Roche Will Meet With Generic Drugmakers on Tamiflu (Update2)

Roche Holding AG agreed to meet with four generic drugmakers to
discuss rights for making Tamiflu pills, the treatment countries are
stockpiling for a feared worldwide outbreak of lethal avian flu.

Roche will consider licensing the drug to Teva Pharmaceutical
Industries Ltd., Barr Pharmaceuticals Inc., Mylan Laboratories Inc.
and Ranbaxy Laboratories Ltd., said U.S. Senators Charles Schumer, a
New York Democrat, and Lindsey Graham, a South Carolina Republican, in
a statement today.

George Abercrombie, chief executive of Roche's North American
operations, met with Schumer and Graham at the U.S. Capitol today to
discuss the agreement. Schumer earlier this week urged Roche to
license the drug to generic producers and said he would introduce
legislation to mandate cooperation if the company didn't act
voluntarily.

``Roche is doing the right thing, and at the same time, they're going
to make a little money,'' Schumer told reporters at a press conference
at the U.S. Capitol. ``The purpose isn't to break the patent. It's to
meet an emergency need.''

The strain of influenza that is causing concern, H5N1, erupted in
Southeast Asia, where more than 140 million birds have died or been
destroyed. About 120 people have been infected through birds,
resulting in 60 deaths, according to the World Health Organization, a
branch of United Nations.

A moderate to severe outbreak in the U.S. may kill as many as 500,000
Americans and sicken 2 million, according to the Trust for America's
Health, a nonprofit public health advocacy group in Washington.

`Interest in Participating'

Roche sells Tamiflu under a 1996 licensing agreement with Foster City,
California-based Gilead Sciences Inc., which invented the drug. Roche
will assess the ability of other manufacturers to either produce or
help with Tamiflu production, the company said in an e-mailed
statement today.

``We want to be sure that they can produce substantial amounts of
Tamiflu for pandemic use in a timely manner in accordance with
appropriate quality specifications, safety and regulatory
guidelines,'' the statement said.

Barr hasn't yet set up a meeting with Roche, said Carol Cox, a
spokeswoman, for the Woodcliff Lake, New Jersey, company.

``We've just shown an interest in participating,'' she said. ``We're
willing to help manufacture the product if Roche would choose to
license the product.''

Mylan

Mylan Chief Executive Robert Coury told CNBC he expected Roche to
contact his company soon. Mylan has a current capacity to make 18
billion tablets and capsules, he told the network.

Ranbaxy spokesman Charles Caprariello and Teva spokesman Kevin Mannix
didn't immediately return telephone calls and emails seeking comment.
Mylan is based in Canonsburg, Pennsylvania. Teva is based in Petah
Tikva, Israel, and Ranbaxy in Gurgaon, India.

Roche approached Schumer after he called on the company to license
Tamiflu, and asked him to find companies that would be willing to make
the drug, Schumer said. The senator called the generic companies, who
estimated that they could begin making the drug within a month as long
as Roche provided raw materials and details of the manufacturing
process. Without that cooperation, it would take the generic companies
three months to make Tamiflu, Schumer said.

Under the terms of today's agreement, Roche will begin meeting with
generic companies as early as next week, in consultation with U.S.
health officials, who may recommend additional manufacturers. Roche
also consented to license the production of Tamiflu to any company
that can produce it in quantities large enough to help meet demand in
case of a flu outbreak. Roche will offer ``equitable terms'' on
licensing.

`No Guarantee'

``There's no guarantee that they'll reach an agreement, but the odds
are very high,'' Schumer said. Schumer expects Roche to work with the
generic companies until the manufacturing ``bottleneck'' is relieved.

Roche's Abercrombie met today with Health and Human Services Secretary
Michael Leavitt and other HHS officials to discuss flu preparedness,
Roche spokesman Terry Hurley said. HHS spokeswoman Christina Pearson
said she didn't have an immediate comment on the meeting.

The Bush administration plans to stockpile as many as 20 million doses
of Tamiflu and has 2.3 million doses already, U.S. officials told
reporters Oct. 7 in a briefing. The Tamiflu the U.S. has now would be
enough to protect only 1 percent of population, Schumer said Oct. 18.

Culling Poultry

The World Health Organization has recommended that Tamiflu be
available for the treatment of suspected infections in farm workers
involved in the mass culling of poultry. Tamiflu sales have jumped as
countries including the U.S., the U.K. and Japan placed orders of more
than $1.4 billion to fight bird flu.

The U.S. is catching up with countries that leapt into the Tamiflu
market earlier. Italy, with a population of 58 million, has ordered 2
million doses, almost as much as the U.S. New Zealand's government has
ordered 800,000 doses, enough for 20 percent of its population.

More than 12 sites are now making the medicine after Basel,
Switzerland-based Roche won U.S. Food and Drug Administration approval
of a new facility.

Roche's agreement mirrors one that German drugmaker Bayer AG made in
2001 under pressure from U.S. officials to lower the price of its
Cipro antibiotic for treating anthrax. Tommy Thompson, then the U.S.
Health and Human Services secretary, threatened to override Bayer's
patent after anthrax spread through the U.S. mail and infected 11
people. A day later, Bayer agreed to cut its Cipro price roughly in
half. Ultimately, five Americans died of anthrax in 2001 and hundreds
more were exposed to the bacteria.

``Roche is exhibiting good corporate citizenry at this point,''
Thompson said in an interview today. ``If in fact there's an epidemic
of avian flu, we do not have a vaccine. The only thing out there
that's known to do anything to protect people is Tamiflu. Roche can't
ramp up fast enough.''

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