Sanofi Lawsuit Delays OTC Nasacort Generic Competition

Sanofi says with Nasacort Allergy 24HR available at retailers nationwide and online, the firm withdrew its litigation against FDA, which appears to have slowed development of private-label equivalents.

A lawsuit from Sanofi that kept the labeling of its OTC switch Nasacort Allergy 24HR under wraps between approval and launch could be a model for delaying private-label competition.

Sanofi announced on Feb. 4 that Nasacort Allergy 24HR (triamcinolone nasal spray), approved as an OTC in October 2013 and marketed through its U.S. consumer health care subsidiary Chattem Inc., is available at retailers nationwide and online.

Although Nasacort Allergy 24HR is a first-in-class switch, FDA did not grant Sanofi marketing exclusivity because the new drug application for the switch did not require clinical trials – the criteria for three-year exclusivity under the Hatch-Waxman Act.

Nasacort Allergy 24HR in a 120-dose container

Labeling submitted to FDA

After FDA denied Sanofi’s request to delay publishing the label and said the document would be posted on the agency’s website on Nov. 12, the French firm filed suit to block disclosure of labeling prior to the product’s launch, citing “competitive harm” (Also see "Sanofi Sues FDA To Stop Publication Of Nasacort Labeling Before Launch" - Pink Sheet, 11 Nov, 2013.).

A Sanofi spokeswoman said Feb. 4 that the firm and the Department of Justice filed a joint motion to dismiss the complaint Sanofi filed in November in the U.S. District Court for the District of Columbia to block FDA from publishing the label for Nasacort 24HR. With Nasacort 24HR available, “there is no need for Sanofi to pursue the litigation further,” she said in an email.

Although it did not proceed to a trial nor prompt a ruling, Sanofi’s complaint could provide a template for other firms attempting to carve out a period of de facto market exclusivity by preventing FDA from publishing a label.

FDA said the agency “agreed not to release the records during the pendency of the litigation,” but declined to comment on additional questions about the lawsuit, including the potential for similar litigation by firms marketing branded OTCs that want to block or slow the introduction of private-label equivalents.

“New Tool” In Switch Launches?

Food and drug attorney Kurt Karst, who noted Sanofi’s lawsuit in a November blog post, said he is not aware of any drug firm previously filing litigation to block FDA’s publication of an OTC switch label before the product launched.

“It’s potentially a new tool in the lifecycle management toolbox,” said Karst, a partner at Hyman, Phelps & McNamara in Washington, D.C.

Sanofi may have seen a cautionary tale in Johnson & Johnson’s 2008 experience with the OTC switch of subsidiary McNeil Consumer Healthcare’s Zyrtec (cetirizine) allergy product, which was beaten to the market by Perrigo Co. PLC’s private label equivalent (Also see "Perrigo Fuels “Growth Engine” With Spending On New Product Pipeline" - Pink Sheet, 11 Feb, 2008.).

“It’s certainly a tool that can be used when you have a next-generation type product, whether that’s in an OTC switch case or some other type of case where you’re going to be marketing that new-generation product,” Karst said.

As with Sanofi’s Nasacort launch, a firm could be concerned that generics will beat a branded product to market, he added. “You’ve got approval and you want to be careful about generic drug sponsors being able to quickly submit applications to the agency for it.”

Without official market exclusivity, the product will face generic competition as soon as FDA approves a private label firm’s abbreviated NDAs and they manufacture enough product to support a launch.

However, progress on preparing ANDAs for generic OTC triamcinolone sprays likely was slowed without access to Sanofi’s Nasacort 24HR label. If the product label was available prior to Nasacort 24HR’s launch, private labelers potentially could have beaten the brand to market or launched soon after.

If a private labeler is only now able to file an ANDA, it might not receive FDA approval in time to launch a product before 2015.

During the course of the lawsuit, FDA filed a response to Sanofi Jan. 9 denying the allegations that the firm would suffer “substantial competitive harm” if the agency published the label. However, FDA did not publish the label until the day the product was available at retail.

Despite moving to withdraw the complaint, Sanofi maintains the allegation at the heart of its argument: “Prior to launch of this product, disclosure of our packaging and label would allow a competitor to obtain more information and details of the planned OTC product prior to its availability, putting us at a competitive disadvantage.”

According to FDA, Nasacort 24HR is the only OTC triamcinolone product approved for sale in the U.S.

Perrigo has acquired a global license to market OTC triamcinolone from Teva Pharmaceutical Industries Ltd. While neither firm responded to requests for comment about expectations for launching an OTC triamcinolone spray, Perrigo executives said the product is not part of its sales forecasts for the remainder of its fiscal 2014, which ends June 30.

Dual Relief In A Crowded Market

Sanofi declined to project first-year sales for the product, but said “over time, Nasacort Allergy 24HR has the potential to capture significant market share in the OTC allergy category. It will fill an unmet need in the current OTC allergy market.”

The spokeswoman said the firm will support the launch with “a robust plan” including advertising, a website and a social media presence on Facebook. Discount coupons are available on the product’s website.

Nasacort 24HR enters the crowded allergy category with the distinction of promising dual relief from allergy and congestion as an OTC. Most competitors offering both are sold behind the counter because they also contain pseudoephedrine.

McNeil Consumer Healthcare’s Zyrtec (cetirizine HCI), Merck & Co. Inc.’s Claritin (loratadine) and Sanofi/Chattem’s Allegra Allergy (fexofenadine) are available OTC but are indicated only for allergy relief and not decongestion. Allegra D, Zyrtec D and Claritin D all offer nonprescription allergy relief and decongestion, but because they combine their unique active ingredients with PSE they are relegated to behind-the-counter sale.

But the brand still must overcome potential barriers that could hamper sales, such as consumer preference for pills over sprays, weaker brand awareness than competitors and less loyalty among Rx allergy spray users (Also see "Nasacort OTC Dual Allergy/Decongestion Relief Could Be Marketing Edge" - Pink Sheet, 24 Oct, 2013.).

Products like McNeil’s Sudafed PE Sinus and Allergy, which also makes allergy and decongestion claims, can be sold OTC because they replace PSE with phenylephrine, a decongestant contested by some as less effective than PSE and other decongestants.

According to Kline & Co. research, the OTC allergy category in 2007 was worth $865 million at the manufacturer level, and with the addition of Zyrtec in 2008 and Allegra in 2011 the category almost doubled to $1.6 billion. From 2011 to 2012 alone, OTC allergy sales climbed 7.5% from $1.47 billion to $1.58 billion, which far outpaced most other OTC categories that typically grow 1% to 3% a year. Sales in Allegra’s first year OTC in 2011 were $288 million and in Zyrtec’s first year in 2008 were $406 million.

Sanofi said the average retail price for a 60-metered-dose container of Nasacort 24HR is $13.99, and $19.99 for the 120-dose spray.

In comparison, Zyrtec in 25-count liquid gels and 30-count tablets is available online at $19.99; Allegra Allergy in 5-, 45- and 70-count tablets is priced between $6.99 and $39.99; and Claritin prices extend from $9.99 to $39.99 for 10-, 30- and 70-count tablets or tabs.

Sanofi executives did not discuss the Nasacort litigation during the firm’s 2013 fourth-quarter earnings call on Feb. 6. But CEO Chris Viehbacher said the switch approval is among the innovations “going on in our portfolios” and the product’s launch is one reason “we’re looking forward to a much better year in 2014.”

Sales of Allegra Allergy, also marketed by Chattem, were down 8.7% to $54.2 million (€40 million under same-day exchange rates) for the October-December period but grew 7.4% to $357.6 million for the full year, according to the firm’s earnings release.

Overall consumer health care sales were up 6.1% for the quarter to $978 million and 5.2% for the year to $4.07 billion. Sanofi noted that the September U.S. re-launch of the Rolaids brand, which the firm acquired in January 2013 from Johnson & Johnson, helped drive OTC sales late in the year (Also see "Chattem To Revive Rolaids Line Bought From J&J" - Pink Sheet, 14 Jan, 2013.).

Sanofi’s overall sales for the quarter rose 6.5% to $11.5 billion, but were flat – down 0.5% – for the full year at $44.6 billion, according to the firm, which forecast earnings per share for 2014 to be 4% to 7% higher than its 2013 EPS of $6.84.

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