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Executive Summary

Purepac and Biocraft began shipping generic cefadroxil products the week of March 6, following two favorable federal court rulings v. Bristol-Myers. Purepac is pricing its cefadroxil at $57.55 per 500 mg 50s and $111.64 for 500 mg 100s -- roughly 30% less than the Bristol-Myers prices for Duricef and Ultracef. The Biocraft product, available in 100-unit 500 mg capsules, is priced between the Purepac product and the prices Bristol-Myers charges for its two cefadroxil brands; Biocraft's average wholesale price for bottles of 100s is $172. Bristol-Myers' direct price to wholesalers is $84.08 and $162.23 for 50 and 100 unit bottles of Duricef and $91.84 and $174.21 for Ultracef. The generic cefadroxil products are now available due to a favorable patent challenge ruling for Purepac on March 3 in the Brooklyn Federal Court. The decision from Judge Shirley Wohl Kram denied Bristol-Myers' application for preliminary injunction that would have prohibited the Kalipharma subsidiary from marketing generic cefadroxil. Kalipharma had initially filed an action last July while its ANDA was still pending at FDA, asking the court to declare the Bristol-Myers patent invalid so that the generic company could begin marketing its product once approved. Purepac's ANDA was approved on Jan. 5. The ruling on the Kalipharma case was a windfall for Biocraft. Following the Kalipharma ruling, a preliminary injunction granted to Bristol-Myers, on Feb. 28, in the Biocraft case was stayed by the court on March 8. Biocraft announced that it began shipping on the same day. The preliminary ruling in the Kalipharma case concluded that the Bristol-Myers patent was invalid because it was "anticipated and not novel." Kalipharma's argument, which the court found convincing, was based on the assertion that a patent (Lilly's "Garbrecht" patent) predating Bristol-Myers' patent could produce a crystalline cefadroxil monohydrate product sufficiently similar to the Bristol-Myers product to render the Bristol-Myers patent invalid. Another Kalipharma subsidiary, Instituto Biochimico Italiano, was able to produce cefadroxil monohydrate in crystalline form using the steps outlined in the Garbrecht patent. The two cefadroxil patent rulings, however, are not yet final. Bristol-Myers says it plans to take both cases to full trial. As further recourse, Bristol-Myers announced in a release March 9 that "the U.S. International Trade Commission (ITC) has accepted jurisidction in a dispute regarding the company's U.S. Patent . . . for crystalline cefadroxil monohydrate." Bristol-Myers said it is arguing in the ITC suit that its "crystalline cefadroxil monohydrate patent is infringed by the importation of bulk material to manufacture generic versions of the drug by two generic pharmaceutical firms, Biocraft and Kalipharma." The company added that it is "confident that the validity of its patent will be upheld in the review." Bristol-Myers reported that it has already ceased manufacture of its Ultracef line, which will be discontinued once inventory runs out. A spokesperson said the decision was reached because Ultracef, marketed by Bristol Labs, is a product duplicative to Mead Johnson's Duricef and no longer merits continued marketing. One other generic firm, Zenith Labs, has received an ANDA approval for cefadroxil monohydrate. Zenith's cefadroxil was approved by FDA in March 1987; however, the company chose not to market the product following the threat of a lawsuit from Bristol-Myers.

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