Opinion ID: 788070
Heading Depth: 2
Heading Rank: 2

Heading: Drug Industry

Text: 7 We believe it helpful to describe at the outset the place of generics in the drug industry. Generic drugs are chemically identical versions of branded drugs and cannot be put on the market until the patent on the branded drug has expired. Generic drugs are typically sold at a substantial discount from the name brand drug. To market and distribute such a drug in the United States, manufacturers must receive approval from the United States Food and Drug Administration (FDA). A generic manufacturer files an Abbreviated New Drug Application with the FDA to establish that its drug is therapeutically equivalent to the innovator drug. 8 As part of the approval process, pharmaceutical companies must identify the supplier of the active pharmaceutical ingredient they intend to use in manufacturing the product. Ingredient suppliers, such as ACIC/Brantford, submit a Drug Master File (Master File) to the FDA which summarizes the equipment, manufacturing process, and control measures used to prepare the particular ingredient. The supplier submits a reference letter to the FDA on behalf of a particular manufacturer, stating that it will follow the methods in its Master File for that manufacturer. 9 The parties dispute the effect of a Master File reference letter. Plaintiffs maintain it is industry practice for such a reference letter effectively to bind a supplier actually to provide the chemical to the manufacturer. They also state that manufacturers and suppliers generally do business in reliance on oral agreements. Defendants respond that the filing of a reference letter is nothing more than a preliminary action that creates no obligation on the part of the supplier. 10 The FDA rates a generic product as AB equivalent if it is a bioequivalent to the branded product. The generic warfarin sodium products currently on the market all have been rated as AB equivalent to the branded drug Coumadin. Despite this rating, generic drugs may have some minor differences from the branded drug, such as the water content, crystalline structure, and particle size of the active ingredient.
11 Warfarin sodium, the drug at the root of this litigation, is an oral anti-coagulant medication prescribed by a physician and taken in tablet form. This drug thins the blood and helps prevent blood clots that can cause strokes and heart attacks. Warfarin sodium is viewed as a narrow therapeutic index drug because the dosage has a narrow range of therapeutic value: the range between too low a dose, which is ineffective, and too high a dose, which may cause harmful side effects, is narrow. Its active ingredient is known as bulk warfarin sodium or warfarin sodium clathrate. The parties dispute whether the process to make clathrate is simple or complex; plaintiffs assert it can take years to develop a process to produce clathrate. 12 For nearly 50 years warfarin sodium has been manufactured by DuPont under the well-known brand name Coumadin. Although DuPont's patent for Coumadin expired in 1962, it remained the only manufacturer of warfarin sodium for the next 35 years. Its annual sales eventually exceeded $500 million. Several companies received FDA approval to market warfarin-related products in the 1980's, but these products were unsuccessful. 13 In 1990 the New England Journal of Medicine published the results of two studies that created renewed interest in the efficacy of warfarin sodium. A few companies thereafter began the process of gaining approval to enter the warfarin sodium market. Currently, four companies sell warfarin sodium in the United States: DuPont, with Coumadin since 1956; Barr, with generic warfarin sodium since July 1997; Geneva, with generic warfarin sodium since October 1998; and Taro Pharmaceutical Industries Ltd. (Taro), which has marketed generic warfarin sodium since September 1999. Key for a manufacturer to the production of warfarin sodium is obtaining a source of clathrate.