Wednesday, May 18, 2011

Pfizer Blames Teva, Ivax for ’Billions’ in Losses From Neurontin Patent - Bloomberg

Pfizer Inc. (PFE), the world’s biggest drugmaker, told a federal jury that it lost billions of dollars in sales from unauthorized copies of the epilepsy drug Neurontin and it wants the money back.

Pfizer claims copies of the pill made by Teva Pharmaceutical Industries Ltd. (TEVA) and its Ivax unit, along with Actavis Group hf’s Purepac unit, infringe a patent that expires in 2017. During opening statements today in federal court in Newark, New Jersey, the generic-drug makers rejected the claim and told jurors that the brand drug only became a blockbuster for Pfizer because of the company’s illegal marketing activity.

Low-cost versions of Neurontin have been on the market since 2004. A federal appeals court in 2007 overturned a U.S. judge’s ruling that they didn’t infringe Pfizer’s patent, setting the stage for a trial that began today after 11 years of litigation.

“Teva and Ivax took Pfizer’s product for themselves,” Pfizer lawyer Jack Blumenfeld told the jury in his opening statement. “The result was that Pfizer lost billions of dollars, virtually overnight.”

Neurontin, whose active ingredient is gabapentin, was a $2.5 billion-a-year drug for New York-based Pfizer before the copies entered the market. The patent is for a process to make gabapentin with fewer contaminants.

Generic Version

Ivax, then a standalone company, began selling a variation of the drug in August 2004. Purepac started selling its generic version in October 2004 with Teva after the companies agreed to share any potential legal loss. Pfizer’s sales in 2005 plunged to $150 million a year, Blumenfeld said.

“Ninety-four percent of the Neurontin market disappeared within that year,” he said. “It had an impact of more than $2 billion that first year, and more as time went on.”

Petah Tikva, Israel-based Teva, the world’s biggest generic-drug company, and Iceland-based Actavis, which has U.S. offices in Morristown and Elizabeth, New Jersey, contend the patent is invalid because it’s an obvious variation of already expired patents, including one that ended in 2000.

“Pfizer didn’t want to risk good, honest competition in the marketplace,” said Elizabeth Holland, a lawyer for Ivax. “That’s what this case is really about.”

The generic drugmakers contend that, even if they lose on the patent question, Pfizer shouldn’t be able to recoup money it obtained because of the unlawful promotion of Neurontin.

Blockbuster Drug

Warner-Lambert Co., which Pfizer bought in 2000, built the drug into a blockbuster by promoting it for uses not approved by the U.S. Food and Drug Administration, Teva contends. In 2004, Warner-Lambert pleaded guilty and agreed to pay $430 million to resolve U.S. criminal and civil allegations that it marketed Neurontin for so-called off-label uses.

Neurontin was approved by U.S. regulators as a supplemental drug to combat seizures. It paid doctors consultant fees to attend conferences in Hawaii and Florida and the 1996 Atlanta Olympics, and encouraged doctors to prescribe the drug for bipolar mental disorder, Lou Gehrig’s Disease, attention deficit disorder and even migraines, according to prosecutors.

“The vast, vast majority of sales of Neurontin by Pfizer were based on this misleading information to doctors,” Holland said. “It had nothing to do with the patent. It had to do Pfizer breaking the law and misleading doctors.”

Blumenfeld said all that happened before 2004, so it shouldn’t be an issue in the trial.

‘Illegal Marketing’

“Neurontin was not a blockbuster drug because of illegal marketing,” Blumenfeld told the jury. “It was a blockbuster drug because doctors believed it had real value.”

In January, Pfizer was told to pay another $142.1 million for violating U.S. racketeering laws in a civil suit brought by Kaiser Foundation Health Plan Inc. The company has said it would appeal the jury verdict and damage award.

The company also is facing lawsuits accusing it of illegally promoting the drug and hiding risks that use of the drug could lead to suicidal tendencies.

Novartis AG (NOVN)’s Sandoz generic-drug unit also was part of the case and settled last month. Terms weren’t disclosed.

The case is Warner-Lambert Co. v. Purepac Pharmaceutical, 00-cv-2931, U.S. District Court, District of New Jersey (Newark).

To contact the reporters on this story: David Voreacos in Newark, New Jersey, at; Susan Decker in Washington at

To contact the editors responsible for this story: Michael Hytha at and; Allan Holmes at

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