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SANDOZ' CLOZARIL YIELDING NO PROFITS

Executive Summary

SANDOZ' CLOZARIL YIELDING NO PROFITS, the company maintained in an advertisement that ran Jan. 2 in major city newspapers nationwide. "So far, Sandoz has not made a single penny of profit on Clozaril," the ad states. "And, with fewer than four years of U.S. marketing exclusivity left, after spending many millions in development costs in the U.S., there is no certainty of profit at all." Twenty-two states have filed antitrust lawsuits against Sandoz, asserting that the manufacturer's limited distribution system is "anticompetitive." The states said they are seeking "to eliminate the tie" of the antischizophrenia drug (clozapine) to FDA-required blood monitoring services, which the firm has licensed exclusively to Caremark and Roche Labs. A Sandoz spokesperson said the firm took out the ads to clarify public "misunderstandings" and to correct "unclear, contradictory reports" about Clozaril that have appeared in the press. The ad ran in eight to 10 newspapers, including the Washington Post, the New York Times, the Wall Street Journal, the Los Angeles Times and USA Today. While the suits do not specifically address Sandoz profits, they suggest that the company stands to collect large revenues from Clozaril sales. One lawsuit notes that there are 2.4 mil. schizophrenics in the U.S. and that "about 25% of all the beds used for any medical treatment in the U.S. are used by schizophrenia patients." However, it also notes that patients who are resistant to conventional therapy and thus candidates for Clozaril comprise fewer than 10% of the schizophrenia patients. The ad states that Sandoz will "receive no revenues and no profits" from the distribution/monitoring services (Clozaril Patient Management System, or CPMS). The states' complaints cite two company documents, including a "CPMS Partnership Evaluation," which states that "100% of drug revenue [will go] to Sandoz" and "50% of CPMS revenue to Sandoz." Sandoz' spokesperson countered that the attorneys general have received through deposition copies of the company's contracts with Caremark and Roche Labs. It is "clear" from the contracts that Sandoz receives no revenue from the distribution/monitoring system, he said. He added that he was "not familiar" with the documents cited in the complaints. The ad also estimates that the annual cost for Clozaril plus the CPMS service is $ 8,944 per patient in the U.S., regardless of dosage strength or location of the sale. It maintains that the price for clozapine in the U.K., where it is available without the service charges, ranges from "nearly $ 5,000" to "over $ 9,000 annually," depending on the dosage strength. The lawsuits contend that Sandoz' "CPMS Partnership Evaluation" document lists the "Clozaril drug cost [as] $ 500/year" per patient. The drug's potentially fatal side effect, agranulocytosis, is completely avoidable if therapy is stopped when a drop in white blood cell counts is detected, Sandoz noted. Fifty clozapine patients have died overseas, where monitoring is not mandated, the ad states, but "not a single death in the U.S. has been related to a failure to properly monitor Clozaril patient white blood cell levels." One U.S. Clozaril patient recently died "in spite of proper monitoring"; however, the ad notes, the man was taking "other powerful medications" concomitantly. Sandoz added that the death "highlights the need to treat Clozaril with particular caution." The ad lamented that the lawsuits were filed against Sandoz "three weeks after we had announced our commitment to" permit other parties to distribute clozapine if, like Caremark-Roche, they can assure that patient blood monitoring will be conducted weekly.
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