Israeli company Teva (Nasdaq: TEVA) is likely to benefit from the anthrax panic. US Senator Charles Schumer yesterday proposed allowing generic drug companies, including Teva, to manufacture generic versions of Cipro, Bayer’s ethical drug for the treatment of anthrax.
The patent for Cipro actually expires in December 2003, but Schumer is proposing that five companies that have already developed generic versions of the drug be given marketing approval, in view of the state of emergency. He said that at the moment there was only one manufacturer of antibiotics for anthrax and there was a real risk that the supply would be insufficient to handle future threats. Schumer noted that buying generic versions of the drug would substantially increase the inventory level.
The US Administration currently has enough Cipro to handle two million cases for 60 days. Accelerated procurement, however would enable the authorities to accumulate sufficient inventory to treat 10 million cases. Bayer is making preparations and planning to expand production capacity by 25% as of November. The company will manufacture 200 million Cipro capsules in the next three months, enough to treat 1.7 millon cases. In Schumer’s opinion, however, this is still inadequate.
Buying generic drugs will also substantially lower the cost. Schumer said expanding procurement to generic manufacturers would both increase inventory and lower the cost of the drugs by 50%. He noted that representatives of Teva, Barr Laboratories, and Ranbaxy of India told him they were ready to undertake significant production of a generic drug for treating anthrax, should they receive regulatory approval.
Teva said it would be glad if that happened, but said it would probably take a long time. Despite the panic and public pressure, it appears there is enough Cipro in warehouses for much worse scenarios than the current state of affairs. Furthermore, the US Food and Drug Administration (FDA) will not rush to grant marketing approval to companies. After all, that would set a dangerous precedent. “There are many companies developing anti-anthrax antibiotics. Some have reached advanced stages and are ready for production, while others are at various development stages,” a senior drug industry source said today. “In any case, it's hard to believe that the US authorities would approve these versions without comprehensive testing. This material is critical; testing it will take a long time. It’s not something you take for a headache.
”Despite the panic in the US, I don't believe authorities will approve a drug for marketing before the patent expires. That would cause terrible confusion in the industry. Bayer will raise entirely justified objections. It invested a lot of money in developing the drug and therefore received exclusive rights. Premature approval of a generic drug would harm its profits and violate an agreement.”
Published by Israel's Business Arena on October 17, 2001