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Executive Summary

MYLAN IS FIRST WITH GENERIC INDOMETHACIN: TRADE SHIPMENTS will begin "within 30 days," the firm said following the April 20 approval of both 25 mg and 50 mg dosage forms of the nonsteroidal anti-inflammatory. The generic mfr. noted that its version of indomethacin will be in line with traditional generic pricing -- "at about half of Merck's price" for Indocin. The Mylan indomethacin will be marketed in green hard shell capsules, the firm said. FDA review of Mylan's indomethacin paper NDA took more than a year-and-a-half, Mylan indicated. The firm said it filed for approval of its generic indomethacin in September 1982, nine months after Merck's product patent for Indocin ran out in December 1981. FDA is also understood to be reviewing paper NDAs for indomethacin from at least two other generic firms, Chelsea and Zenith. Pricing for indomethacin could be more complicated than for most drugs under generic competition. A dispute between Merck and generic mfrs. over the importation of bulk indomethacin produced by Merck's still-patented manufacturing process for the compound could have an effect on Merck's pricing flexibility. In February, Merck filed an amended complaint with the U.S. Internatl. Trade Commission against 23 firms, including Chelsea and Zenith, for the importation of indomethacin produced overseas via the alleged infringement of Merck's most recent, and significantly cheaper, patented production process. On April 26, Merck asked that the investigation by the commission be extended to include Mylan. Since the cost of using Merck's initial, and no longer patented, process is estimated by Merck to be three times more expensive than the still-patented production method, a federal ruling in support of Merck's complaint would give the brandname firm more leverage to thwart Indocin price cutting. If the generic mfrs. are forced to fall back on the earlier production method, Merck will have more margin with which to work.

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