How business, doctors and journalists prey on your food anxieties I
How business, doctors and journalists prey on your food anxieties I
How business, doctors and journalists prey on your food anxieties I
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
Mylan Laboratories<br />
Making tablets in<br />
Mcrgantown . W .Va .<br />
Seventy-nine<br />
pills, three<br />
processes .<br />
nance it has . In its last fiscal year,<br />
which ended Mar. 31, Mylan posted<br />
net earnings of $121 milli<strong>on</strong> <strong>on</strong> just<br />
S396 milli<strong>on</strong> in revenues . That figure<br />
is puny next to Merck's $15 billi<strong>on</strong> .<br />
But if you count prescripti<strong>on</strong>s dispensed,<br />
Mylan is sec<strong>on</strong>d <strong>on</strong>ly to<br />
American Home Products .<br />
Mvlan's nominal headquarters is in<br />
Pittsburgh, but you'Il find Puskar's<br />
custom-built c<strong>on</strong>vertible parked outside<br />
tI3eMorgantowil, W.Va . manufacturing<br />
plant . This is where he<br />
hangs out, in simple digs . Here is the<br />
key to Mylan's huge profitability<str<strong>on</strong>g>and</str<strong>on</strong>g><br />
to the inability of his big, highcost<br />
competitors to compete against<br />
him . "The key to our success is that<br />
we d<strong>on</strong>'t waste m<strong>on</strong>ev ." savs Puskar .<br />
MYlan uses just three manufacturing<br />
processes for a1179 of its products .<br />
That holds costs down <str<strong>on</strong>g>and</str<strong>on</strong>g> enables<br />
the company to meet any order wi thin<br />
five davs .<br />
In the generics <str<strong>on</strong>g>business</str<strong>on</strong>g>, being the<br />
first to market is a big deal . The first<br />
generic to steal <str<strong>on</strong>g>business</str<strong>on</strong>g> from a br<str<strong>on</strong>g>and</str<strong>on</strong>g>ed<br />
drug as the latter's patent expires is<br />
usually introduced at 70% of the price<br />
of the br<str<strong>on</strong>g>and</str<strong>on</strong>g> . Later, as many as 12<br />
generics will evenntallv enter the mar<br />
ket, driving the price down each time<br />
until it settles at as little as 10% of the<br />
br<str<strong>on</strong>g>and</str<strong>on</strong>g> price . The first comer reaps<br />
huge profits at 70% of the old price ;<br />
the latecomers get meager crumbs .<br />
In 1994 four of Mylan's six generic<br />
introducti<strong>on</strong>s were first to market .<br />
One of those firsts was ulcer drug<br />
cimeridine, known to customers of<br />
inventor SmithRline Beecham under<br />
92<br />
the name Tagamet . Mylan began selling<br />
cimetidine the ten, day Tagamet's<br />
patent expired in Maa . But it re~-ved<br />
up for the introducti<strong>on</strong> five vears earlier<br />
. "We plan wav ahead," savs Puskar<br />
. "If you rush, rhings will end up<br />
costing you more ."<br />
There was <strong>on</strong>ly <strong>on</strong>e supplier of<br />
cimeddine in the world, a Hungarian<br />
company, Lek . Even before it got<br />
Food & Drug Administrati<strong>on</strong> approeal<br />
for cimetidine, .biylan c<strong>on</strong>tracted<br />
with Lek to purchase most of<br />
its cimetidine supplv . When Du P<strong>on</strong>t-<br />
Merck <str<strong>on</strong>g>and</str<strong>on</strong>g> Teaa Pharmaccutical Industries<br />
tried to compete, they<br />
couldn't get enough cimetidine . BV<br />
May of 1995, Mylan was l<str<strong>on</strong>g>and</str<strong>on</strong>g>ing 39".%<br />
of new cimetidine prescripti<strong>on</strong>s, with<br />
Tagamet itself down to 14%, according<br />
to market researcher axts America .<br />
The generic drug industny has always<br />
struggled with image problems,<br />
whether deserved or nor . Lawsuits<br />
pendingagain .st Copley Pharmaceutical<br />
blame the company-perhaps<br />
wr<strong>on</strong>gly-for as manp as 100 deaths<br />
from a generic versi<strong>on</strong> of the astlvna<br />
drug albuterol . In 1989 a bribety<br />
sc<str<strong>on</strong>g>and</str<strong>on</strong>g>al erupted at the generic drug<br />
divisi<strong>on</strong> of the FDa .<br />
In this tarnished <str<strong>on</strong>g>business</str<strong>on</strong>g>, Puskar is<br />
shining clean . He was the whistleblosver<br />
in the briben' case . He is a<br />
manufacturing perfecti<strong>on</strong>ist . The<br />
company has neeer received a warning<br />
letter fiom the FDa . Mylan's reputati<strong>on</strong><br />
for high quality enables it to<br />
charge 5% to 10% more than competing<br />
discounters . Pharmacists say that<br />
they never find smashed pills at the<br />
bottom of a Mylan bottle .<br />
Mylan's quality reputati<strong>on</strong> <str<strong>on</strong>g>and</str<strong>on</strong>g><br />
broad product line attracted Eli Lilly<br />
when it began looking for a generic<br />
partner . "Our managed care customers<br />
want generics, but we recognized<br />
it was a very different <str<strong>on</strong>g>business</str<strong>on</strong>g> <str<strong>on</strong>g>and</str<strong>on</strong>g><br />
that we would probabl ' ~ not be very<br />
good at it," says Mitchell Daniels,<br />
p resident ofNorth Aune rican pharmaceutical<br />
operati<strong>on</strong>s at Lilly . _<br />
Lillv came to Puskar saith a deal<br />
that, in effect, has Lilly helping to<br />
undercut its avn sales . It now manufactures<br />
its antibiotic cefaclor <str<strong>on</strong>g>and</str<strong>on</strong>g><br />
painkiller propoxvphene for Mvlan to<br />
sell at lower prices under the Mvlan<br />
label while Lilly still sells the drugs as<br />
Ceclor <str<strong>on</strong>g>and</str<strong>on</strong>g> Darv<strong>on</strong> . Lilly's apparent<br />
reas<strong>on</strong>ing : Some<strong>on</strong>e is going to copycar<br />
these drugs, so it might as well be<br />
Mylan <str<strong>on</strong>g>and</str<strong>on</strong>g> we might as well capture at<br />
least a little of rhe manufacturing<br />
profit .<br />
Mranwhile, Puskar is inching into<br />
the br<str<strong>on</strong>g>and</str<strong>on</strong>g>ed drug market b% filling<br />
niches too small to interest the big<br />
drugmakers . He has licensed compounds<br />
that lie hopes to develop into<br />
patented drugs for migraine, rertigo<br />
<str<strong>on</strong>g>and</str<strong>on</strong>g> 'ourns . Mylan alreadv has two<br />
patented drugs <strong>on</strong> the market toda~ .<br />
One is hlaszide, an untih`pertensive<br />
drug developed as a knockoff. The<br />
pill's absorpti<strong>on</strong> bldte bodr so exceeded<br />
that of the b r<str<strong>on</strong>g>and</str<strong>on</strong>g>ed drug it was<br />
meant to imitate that Maxzide merited<br />
its ov, n patent .<br />
Now vou know vt-hy Milan Puskar<br />
wasn't worried about competing with<br />
Merck. 111111111<br />
c<br />
2046673350 F°rb 5 . .aug ust 11,1995<br />
http://legacy.library.ucsf.edu/tid/agf97d00/pdf