Source: Prescription Access Litigation (PAL)

Cipro is a broad spectrum antibiotic approved to treat 17 different infections. It's been in the news lately because up until October 17th, it was the only antibiotic with FDA approval to specifically treat inhalation anthrax.

Bayer has marketed Cipro in the United States since receiving approval from the FDA in October of 1987. Cipro is the best selling antibiotic in the world and has maintained that position for eight consecutive years. In 1999 Cipro was the eleventh most prescribed drug in the United States based on new prescriptions and ranked twentieth in total United States sales. In 1999, Bayer's gross sales of Cipro in the United States was approximately $1.04 billion and its profits were in excess of $920 million.

The Prescription Access Litigation (PAL) joined existing litigation that was filed last year by consumers and third party payors seeking to clear the way for generic Cipro to come to market by ending the agreement between Bayer and the generic companies. The lawsuit alleges that in 1991, Barr Laboratories submitted an application to the Food and Drug Administration (FDA) to bring a generic version of Cipro (ciprofloxacin) to market. In that application, Barr contended that Bayer's patent on Cipro was invalid and unenforceable. Bayer responded to the FDA application by initiating a patent lawsuit against Barr in January of 1992. Barr responded to the lawsuit by seeking a declaration from the court that Bayer's patent was invalid and unenforceable.

In January of 1995, Barr received tentative FDA approval to manufacture and market generic Cipro pending resolution of the patent litigation. In January of 1997, Barr, Bayer and two other companies, Rugby, another generic manufacturer, entered into a collusive agreement that resulted in Bayer paying Barr and the other companies over $100 million. In exchange, the agreement requires Barr to recognize Bayer's patent for Cipro and not to manufacture or market the product until the patent expires. The agreement further stipulates that Bayer has the option of either paying Barr and the other companies each $25 million per year from March 1998 to December 2003 or of supplying Barr and HMR/Rugby with ciprofloxacin to market and distribute under a generic label. To date,

Bayer has elected to make the $25 million payments rather than grant Barr and HMR/Rugby a license to market and distribute a generic version of Cipro. The Federal Trade Commission is also investigating charges that Bayer "improperly" paid Barr $200 million to stop the firm from manufacturing a generic version of Cipro.