Purdue Battles Generics, Early
The envy that many people in the biotech and pharma industry felt in the late 1990s when Purdue Pharma's revenues skyrocketed on sales of OxyContin was replaced by compassion, as the company struggled to deal with illegal use and abuse of the painkiller. Now Purdue is battlling a court ruling--sparked by would-be generic competitor Endo Pharmaceuticals--that finds the patents on Purdue's most important product are unenforceable. The company is confident it will prevail and enjoy another nine years of patent protection for OxyContin.
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In the past two years, some Big Pharma companies have revitalized their long-dormant generics activities and launched generic copies of their own drugs. They're doing this to capture business they would otherwise lose completely and to tie up generics competitors in court. While similar strategies failed in the past, a number of changes may make it more feasible. Innovators are behaving more rationally about pricing. And they are going after the most lucrative part of the generics business.
Pain Therapeutics Inc., which started up in 1998 and went public just two years later in a hot market, thinks it can turn Purdue Pharma's patent problems to its own advantage-and go it one better. Long before the OxyContin patents were deemed invalid, Purdue was struggling with the fact that its extended-release painkiller had become a drug of abuse. People looking for a quick high found they could get one by crushing "Oxies" or dissolving them in alcohol--thus circumventing the innovation in formulation that made OxyContin so effective at treating pain. Pain Therapeutics believes it has a way around the abuse problem.
Purdue Pharma's best-selling opioid painkiller, OxyContin, is starting to look more like a curse than a blessing to the company as incidents of its abuse rise. The drug is being sold on the street like a narcotic, and publicity about pharmacies being robbed and overdose deaths caused by OxyContin could hurt sales. Purdue's not the first pharma company to stand accused of doing bad while trying to do good. But the company is frustrated, even as it takes precautions to stem abusive use of its product.