Drug maker sues compounding pharmacy

December 17, 2009
By: Edie Lau
For The VIN News Service

Bayer Healthcare LLC is taking Wedgewood Village Pharmacy Inc. to court, accusing the compounding pharmacy of infringing on a patent that protects the Bayer product Marquis, an oral paste-style medication used to treat equine protozoal myeloencephalitis (EPM).

The suit, filed Oct. 19 in U.S. District Court in Wedgewood’s home state of New Jersey, challenges Wedgewood’s preparations and sales of Toltrazuril, which, like Marquis, is a triazine-based anti-coccidial.

Wedgewood denied the infringement accusation in a terse response filed Friday.

The suit is a rare public tussle between a drug maker and compounder over a source of growing tension in the pharmaceutical world. Manufacturers increasingly are dismayed by compounding, which has been on the rise for the past two to three decades.

Compounding is the practice of manipulating the dosage, form and/or flavor of drugs to meet the specific needs of individual patients. Such custom-made concoctions are considered essential for treating patients with special needs, such as exotic animals. Because compounded preparations are presumed to have limited application, compounders are exempt from the extensive, expensive U.S. Food and Drug Administration (FDA) drug testing and approval process.

But as the popularity of compounding has grown — notably in veterinary medicine, in pediatrics, for pain management and for treatment of post-menopausal symptoms — critics say the practice is being stretched beyond its authorized purpose by pharmacies that compound mimics of commercially available, FDA-approved drugs.

The result, from manufacturers’ perspective, is unfair competition. Opponents of liberal compounding practices also have concerns about safety and efficacy.

Neither Bayer nor Wedgewood would comment substantively on the suit. Wedgewood Vice President for Sales & Marketing Marcy Kelly said only: “We will be defending the lawsuit by Bayer against us and believe that we will be vindicated.”

Bayer is one of three plaintiffs in the case. The others are University of Kentucky Research Foundation, which owns the patent titled “Formulations and Method to Treat and Prevent Equine Protozoal Myeloencelphalitis”; and New Ace Research Co. of Kentucky, exclusive licensee of the patent. Bayer holds an exclusive sub-license from New Ace.

According to the complaint, EPM is the most commonly diagnosed neurological condition of horses in the United States. The condition is caused by a coccidium known as Sarcocystis neurona, a type of protozoan parasite.

Bayer’s Marquis Antiprotozoal Oral Paste is the first product approved by the FDA for treatment of EPM. Its active ingredient is a triazine-based anti-coccidial called ponazuril.

Wedgewood compounds a toltrazuril-based preparation in an apple-flavored oral paste and in suspension form.

According to Dr. Kenton Morgan, chairman of the Biological and Therapeutic Agents Committee of the American Association of Equine Practitioners (AAEP), toltrazuril and ponazuril are closely related but not exactly the same. Ponazuril is a derivative of toltrazuril and is sometimes referred to as toltrazuril-sulfone.

Morgan said other classes of drugs have been available in the past in this country to treat EPM, but at the moment, the only FDA-approved product still on the market that he’s aware of is Marquis.

“EPM in general is not a common disease in the horse,” Morgan said, “but when it does occur, it is a very serious and debilitating disease."

Bayer declined to divulge the value of its Marquis sales.

Until recently, attempts to limit the reach of pharmaceutical compounders have been largely handled by the FDA. The agency over the years has sent warning letters to some compounding pharmacies — including to Wedgewood in 2006 — but appears to have taken little to no decisive enforcement action.

In Wedgewood’s case, the FDA alleged that the company was compounding “essentially copies of commercially available products.” (Toltrazuril was not among the preparations listed in the letter.) The pharmacy responded with a detailed rebuttal, which it also posted on its Web site. Kelly said in an interview in October that the company heard nothing more from the FDA afterward.

The FDA has been itself the target of lawsuits by various compounding pharmacies challenging the agency’s authority to regulate their profession.

Morgan, an equine veterinarian who worked in technical services for Bayer about 10 years ago and now serves in the same capacity for Pfizer, interprets Bayer’s suit against Wedgewood as a sign of frustration.

“No question about it, they’re frustrated,” Morgan said. “I can’t speak for Bayer, but in my opinion, they’re frustrated by the lack of action by the regulatory folks, so this is one way they can take action against what they consider is an illegitimate product competing with their product.”

Though rare, the civil complaint is not the first by a manufacturer against a compounder. In 2003, Bayer filed a lawsuit against Tabor Home Medical Services of Oklahoma, alleging deceptive trade practices, according to Bayer spokesman Bob Walker. The complaint accused Tabor of knowingly purchasing counterfeit enrofloxacin, an antibiotic made by Bayer for cattle (trade name Baytril 100), manufacturing unapproved material and misrepresenting its quality to veterinarians.

Walker said the case was settled in Bayer’s favor with a permanent injunction prohibiting Tabor from buying or selling enrofloxacin.

In 2004 and 2005, DUSA Pharmaceuticals of Massachusetts, which makes dermatological products for humans, sued two compounding pharmacies — The Cosmetic Pharmacy of Arizona, and the New England Compounding Center of Massachusetts — alleging patent law violations.

According to a DUSA news release, DUSA prevailed in both instances — by default against The Cosmetic Pharmacy, which did not defend itself, and by extracting an agreement with the New England Compounding Center that it would not infringe on two patents that were the subject of the suit.

The case of Bayer et al. vs. Wedgewood raises the conflict’s profile because of the prominence of the parties. Bayer, of course, is an international drug giant. And Wedgewood, though perhaps not well known outside of medicine, is a giant in the compounding industry. The company claims to have filled more prescriptions than any other compounder during its 25-year history. Its catalog lists some 450 preparations available for veterinary medicine alone.

Morgan predicted that other drug manufacturers will take their grievances to court, though not in great numbers. “I think we will see more of these as we go forward, but I don’t think you will see a huge rash of them, because it’s not cheap to go to court,” he said.

Sherri Oslick, a patent lawyer in Chicago who follows the biotechnology and pharmaceutical industries and co-authors the blog www.patentdocs.org, said she was surprised by the Bayer suit.

“I don’t know the size of, or the extent of business of, Wedgewood Pharmacy, but at this point I have to presume they are quite large,” she wrote in an e-mailed response to questions. “Litigation is extremely costly, and generally is only worth it if the plaintiff is looking at a substantial damages figure. Otherwise, typically the patentee will look to offer a license to the alleged infringer, and the alleged infringer may agree to one simply to avoid the cost and hassle of litigation.”

Oslick said litigation costs are on the scale of hundreds of thousands, if not millions, of dollars. She said patent damages generally are calculated by either lost profit — what the plaintiff would have made but for the sales of the defendant — or reasonable royalty, which is a percent of the defendant’s infringing sales.

Search VIN news

Recent stories

All news categories

Latest News

Academia & Education

Associations & Organizations

Business & Economics

Clinical & Research Studies

Clinical Practice

Disease Outbreaks & Information

Emergencies & Disasters

Employee & Professional Support

Legal Issues

Meetings & Symposia

Pharmaceuticals

Product diversion

Regulations & Legislation

Research & Industry

Scope of practice

State of the Profession

Work & Life

About us

Follow us