Flu Drug Ignites Dispute

Demand For Tamiflu Outstripping Supply, Prompts Battle Over Profits

(AP)  In the first few years after federal regulators approved the influenza-fighting pill Tamiflu in 1999, the drug suffered from lackluster sales and indifference from U.S. health officials more focused on creating new vaccines.

Now, demand for Tamiflu is outstripping supply.

The drug's sales have skyrocketed in recent months as a major U.S. vaccine supplier failed to meet half the nation’s needs and the World Health Organization, worried about the threat of a worldwide bird flu epidemic, urges governments to stockpile anti-viral drugs.

That's touched off a nasty dispute between two drug companies that are fighting for control of the pill’s growing profits — even as U.S. health experts fret about inadequate Tamiflu stockpiles and Third World countries threaten to ignore U.S. patents and make generic versions of the drug.

Tamiflu prevents the typical flu strains that occur every year from replicating in humans once a person is infected, shortening the illness' duration by two days while rendering its symptoms less severe.

The drug has never been tested on people infected with the bird flu that has swept through poultry populations in large swaths of Asia since 2003, killing at least 63 people.

But Tamiflu has showed promise in mice infected with that exotic flu strain, which health officials fear could spread globally, with disastrous results. Officials thus want to stockpile Tamiflu while they work to develop a bird flu vaccine.

"It appears that this is the only effective intervention we have once someone has been infected. It's the one treatment," said Jeffrey Levi, a policy analyst for Washington D.C.-based nonprofit Trust for America's Health. "The problem is that we don't have enough of it."

Tamiflu was invented in 1996 by scientists at Foster City-based Gilead Sciences Inc., which quickly sold all commercial rights and manufacturing responsibility in exchange for annual royalties to the Swiss giant Roche Holding AG.

Roche makes Tamiflu at its Basel, Switzerland plant and until last year, this sole source for the drug wasn’t a public health issue.

Sales of the prescription drug limped along at about $76 million in 2001 and $134 million in 2002 and were so lackluster that Gilead complained about Roche’s commitment to the drug.

"It has been a historically tough sell in a traditional flu market," said Sharon Seiler, an analyst for Punk, Ziegel & Co. "You need a prescription, you need to take it within 48 hours of symptoms and not all pharmacies stocked it."

But when the WHO in January 2004 urged the world to stockpile Tamiflu, sales skyrocketed. For the first half of this year, sales surged to $456 million.

Roche has doubled its Tamiflu manufacturing capacity in each of the last two years and plans a similar expansion next year, including manufacturing Tamiflu in some of its U.S. factories.

Still, orders are coming in faster than Roche can immediately fill.

U.S. Department of Health and Human Services Secretary Michael Leavitt has called for a Tamiflu stockpile to treat 20 million Americans, yet there are only enough pills on hand to treat 2.3 million people.