Flu Drug Tamiflu at Center of International Clamor
Sep 23, 3:55 PM EDT
Flu Drug Tamiflu at Center of International Clamor
By PAUL ELIAS
AP Biotechnology Writer
SAN FRANCISCO (AP) -- A few years ago the maker of Tamiflu could hardly give it away. Now it can't be produced fast enough, as countries around the world clamor for it as the best hope of combating bird flu in people.
That's touched off a nasty dispute between two drug companies fighting for control of the pill's growing profits while demand outstrips supply.
Meanwhile, U.S. health experts fret over the nation's small Tamiflu stockpile. Developing nations are threatening to ignore U.S. patents and manufacture generic versions to sate their need, especially amid the threat of a bird flu epidemic.
Global health experts fear bird flu, which has swept through poultry across Asia since 2003 and killed at least 63 people, could be the start of a worldwide epidemic that could kill millions more.
While current flu vaccines offer no protection against bird flu, lab and animal experiments have shown Tamiflu appears effective against it, and doctors in Asia have already been using the drug to treat people infected with bird flu.
Tamiflu also is the only drug approved in the United States to prevent the spread of human flu strains in people, which would add to its value if there's a vaccine shortage. Tamiflu makes symptoms less severe and shortens the duration of the illness by two days, a benefit that health officials said will slow the spread of an outbreak.
"It appears that this is the only effective intervention we have once someone has been infected. It's the one treatment," said Jeffrey Levi, a policy analyst for Washington D.C.-based nonprofit Trust for America's Health. "The problem is that we don't have enough of it."
Tamiflu was invented in 1996 by scientists at Foster City-based Gilead Sciences Inc., which quickly sold all commercial rights and manufacturing responsibility in exchange for annual royalties to the Swiss giant Roche Holding AG.
Roche makes Tamiflu at its Basel, Switzerland, plant and until last year, this sole source for the drug wasn't a public health issue.
Sales of the prescription drug limped along at about $76 million in 2001 and $134 million in 2002 and were so lackluster that Gilead complained about Roche's commitment to the drug.
"It has been a historically tough sell in a traditional flu market," said Sharon Seiler, an analyst for Punk, Ziegel & Co. "You need a prescription, you need to take it within 48 hours of symptoms and not all pharmacies stocked it."
But when the World Health Organization in January 2004 urged countries to stockpile Tamiflu, sales skyrocketed. For the first half of this year, sales surged to $456 million and it's expected to ring up another $234 million to $273 million in stockpile sales.
Roche has doubled its Tamiflu manufacturing capacity in each of the last two years and plans a similar expansion next year, including manufacturing Tamiflu in some of its U.S. factories.
Still, orders are coming in faster than Roche can immediately fill, and the drug requires considerable time to produce.
U.S. Department of Health and Human Services Secretary Michael Leavitt has called for a Tamiflu stockpile to treat 20 million Americans, yet there are only enough pills on hand to treat 2.3 million people. The United States ordered another 3 million treatments, which Roche expects to fill by next year.
It will take Roche two years to complete the United Kingdom's stockpile order to treat 14.6 million of its citizens.
Similar shortages are befalling other countries, too, including Southeast Asian nations thought to be the most likely site for a major bird flu outbreak. Some 30 countries have placed or plan to place stockpile orders to treat more than 28 million people.
Several developing countries are worried they will be overlooked and have suggested that WHO press Roche to relinquish its patent rights to Tamiflu, clearing the way for other companies to produce cheaper, generic versions of the drug.
On Monday, though, WHO Director-General Lee Jong-wook said global organization wouldn't pressure Roche to relinquish its patent. Last week, Roche donated enough pills to WHO to treat 3 million people.
But even as fear and preparation plump Roche's profits, Gilead is attempting to wrest control of Tamiflu's production and commercial rights. Gilead made $44.6 million on royalty revenues from Tamiflu in 2004, but is on pace to more than double that in 2005, having made $48.1 million in the first six months of the year.
In June, Gilead charged Roche with failing to adequately promote and produce the drug and invoked a contract clause to demand the return of all commercial and manufacturing rights.
Roche denied the charges and the issue appears headed to an arbitrator.
"We are confident we fulfilled our obligations under the licensing agreement," Roche spokesman Terry Hurley said.
If Gilead were to win, Roche would still manufacture Tamiflu for two years while Gilead ramped up its factory.
"We believe this is an opportunistic move on Gilead's part given that Tamiflu is entering a period of heightened demand," analysts at Credit Suisse First Boston wrote in a note to investors last week.
Gilead spokeswoman Amy Flood declined to comment this week, but executives of both companies have testified to Congress and repeatedly said that Tamiflu production won't be effected by the spat.
---
Associated Press Writer Ryan Nakashima in Milwaukee contributed to this report.
---
On the Net:
Roche: http://www.roche.com/home.html
Gilead: http://www.gilead.com/wt/home
WHO: http://www.who.int/en/
© 2005 The Associated Press. All rights reserved.
Flu Drug Tamiflu at Center of International Clamor
By PAUL ELIAS
AP Biotechnology Writer
SAN FRANCISCO (AP) -- A few years ago the maker of Tamiflu could hardly give it away. Now it can't be produced fast enough, as countries around the world clamor for it as the best hope of combating bird flu in people.
That's touched off a nasty dispute between two drug companies fighting for control of the pill's growing profits while demand outstrips supply.
Meanwhile, U.S. health experts fret over the nation's small Tamiflu stockpile. Developing nations are threatening to ignore U.S. patents and manufacture generic versions to sate their need, especially amid the threat of a bird flu epidemic.
Global health experts fear bird flu, which has swept through poultry across Asia since 2003 and killed at least 63 people, could be the start of a worldwide epidemic that could kill millions more.
While current flu vaccines offer no protection against bird flu, lab and animal experiments have shown Tamiflu appears effective against it, and doctors in Asia have already been using the drug to treat people infected with bird flu.
Tamiflu also is the only drug approved in the United States to prevent the spread of human flu strains in people, which would add to its value if there's a vaccine shortage. Tamiflu makes symptoms less severe and shortens the duration of the illness by two days, a benefit that health officials said will slow the spread of an outbreak.
"It appears that this is the only effective intervention we have once someone has been infected. It's the one treatment," said Jeffrey Levi, a policy analyst for Washington D.C.-based nonprofit Trust for America's Health. "The problem is that we don't have enough of it."
Tamiflu was invented in 1996 by scientists at Foster City-based Gilead Sciences Inc., which quickly sold all commercial rights and manufacturing responsibility in exchange for annual royalties to the Swiss giant Roche Holding AG.
Roche makes Tamiflu at its Basel, Switzerland, plant and until last year, this sole source for the drug wasn't a public health issue.
Sales of the prescription drug limped along at about $76 million in 2001 and $134 million in 2002 and were so lackluster that Gilead complained about Roche's commitment to the drug.
"It has been a historically tough sell in a traditional flu market," said Sharon Seiler, an analyst for Punk, Ziegel & Co. "You need a prescription, you need to take it within 48 hours of symptoms and not all pharmacies stocked it."
But when the World Health Organization in January 2004 urged countries to stockpile Tamiflu, sales skyrocketed. For the first half of this year, sales surged to $456 million and it's expected to ring up another $234 million to $273 million in stockpile sales.
Roche has doubled its Tamiflu manufacturing capacity in each of the last two years and plans a similar expansion next year, including manufacturing Tamiflu in some of its U.S. factories.
Still, orders are coming in faster than Roche can immediately fill, and the drug requires considerable time to produce.
U.S. Department of Health and Human Services Secretary Michael Leavitt has called for a Tamiflu stockpile to treat 20 million Americans, yet there are only enough pills on hand to treat 2.3 million people. The United States ordered another 3 million treatments, which Roche expects to fill by next year.
It will take Roche two years to complete the United Kingdom's stockpile order to treat 14.6 million of its citizens.
Similar shortages are befalling other countries, too, including Southeast Asian nations thought to be the most likely site for a major bird flu outbreak. Some 30 countries have placed or plan to place stockpile orders to treat more than 28 million people.
Several developing countries are worried they will be overlooked and have suggested that WHO press Roche to relinquish its patent rights to Tamiflu, clearing the way for other companies to produce cheaper, generic versions of the drug.
On Monday, though, WHO Director-General Lee Jong-wook said global organization wouldn't pressure Roche to relinquish its patent. Last week, Roche donated enough pills to WHO to treat 3 million people.
But even as fear and preparation plump Roche's profits, Gilead is attempting to wrest control of Tamiflu's production and commercial rights. Gilead made $44.6 million on royalty revenues from Tamiflu in 2004, but is on pace to more than double that in 2005, having made $48.1 million in the first six months of the year.
In June, Gilead charged Roche with failing to adequately promote and produce the drug and invoked a contract clause to demand the return of all commercial and manufacturing rights.
Roche denied the charges and the issue appears headed to an arbitrator.
"We are confident we fulfilled our obligations under the licensing agreement," Roche spokesman Terry Hurley said.
If Gilead were to win, Roche would still manufacture Tamiflu for two years while Gilead ramped up its factory.
"We believe this is an opportunistic move on Gilead's part given that Tamiflu is entering a period of heightened demand," analysts at Credit Suisse First Boston wrote in a note to investors last week.
Gilead spokeswoman Amy Flood declined to comment this week, but executives of both companies have testified to Congress and repeatedly said that Tamiflu production won't be effected by the spat.
---
Associated Press Writer Ryan Nakashima in Milwaukee contributed to this report.
---
On the Net:
Roche: http://www.roche.com/home.html
Gilead: http://www.gilead.com/wt/home
WHO: http://www.who.int/en/
© 2005 The Associated Press. All rights reserved.
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