TOM BEARDEN: Dr. Leah Ray Maybry keeps very close taps on Norman Phillips.
DR. LEAH RAY MAYBRY: And you haven't eaten more sweets, changed the diet-not any increased stress-
TOM BEARDEN: Phillips has an irregular heartbeat and takes a blood-thinning medication called Coumadin.
DR. LEAH RAY MAYBRY: He says he's having a little bit of bleeding from his gums-
TOM BEARDEN: Phillips must be monitored closely. If his blood gets too thin, he might begin bleeding uncontrollably.
DR. LEAH RAY MAYBRY: He gets a little bit off. Then we have to really monitor him. And he said that he had noticed that his bleeding-he cut his finger, and it was a little bit longer, and he started to bleed from his guns.
TOM BEARDEN: Coumadin is extremely dose sensitive. Small changes can have unpredictable results. Drugs like Coumadin are called Narrow Therapeutic Index or NTI drugs, meaning dosage is critical to effective treatment.
DR. LEAH RAY MAYBRY: We're going to stay where we are on the prescription. We're going to monitor that Coumadin very closely, and right now we're going to check the urine just to be sure if you have any evidence of blood in your urine, then we might drop it back again.
TOM BEARDEN: Dose sensitivity is at the heart of a new Texas law. Passed last session, the law requires pharmacists to double check with physicians before using the generic equivalents of NTI drugs. Dr. Maybry supports the legislation.
DR. LEAH RAY MAYBRY: What we're talking about is the best care for the patient, and if the physician has said that you may substitute on that prescription, all we're asking is to let us know, so we won't have to be concerned is our patient infected, are they getting sick, are they not taking their medicine, what has happened to maybe change the blood level.
TOM BEARDEN: A number of medical groups, including the American Medical Association, also support the legislation. But in recent hearings in Texas the new law sparked heated debate.
SPOKESPERSON: Nearly everyone in this room can be accused of being motivated by money. And that's why they're here, and that is where their interest lies and motivation lies.
TOM BEARDEN: Critics charge the law isn't designed to protect patients; it's designed to protect the profits of brand name companies like DuPont-Merck, the makers of Coumadin.
SPOKESPERSON: DuPont-Merck's efforts are not about protecting safety. What this is about is protecting their market share, and it's not hard to understand why. DuPont-Merck's brand name, Coumadin generates about $535 million a year.
TOM BEARDEN: Generic drug makers claim it's part of a national campaign by major pharmaceuticals, a campaign to erect barriers to the use of much cheaper generic competitors, whose use has more than doubled in recent years.
SPOKESMAN: The proposed rule will discourage substitution of generic drugs and will increase costs for consumers and for the state of Texas through increased Medicaid costs.
TOM BEARDEN: Generic drug makers can copy a brand name drug once that product's patent expires. The generic version is then submitted to the FDA for approval. Generics are cheaper, because their makers don't need to pay for research and development. That appeals to patients and their insurers. Currently in Texas, prescription forms require a doctor to specify whether the prescription must be filled with a brand name drug, or if a generic substitution can be made. The new law says that even if the physician explicitly authorizes substitution, a pharmacist refilling a dose-sensitive NTI prescription can't switch to a generic without again asking the doctor if substitution is allowed. Recently, generic drug maker Barr Laboratories received approval from the Food & Drug Administration to market the first generic substitute for Coumadin, which is the most prescribed blood thinner on the market. Barr's product, Warfarin, is 20 to 30 percent cheaper than Coumadin. Bruce Downey is the president and CEO of Barr Labs.
BRUCE DOWNEY, President, Barr Laboratories: What the legislation in Texas tries to do is place a second barrier. That is, once the physician has filled out this form saying generic substitution is required, this legislation will send the patient or the pharmacist back to the doctor and say, Doctor, did you really mean it? And we think that that extra burden is one that will really prohibit or prevent the substitution of our products.
TOM BEARDEN: Austin pharmacist Doc Hayes agrees.
DOC HAYES, Pharmacist: If we have to call a doctor again for just another question on something, right now it takes us twenty-four to forty-eight hours to get a response back from a doctor's office, and it's going to put more pressure on our time, more pressure on the doctor's time, and it's just going to cause a lot of problems.
TOM BEARDEN: Barr Labs says 20 states have considered legislation similar to Texas. But only two others, Virginia and North Carolina, passed such laws. In each state both DuPont-Merck and Barr Labs lobbied heavily. DuPont-Merck declined our request for an interview for this story because of an antitrust suit filed by Barr. But the brand name industry's trade association defends the initiative at the state level. Alan Holmer is president of the Pharmaceutical Research & Manufacturers of America.
ALAN HOLMER, PHRMA: When you have a patient that is stabilized on a particular medication, that may be one with a narrow band of that Therapeutic Index, under those kinds of circumstances, we do think that it's important that before that patient is switched, that there be a conversation with a doctor about that, one, to make sure that the doctor approves that decision. Equally importantly, it's tremendously important that the doctor know that that switch has occurred.
TOM BEARDEN: But the Food & Drug Administration disagrees. In January, the FDA sent out a "Dear Colleague" letter reminding medical professionals that an FDA-approved generic drug is interchangeable with the brand name drug. Dr. Roger Williams oversees the division that reviews generic drug approval for the FDA.
DR. ROGER WILLIAMS, Food & Drug Administration: When we saw this kind of momentum rising at the level of the states that said draw in the health care professional, our feeling was that that didn't have a strong science and technical reality to it. And what we wanted to do was set the record straight. And our opinion, as we expressed in that letter, was that these products can be used interchangeably without the health care professional being involved in the decision.
TOM BEARDEN: The brand name drug companies have never undertaken such a campaign before. Why now? Generic drug makers say it's because the use of generics has soared, taking profits away from brand name companies. In 1984, generics made up only 18 percent of prescriptions written. In 1997, that number jumped to 50 percent. Industry analyst Hermant Shah says it's also because the patents are soon expiring on a host of highly profitable drugs like Prozac and Claritin.
HERMANT SHAH, Drug Company Analyst: $25 billion worth of brand name products will be going off patent, so I think you're going to see major legislative battles over the next two to three years. Generic companies will try to plug this legal loophole, and brand name companies will not only try to prevent generic companies from doing so, but also try to attempt extension of patents of some of these key brands.
TOM BEARDEN: Bruce Downey says state legislatures aren't the only battlefront. He says regulatory fights are being waged as well. When Downey's Barr Laboratories created a generic version of the drug Premarin, the makers of that drug, Wyeth-Ayerst Laboratories, petitioned the FDA not to approve it. Premarin is an estrogen compound that millions of women take to deal with menopause and to prevent osteoporosis. It's the most prescribed drug in America. Premarin is made from the urine of pregnant horses and contains natural compounds not found in Barr's synthetic product. Wyeth-Ayerst Laboratories argued that the Barr product shouldn't be approved because it is not identical to Premarin. Dr. Michael Dey heads up the generic business unit for Wyeth-Ayerst.
DR. MICHAEL DEY, Wyeth-Ayerst: The issue at hand was the generic product, which did not have the same active ingredient as Premarin, was not considered the same under the law, and therefore, were putting women at risk, unnecessary risk, of taking a drug that had not undergone clinical safety and trials.
TOM BEARDEN: Downey says Wyeth-Ayerst never considered those compounds to be active ingredients until it was convenient to do so and accuses the company of looking for ways to keep competition out of the marketplace.
BRUCE DOWNEY: Premarin and its related products generate over a billion dollars a year in sales at branded prices, and the American consumer paying that whole bill. Wyeth-Ayerst has been extremely successful in manipulating the system to keep generics at bay.
TOM BEARDEN: But the FDA agreed with Wyeth-Ayerst and did not approve Barr Lab's generic estrogen. Other companies are making similar challenges in the general drug approval process. The FDA's Dr. Roger Williams says those battles are draining the agency's resources.
DR. ROGER WILLIAMS: We have seen some fairly vigorous attempts in recent years to sort of impede the generic substitution process.
TOM BEARDEN: The brand name companies are also looking at a third front, the U.S. Congress. They're talking to lawmakers about the need to strengthen patent protection. They say they need additional patent-protected revenue because that income makes it possible to bring important new products to the market. Research-based companies say sophisticated technologies have made the cost of drug research astronomical. It now takes about $500million to research and conduct the required clinical trials to get approval for a new drug.
ALAN HOLMER: Patents are the lifeblood of our industry. Without patents there wouldn't be pharmaceutical innovation in the first place, without pharmaceutical innovation there wouldn't be a research-based industry, and without a research-based industry, there wouldn't be a generic industry.
TOM BEARDEN: Ironically, many of the brand name companies have responded to the demand for generics by creating generic products of their own, but their financial success has been mixed. Given the fact that there is an enormous amount of money at stake for both sides, the battle is likely to continue in state legislatures, before the FDA, and in Congress.