Perrigo Granted Market Exclusivity

May 5, 2005
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ALLEGAN — Perrigo Co.’s newly acquired Agis Industries subsidiary has received U.S. Food and Drug Administration approval to manufacture and market a generic version of a prescription medication used to treat inflammatory skin conditions.

Perrigo’s Mometasone Furoate Topical Solution USP product is the generic version of Schering-Plough’s innovator drug Elocon Topical Lotion. The Perrigo product is “AB rated,” which means the FDA considers it “therapeutically equivalent” to Elocon, which has annual sales of approximately $10 million.

A company seeking to sell a generic version of a branded product must go through the Abbreviated New Drug Application (ANDA) process and has to show that the active ingredient in its generic version has the same rate and extent of absorption within the human body as does the branded product. The company also must certify against any listed patents.

Generally, an ANDA for a generic drug is filed with the FDA after the patent on the branded drug has expired, explained Ernest Schenk, Perrigo’s manager of investor relations. However, Agis was the first to file an ANDA with a Paragraph IV certification, which challenged Schering-Plough’s patent on Elocon. In a Paragraph IV certification, the ANDA applicant certifies that a listed patent is invalid or will not be infringed by the manufacture, use or sale of the generic product.

“When they (Agis) did their ANDA filing, they said that either the innovator’s patent was not valid or that the generic equivalent doesn’t violate the patent,” Schenk said. “They filed notification and were not sued within 45 days, so they were able to go ahead with the filing. They obtained approval and are able to launch because their ANDA does not violate the patent.”

If a generic company is the first to file an ANDA that challenges a patent and prevails in the subsequent lawsuit, the company is granted a 180-day period of market exclusivity, according to the FDA.The 180-day exclusivity provision is intended to encourage generic pharmaceutical companies to bring generic drugs to the market more rapidly.

Thus, Perrigo will be the only company that can manufacture and market a generic version of Elocon during that six-month timeframe. With that jump on the market, Perrigo can price its generic product slightly below the branded version and potentially take some of Elocon’s market share. Schenk said pricing on the generic version will be “attractive.”

If the branded product is considered a blockbuster — a drug with annual sales of more than $1 billion — the profit for a generic firm can be substantial.

The six-month period begins with the first shipment of the generic version of Elocon, Schenk said, noting that manufacturing could not commence until the company received full FDA approval.

The product will hit the market “fairly soon,” Schenk said, but he couldn’t give an exact date. Whether it will be rolled out in all the company’s markets — the United States, Israel, Europe and Mexico — simultaneously has not yet been decided.

“These are things we’re still working on. That’s all part of making a product ready for market,” he said. “There may or may not be strong interest nationally. It’s a small, niche type product.”    

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