Generic companies

In October 2002, a US federal judge ruled that three generic companies had infringed on AstraZeneca s patent. However, a fourth company that has its own patent for coating the drug was cleared to market the drug in generic form. 

Ten brand-name companies and 10 generic companies used these types of agreements with respect tol4 drug products. 

Brand-name and generic companies produced a range of other types of agreements relating to the drag products included in the study. These agreements are not discussed in this report. 

Drug Product Time Between Agreement Date and Patent Expiration Effective Date of the License Brand-Name Prodncts Annual Net Sales in the Year Prior to the Agreement Royalties Paid by the Generic Company to the Brand-Name Company for the License Agreement... 

E 2 years, 6 months 15 months after date of agreement. Between 100 and 250 milhon The generic company s royalty pajnnent is 20% of generic company s first 15 million in net sales, 40% of net sales between 15 and 30 million and 60% of net sales greater than 30 miUion. 

F 3 years, 6 months 17 months after date of agreement. Between 100 and 250 million A royalty pajment of 7.5% of the generic company s net sales for months 21 through 15 prior to expiration of patents, 5% royalty of net sales for months 14 through 8, and 2.5% of net sales for months 7 through end of patent term. 

G 10 years, 5 months Immediately Less than 100 milhon No royalty payment unless generic company changes its formulation, then it must pay a 5% royalty. 

The supply agreement sets forth the transfer price at which the generic company is obligated to purchase all of its requirements. The generic apphcant is required to pay a 50% royalty of the net profits from all sales of the generic product. 

The supply agreement was for not only the strength of the drug product for which the generic company was the first ANDA IV filer, hut also for two additional strengths of the same drug product for which it had not filed an ANDA with a paragraph IV certification. 

The agreement guaranteed the generic company the right to enter the market with a generie version of the product (under the NDA) either 6 months prior to patent expiration, or immediately upon the patent being declared invalid or unenforceable. Beeause the supply agreement was not implemented, the brand-name company... 

One of the cross-royalty provisions provided the generic company with a 1 percent royalty on net sales of the brand-name drug product. Thus, the brand payment was in the form of a royalty on the brand-name drug company s drug product. 

See Appendix E, Question 4 for generic companies. These drug products encompass the eight products listed in Table 4-3 as subject to multiple 30-month stays. 

In the second category of citizen petitions described in Table 6-1, brand-name companies requested the FDA refrain from approving a generic version of the drug product unless the generic company certified... 

Specifications in the Special Orders Sent to Generic Companies... 

In addition to routine questions about the name, address, and incorporation date of the responding company and its subsidiaries, and the name, business address, and official capacity of the official supervising the company sresponse, the FTC asked generic companies (the company ) to provide answers to the following five questions ... 

At least three other generic companies have filed ANDAs for generic gabapentin following Purepac and Apotex. Pfizer has sued most for patent infringement. 

---