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Copyright 1999 The Times-Picayune Publishing Co.  
The Times-Picayune

June 27, 1999 Sunday, ORLEANS


LENGTH: 1885 words


BYLINE: By Bill Walsh Washington bureau


For millions of people, Claritin has been a miracle drug, a tiny pill with the power to relieve the worst itching and sneezing that the allergy season can bring.

For its maker, Schering-Plough Corp., Claritin has been a wonder of a different sort. The drug's enormous popularity worldwide has generated record sales for the New Jersey company, $2.3 billion last year.

But storm clouds are gathering on the horizon for the maker of the world's best-selling antihistamine. When the drug's patent expires in 2002, generic drug makers will be able to move in and market their own low-cost versions of Claritin, not only grabbing a share of Schering-Plough's market but forcing the company to lower its price. With billions of dollars at stake, Schering-Plough has been looking for relief of its own on Capitol Hill.

For the past three years, the company has waged a relentless campaign in Congress to extend Claritin's patent. Powered by a multimillion-dollar lobbying assault and a barrage of well-timed campaign contributions, Schering-Plough has used a variety of strategies to protect its monopoly. That's not uncommon among pharmaceutical companies, especially those with blockbuster drugs such as Claritin.

The debate exposes the political and policy tensions between a drug company's rights to recover research and development costs, including those for products less lucrative than Claritin, and the public's right to low-cost drugs through the power of competition.

Schering says it wants more time to exclusively market Claritin to make up for the years it lost -- needlessly, the company says -- in the federal review process. But consumer groups and generic competitors, who have mounted a savvy and forceful political campaign of their own, say the company is trying to manipulate the system to reap huge profits by delaying competition.

"To me, it's like robbery in broad daylight," said Martha Kealey, a consumer advocate with Ralph Nader's Public Citizen, a nonprofit watchdog group. "They have figured out that they can attempt to use the political process for monopoly price protection far beyond what is in any way legitimate. If they get away with it, it's a message to any company with a best-selling drug: You did it for Claritin, why not me?"

By any measure, Claritin spent a long time under the federal government's microscope. In 1986, when Schering first applied for FDA clearance, the agency was taking about 28 months to approve drugs for sale. But it wasn't until 1993 that the FDA gave the final OK to Claritin.

All the while, the clock on Claritin's patent, its right to exclusively market the drug domestically and control the price, was ticking. The reasons for the lengthy FDA review are a matter of intense dispute. Recently, Congress asked the Government Accounting Office to get to the bottom of it.

Schering says it got caught in a bureaucratic sinkhole. It says its application was given low priority by the FDA, which it says was understaffed at the time, and a series of "unanticipated events" dragged the review out over years.

To settle that complaint, bills filed in Congress by Rep. Ed Bryant, R-Tenn., and Sen. Robert Torricelli, D-N.J., would give the Patent and Trademark Office authority to investigate whether Schering-Plough got a fair shake in front of the FDA and, if not, extend the patent for as much as three years.

"We're not looking for an automatic extension. We would like an independent body, like the Patent Office, to look at this," said William O'Donnell, a spokesman for Schering-Plough. "We believe we acted in due diligence at all stages of the review process."

What is clear is that FDA reviewers and company officials were in regular contact throughout the 6 1/2-year review, sometimes telephoning daily.

It wasn't idle chitchat, as illustrated by documents obtained from the FDA through the Freedom of Information Act. For nearly three years, government scientists raised concerns because the active ingredient in Claritin in some experiments appeared to promote the growth of cancers in lab rats. They repeatedly questioned company testing results until they were satisfied the drug was safe.

The FDA also questioned other company information. Claritin had been tested in capsule form but Schering-Plough wanted to sell it as a tablet. The FDA reviewers persistently expressed doubts that the two forms were chemically equivalent until the company performed more tests, adding to the delay.

Not all of the FDA's concerns were purely scientific, documents show. The agency objected to the company's proposed ads for Claritin and demanded "significant revisions" in December 1992. It would be three months before the two sides reached an agreement.

Documents also suggest that the company may have contributed to the delay by amending its Claritin application several times during the review. And according to the company's own documents, on at least two occasions Schering failed to send to the FDA studies the agency had requested.

Company critics, namely consumer groups and generic competitors, blame Schering for the Claritin delay and oppose the company-backed legislation to re-examine the FDA approval process.

Rep. Henry Waxman, D-Calif., who has opposed the company's Capitol Hill campaign at every turn, derides the Bryant and Torricelli legislation as the "Claritin Monopoly Extension Act."

It "is nothing more than a recycled version of the patent extension Schering-Plough has attempted on repeated occasions to sneak into law," Waxman said.

There's plenty at stake for Schering-Plough. The company makes other well-known goods, such as Dr. Scholl's foot products and Coppertone tanning lotion, but Claritin is the engine that fuels the company's growth.

Originally, the patent on Claritin was set to expire last year. But the active ingredient in Claritin, loratadine, has had its market exclusivity extended twice.

The first time was in the mid-1980s, when Congress gave a one-time extension to a host of drugs in an effort to spur more research by enticing drug companies with longer monopolies. Some received five extra years, but others, including Claritin, got two.

A decade later, Claritin and hundreds of other products won another patent extension as part of the Global Agreement on Tariffs and Trade. The United States stretched all domestic patent lives from 17 to 20 years to track international laws.

But beginning in 1996, the company tried to win more extensions by having friendly lawmakers, usually those from Tennessee or New Jersey where Schering has major corporate operations, insert language into session-ending spending bills.

It hardly mattered that the bills had nothing to do with health care. Appropriations bills are a favorite target for special-interest legislation because they are so dense, sometimes thousands of pages long, that items can slip past opponents.

But each time pro-Claritin language surfaced, consumer groups and generic drug makers howled in protest, compelling the sponsors to withdraw it. In fact, the opposition has proven remarkably successful in keeping Schering-Plough and other drug makers from winning patent extensions from Congress.

At a time of soaring drug prices, low-cost generic drugs have tremendous political appeal. Because the generic versions, which are often as much as 60 percent cheaper, can only be sold after brand-name patents expire, it is easy to portray companies seeking patent extensions as anti-consumer.

The generic drug companies have the political good fortune of being aligned with consumer advocates. And they have made the most of it, taking out pro-consumer newspaper ads blasting the Bryant-Torricelli legislation and working with seniors groups to pressure co-sponsors.

Those companies have not relied solely on the grass-roots campaign to make their point on Capitol Hill. Records show that the Generic Pharmaceutical Industry Association contributed $20,500 to the Republican Party in March 1998. Individual drug makers, such as Barr Laboratories in New York, kicked in $34,500 to the GOP. All the contributions were in "soft money," which is restricted to get-out-the-vote and party-building activities and is not regulated by the federal government.

Still, their financial investment pales in comparison to what Schering-Plough has spent trying to protect its monopoly on Claritin. Information compiled by the Center for Responsive Politics shows that the company spent $2.6 million lobbying in 1997. The chief recipient was Baker Donaldson, a Tennessee company headed by Howard Baker, a former senator and White House chief of staff.

The company has bought other big-name talent including Peter Knight, a prominent Democratic fund-raiser and Clinton-Gore ally, and former Sen. Dennis DeConcini, D-Ariz., and Rep. Vin Weber, R-Minn.

Despite the lobbying muscle, it quickly became evident that a flat-out extension of Claritin's patent was not going to work. So, the company tried a novel approach. Along with drug maker Bristol-Myers Squibb, Schering proposed simply buying an extension.

Under the plan, makers of selected drugs, including Claritin and Bristol-Myers' cancer treatment Taxol, would pay the government 3 percent of royalties to be earmarked for biomedical research. In exchange, the companies would win extensions on their patents for as long as five years.

The proposal attracted plenty of attention but little political support.

The company then opened up another front in Congress, this time through the auspices of Sen. Frank Lautenberg, D-N.J. Lautenberg said Claritin's lengthy approval by FDA should be reviewed by the patent commissioner, a proposal that would resurface in 1999 behind the Tennessee-New Jersey team of Bryant and Torricelli.

With Claritin's patent deadline looming, the company stepped up pressure on Congress. In 1998, Schering had nine lobbying companies under contract, and its lobbying payroll swelled to $4.2 million, records show.

Between 1997 and 1998, the company's political action committee gave more than $280,000 to the Democratic and Republican parties.

In March, the company's political action committee sent a $50,000 check to the Democrats' Senate fund-raising arm. As negotiations over appropriations heated up in September in the Republican-controlled House, the company paid $100,000 to the GOP's congressional fund-raising wing. Thirteen days later, it wrote a $50,000 check to Senate Republicans -- again, all in soft money.

But again, it wasn't enough. In a final mad dash, House Republican leaders tried to attach Lautenberg's amendment onto the omnibus appropriations bill, a 4,000-page document that accounted for two thirds of federal spending. Lawmakers openly complained that the document was so big they hadn't read it. But before the bill was finalized, opponents caught wind of the maneuver and publicly labeled sponsors as anti-consumer. The provision was withdrawn.

The company has come back this year with the Bryant-Torricelli bills, which are expected to get their first public hearing in July.

Company officials said they have been wholly above-board in their efforts. They also say that they will continue pressing Congress until the patent life on Claritin is extended or it expires, whichever comes first.

LOAD-DATE: June 29, 1999

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