a generic during the exclusivity period. The generic company is thus able to enter the market, but will likely not reap the economic and non-tangible benefits of being a paragraph IV filer. The launch of every paragraph-IV generic expected to be a blockbuster has been met with the availability of an AG since the fall of 2003. This has financially hurt the generic companies, and could work against the public policy of the Hatch-Waxman Act by removing the economic incentive from challenging the validity and enforceability of weak patents.

In February 2006, a federal law closed another loophole that brands use to benefit from authorized generics. The new law contains a provision that will require brand pharmaceutical companies to include authorized generics in the “best price” calculation that is provided to the Centers for Medicare and Medicaid Services. Due to an ambiguity in the current law, some brand companies were not required to include authorized generics in their best price calculation, diverting government and taxpayer savings. According to some estimates, the new provision could save taxpayers $150 million over five years. The change will go into effect in January 2007. (Source: Generic Pharmaceutical Association (GPhA))

Today’s post comes from Gautam Bakshi and Ashu Gautm Bakshi, registered patent agents with the Government of India. Manager – IPR, Intas Biopharmaceuticals Ltd., Ahmedabad, Gujarat, India (Gautam.Bakshi – at –

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  1. I would like to acknowledge as a reference an article titled “Authorized Generics: Anti-trust Issues and the Hatch-Waxman Act” authored by Narinder Banait, an associate at Fenwick & West LLP in Mountain View, California.

  2. please let me know if this become available generic

  3. Please let me know the minute this becomes available generic

  4. The generic brand is now available from an online Canadian pharmacy. Due to a recent settlement between GSK and the Indian company that is making the generic version, it will become available in the US starting in Jan 2009.

  5. The generic brand is now available from an online Canadian pharmacy. Due to a recent settlement between GSK and the Indian company that is making the generic version, it will become available in the US starting in Jan 2009.

  6. The generic won’t be available until January 2009 now? My insurance switched to me paying for 40% of my non-generic medications. I pay almost $10 per pill of Imitrex. I have switched over to Zomig for now because they have $35 off of each prescription and Zomig does the trick.. but I still pay $42 for 9 pills.

    I use around 9 pills/month. This is getting too expensive. Prescription insurance keeps restricting more and more. Something needs to be done.

    They keep moving the date when generic will be available back.. I can’t believe that’s been pushed back again.

  7. 5-10 years ago I used to be able to obtain six of the Imitrex 6mg injections per refill with my $10 copay. Just last week I paid a $63 copay and I only get 4 injections. My doctor agreed to let me get the 100 mg Imitrex pills, copay $50 for nine. I cut these in half to save money. We desperately need the generic version of this drug.