Court ruling means generic Prozac in 2001, two years early

NEW YORK - A cheaper generic form of the popular antidepressant drug Prozac could be available as early as next August, two years earlier than expected.

A federal appeals court on Wednesday overturned a lower court's ruling that said Eli Lilly and Co.'s patent protection on the drug was good through 2003. Lilly officials said they will appeal.

The ruling is a victory for generic drugmaker Barr Laboratories Inc., which has battled Lilly over its Prozac patent since 1996.

Barr officials said the ruling should clear the way for it to produce a generic form of Prozac by February. But Lilly is expected to apply for, and receive, a six-month extension by agreeing to test the drug in children, meaning the earliest Barr's generic version likely will be on the market is August 2001.

''We are very pleased with the decision,'' said Bruce L. Downey, Barr's chairman and chief executive.

He promised Barr's generic version of Prozac, fluoxetine, would be substantially cheaper than Prozac, but he wouldn't say by how much. Prozac costs about $2.63 a day.

Typically, generics are at least half the price of brand-name equivalents; that usually results in brand-name drugs losing about 80 percent of their sales within two years.

For Lilly, which counts on Prozac for about a quarter of its total sales, losing its patent protection is a blow. Shares of Indianapolis-based company fell $31.85 or 29 percent, to $76.68 Wednesday in trading on the New York Stock Exchange.

Barr stock rose $31.25, or 68 percent, to $77.

While sales of Prozac have been declining in the past year due to increased competition from drugs such as Zoloft and Paxil, the pill still had $2.61 billion in sales in 1999, about $2 billion of which was in the United States.

''While we're clearly disappointed with today's ruling and plan to appeal it, we nonetheless are thoroughly prepared to implement a comprehensive contingency plan,'' said Charles E. Golden, Lilly's executive vice president and chief financial officer.

That plan includes getting U.S. approval to launch a next generation Prozac pill and introducing the first-ever drug to treat sepsis, a deadly blood infection. Lilly also hopes to expand sales of several of its new drugs, including its antipsychotic drug Zyprexa and its diabetes drug Actos.

Prozac has lost market share in recent years to Pfizer's Zoloft and SmithKline's Paxil, and earlier this year, it lost its status as the top-selling antidepressant in the United States in terms of new prescriptions, falling behind both drugs.

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