Rx DRUGS: Two Giants Team Up to Extend Key Patents
Pharmaceutical giants Schering-Plough Corp., and rival Merck & Co., have announced that they will work together to extend the life of key drug patents, the Wall Street Journal reports. The two companies will combine Schering-Plough's allergy drug Claritin and Merck's asthma drug Singulair to create one medication for both ailments. They also announced a venture that would combine Merck's cholesterol-reducing drug Zocor with Schering-Plough's experimental ezetimibe, another cholesterol-controlling medication, to potentially reduce patients' cholesterol levels by as much as 50%. The Wall Street Journal reports that the deals are unique because they involve the development of drug combinations between rival firms.
Milking the Cash Cows
The goal of the "unusual" partnerships is to extend the patent lives of these "cash cow[s]" for both companies. For example, the patent rights for Claritin will expire in two years, but the patent for Singulair does not end until 2010. Thus, if the two drugs are combined, Claritin will remain off limits to producers of generic drugs for another eight years. The loss of a key patent like Claritin could cost Schering-Plough as much as 80% of its profits. Under the new partnership, both companies will split the ownership of the drugs 50-50. Alex Zisson, an analyst with Chase H&Q, anticipates that both drug combinations will be launched in 2003 (Harris, 5/24). Raul Cesan, president and CEO of Schering-Plough, said of the venture, "We believe there is a compelling medical rationale behind these proposed dual-action combination products," noting that the "collaboration will allow the companies to develop and bring [drugs] to market more quickly" ( AP/Bergen Record, 5/24).