Pawns in Their Game

Does the world need another ADHD drug?

With nearly a half million kids on six different mind-bending drugs, you’d think the psychiatric profession already had enough options for attention deficit hyperactivity disorder. But that’s not the way our drug approval system works. It’s a free market out there, open to all comers. So this Thursday the Food and Drug Administration’s Psychopharmacologic Drugs Advisory Committee will consider another drug for ADHD – Cephalon’s Sparlon, which is generically known as modafinil.

Late night truckers and shift workers are already familiar with this drug. In their sleep-disordered world, it is known as Provigil. It’s not an amphetamine. It’s mechanism of action, to use the mystifying argot of the drug scientists, is “poorly understood.” In layman’s language, that means they have no idea how or why it works.

For its FDA submission, the company conducted a clinical trial on less than 700 children. They compared it to a placebo. Drug companies coming out with me-too drugs don’t have to compare it to existing therapies, which in this case would have been Ritalin or any of the other drugs for ADHD. They only have to prove it is better than nothing. And apparently it was. According to the trial, modafinil improved kids’ scores on exams designed to measure attentiveness.

But there wasn’t much other good news for Cephalon in that clinical trial. According to a report by FDA reviewer Andrew Mosholder released last week, two kids experienced psychotic or manic episodes; four kids considered suicide; and nine kids engaged in serious “aggression events” in the modafinil trial. That was the equivalent of 20 negative reactions for every 100 patients who take the drug for a year. Only Adderall and a skin patch had a worse record. In the cautious words of the reviewer, “patients and physicians should be aware of the possibility that these events, when they arise in the course of drug treatment of ADHD, may represent adverse reactions to drugs.”

Given those risks, why is Cephalon so gungho to get this drug approved? ADHD drugs have been in the news a lot lately, but not for any reasons that would encourage new entries in the market. In February, the FDA safety advisory committee voted 8-7 to slap a black box warning on all the drugs because they increase the risk of heart attacks and strokes, even in kids.

One possible explanation for their dogged pursuit of modafinil for ADHD can be found in the company’s annual report, which was filed with the Securities and Exchange Commission last week. Modafinil accounted for nearly half of Cephalon’s $1.2 billion in sales last year. And while some of that came from physicians prescribing it for ADHD off-label, the vast majority came from narcoleptics, shift workers, and truck drivers looking for a non-addicting stimulant. Unfortunately, the original patent on modafinil ran out in December, and four generic manufacturers were preparing to enter the market with cheap generics.

But Cephalon had an ace up its sleeve. It filed suit against the four firms for patent infringement based on a recently modified patent that claimed modafinil’s particle size had something to do with its effectiveness. Unlike the original patent on the drug, that patent doesn’t run out until 2014.

We’ll never know if that patent could withstand a court test since the Frazer, Pa.-based firm dropped its suit after agreeing to pay the generic makers over $200 million to withdraw their applications. Rather than fight for early access to the market, the generic firms agreed to hold off selling modafinil until October 2011 – in effect splitting the difference with Cephalon.

If that smells like a bribe to you, welcome to the wacky world of generic drug manufacturing, where not making a drug can be just as lucrative as making and selling it – and, of course, a lot less work.

But there was one more clause in the contract, according to the SEC filing. Cephalon will get an extra six months of exclusivity for modafinil if they get a pediatric use designation from the FDA. ADHD will do just fine, thank you.

So now let’s do the math. They currently sell just under $500 million a year without generics in the market. Another six months of exclusivity from a pediatric designation will earn them at least half that in sales five years now. That will be just about enough to pay for the bribe, er, the cost of the patent suit settlement.

I’m sure we’ll hear from plenty of testimony on Thursday from parents and physicians who swear by this new drug. But the jaded business reporter in me wonders if the kids are just pawns in the company’s patent game.

Posted by gooznews at March 20, 2006 08:16 AM