US ruling causes anxiety at B-MS

In a move that could cast a pall over the pharmaceutical industry, a US federal judge has said an antitrust lawsuit against Bristol-Myers Squibb over a patent extension policy can continue. A district court judge has ruled that B-MS improperly listed an additional patent on its anxiety treatment BuSpar, which kept generic competition off the market for months.

Just as importantly, the judge refused to dismiss an antitrust case stemming from the patent, filed against B-MS by three generic firms and others. The decision means that should B-MS lose the case it could have to pay pay hundreds of millions of dollars in fines, because in the US companies found guilty of antitrust violations must pay treble damages.

The case could have serious consequences for drug companies who add patents to extend the market exclusivity of a drug. Before this ruling, drug companies had done this even though such actions trigged lawsuits, because the additional drug revenues far outstripped any legal costs. This decision changes that risk/reward ratio.

'This is a signal to pharmaceutical companies skating close to the edge that they are going to incur substantial risk in doing so,' said Anthony Figg, a partner in a Washington-based law firm representing Mylan Laboratories, one of two generic firms that began selling a version of BuSpar last March. 'Now companies that add patents are exposing themselves to antitrust damages if they lose.'

B-MS was suing Mylan for patent infringement and Figg said the judge's ruling essentially kills that claim. Along with Watson Pharmaceuticals, Mylan was set to launch its version of BuSpar in November 2000 but then Bristol listed the additional patent, keeping the generic drugs off the market.

B-MS has been especially hard hit by patent expirations, which could reduce earnings by more than 6% in 2002 could fall by over 6%, company officials have said. B-MS has been trying to replenish its pipeline and keep generics at bay.