New Contract Dispute Delays U.S. RU 486 Marketing

For the second time in ten months, a legal fight among the companies controlling the U.S. distribution of the RU 486 abortion pill (also known by its generic name: "mifepristone") could significantly delay marketing in this country. On June 11, 1997, the holder of the U.S. license, the New York City-based Population Council, disclosed that its sublicensee, a company named Advances/Danco, had filed a lawsuit on May 9, 1997 for breach of contract against the prospective manufacturer of RU 486, a leading Hungarian drug company named Gedeon Richter. (Advances was formerly known as Advances for Choice; and Danco was Danco Laboratories.)

The lawsuit filed in New York State Supreme Court (a trial-level court) alleges that on February 28 Gedeon Richter unilaterally withdrew from its contract to produce bulk quantities of RU 486 after receiving $500,000. A separate company whose name has not been disclosed would be used to put the bulk RU 486 into tablet form. No reason was given for Gedeon Richter’s withdrawal. (See story page 4 profiling Gedeon Richter, one of the largest pharmaceutical firms in Hungary.)

Advances/Danco’s lawsuit seeks to compel Gedeon Richter to fulfill the contract and contends that unless this occurs, U.S. introduction of RU 486 could be set back months—or even years. Without Gedeon Richter, the Population Council and Advances/Danco anticipate serious problems finding a new manufacturer and getting final approval for marketing from the U.S. Food and Drug Administration (FDA).

The most important short-term effects of this latest legal dispute are two-fold. First, U.S. marketing will be delayed several months and at least into early 1998. And second, the Population Council disclosed for the first time the name of the prospective manufacturer of RU 486 for the U.S. market. (For details about the operation and dangers of the RU 486/prostaglandin (RU 486/PG) abortion technique, see the end of this story.)

Meanwhile, in a show of support, another pro-abortion organization, Abortion Rights Mobilization (ARM), which was already testing a "Chinese clone" of RU 486 on 1,000 women in the U.S., announced it would use a foundation grant to offer the abortion pill to 10,000 women nationwide. ARM has a U.S. manufacturer for its version of RU 486, but no legal rights to market the drug in the U.S.

Unfortunately, the ARM and the Population Council are talking. The July 2 New York Times reported that the Council and ARM "have had preliminary discussions about whether Abortion Rights Mobilization’s manufacturer would be capable of full-scale production." (See story on page 3.)

RU 486 No Longer on Fast Track

Less than a year ago, press reports indicated that the U.S. marketing of RU 486/PG was both imminent and inevitable. On July 19, 1996, a FDA advisory committee stacked with abortion advocates voted to recommend approval of the abortion technique. On September 18, 1996, the FDA issued an "approvable letter" stating that the RU 486/PG abortion technique was safe and effective. The agency asked for additional information, but the details of the request were not made public. At that time, officials of the Population Council were optimistic about quickly fulfilling all of the requirements and projected that the RU 486/Cytotec prostaglandin (RU 486/PG) abortion technique would be on the market by June 1997. (See August, 1996 and October 1996 RU 486 Reports.)

But the project received a major setback when a protracted dispute from November 1996 through February 1997 over control of the sublicense for manufacturing and marketing dropped the projected marketing date back six months to December 1997. (See February-March, 1997 RU 486 Report.)

Delay In Finding A New Manufacturer

This new contract dispute and lawsuit threaten to delay introduction even further in two ways:

First, the Population Council and Advances/Danco might have to find a new manufacturer, which may be very difficult. According to the June 16 FDC Reports, a drug trade newsletter, Advances/Danco asserted in the lawsuit that it "has diligently looked, but has been unable to find another manufacturer capable of producing the identical bulk drug utilizing" the process used by the French manufacturer of RU 486, Roussel Uclaf. The article also explained that "[d]ue to the politically sensitive nature of the approval and marketing of abortion drugs in the U.S., Danco has ‘experienced, and expects to continue to experience, difficulties finding any substitute manufacturer.’"

But the spokeswoman for the Population Council, Sandra Waldman, explained in the June 13 New York Times, that the "three to five years" projected delay was a "worst-case possibility" and not "the most likely pathway." Indeed, "if the council could persuade the company to continue production, the delays would be minor," she said in the Times.. "Although unable to estimate when the drug would reach the market, Ms. Waldman said the December [1997] deadline was no longer realistic," reported the Times. "The amount of time it will take to bring this product to the U.S. market will depend on how smoothly and quickly a new company is able to pick up the production process if our negotiations are not successful," she said in the story. Press reports indicate that the Population Council and Advances/Neogen are actively looking for substitute manufacturers.

One of the more interesting new facts to emerge from press reports was that the "[m]anufacturing delays could jeopardize Danco's RU-486 U.S. patent rights, which expire Jan. 8, 2002," stated FDC Reports. In addition, the lawsuit asserted that "substantial damages" could include "losses of sales and marketing opportunities potentially well in excess of $200 million," quoted the article. Apparently, if marketing is delayed too much, Advances/Danco will not be able to make enough profit before the patent expires.

FDA Scrutiny of Manufacturer

Even if the Population Council and Advances/Danco can find a new manufacturer, they still face additional delays obtaining FDA approval of that company’s production process for RU 486, which is a prerequisite for U.S. marketing. Press reports about the May 1997 lawsuit provided some information for the first time about the additional administrative requirements that the Population Council must meet to obtain FDA approval for U.S. marketing. Apparently verifying the safety and consistency of the manufacturing process is the crucial issue.

The June 13, 1997 New York Times reported that Gedeon Richter agreed to manufacture RU 486 for the Population Council in September 1995, which is about the time that the Council’s U.S. test on 2,100 women ended. Seven months later, on March 14, 1996, the Council filed a New Drug Application (NDA) with the FDA for permission to market RU 486 in the U.S. and told the press that the name of the actual manufacturer of RU 486 would be kept secret. According to the Advances/Danco lawsuit, as quoted in the FDC Reports, the NDA listed the French drug company Roussel Uclaf as the "stand-in substance manufacturer" for Gideon Richter after the Hungarian company provided the Council with the results of tests on four pilot batches.

The lawsuit also said that the FDA’s "approvable" letter on September 18, 1996 stated that the agency "would accept the clinical data furnished by Roussel-Uclaf. . .and merely require Gedeon Richter to demonstrate. . .the comparability of its manufacturing processes, and the bulk drug substances it produces" to those of Roussel Uclaf.

On January 18, 1997, Gedeon Richter told the Population Council that the test samples of RU 486 were ready for submission, said the lawsuit. But the company withdrew from the manufacturing agreement on February 28 before shipping the trial batches needed for FDA approval, noted the lawsuit.

Advances/Danco contend in their court document that "[I]f Gedeon Richter conducted itself in accordance with its obligations under the agreements, and based on Gedeon Richter's own representations, it is believed that Gedeon Richter still has the capability to furnish all necessary information to obtain approval of the NDA and manufacture mifepristone for sale in the U.S. market within a target date of December 1997," said FDA Reports.

Permitting Gedeon Richter to withdraw from the contract would have grave consequences, asserted the abortion advocates. In the lawsuit Advances/Danco contends that substituting another manufacturer "would delay by three to five years the process of obtaining final FDA approval to market" RU 486, quoted FDC Reports.

Action Needed:

Naturally, pro-life and pro-family advocates should be heartened by these developments since RU 486/PG will not be on the market as soon as originally thought. However, we should not be complacent. There is still need for action:

• Write Gedeon Richter company officials to urge them to stay out of the abortion business. Address: Lajos Pillich, Chairman, Gedeon Richter, 19-21 Gyomroi Ut, Budapest H 1103, Hungary.

• Boycott the products of Hoechst Marion Roussel drug company products, especially the antihistamine Allegra. This company and its parent control the use of RU 486 worldwide. The boycott is aimed at pressuring them to withdraw the abortion drug from the market.

• Inform others about the dangers of RU 486/PG abortion.

The dangerous "RU 486" abortion method which kills an unborn baby whose heart has started to beat actually uses two drugs: First, the powerful synthetic steroid RU 486 (generic name "mifepristone") starves the unborn baby to death by causing the lining of the uterus to disintegrate. Second, another powerful synthetic hormone, a prostaglandin known as Cytotec (generic name: "misoprostol"), causes contractions of the womb which expel the dead baby and bloody contents.

Some key facts form the "core message" that pro-life and pro-family advocates need to keep repeating at every opportunity. Contrary to what the general media has usually been saying, the RU 486/PG abortion technique

• is not a "contraceptive" because it causes an abortion by killing an unborn baby whose heart has started to beat; • is not "safe" and "easy;" • will injure, and possibly kill, women; • will possibly deform babies who survive; • is being rushed on to the market by President Clinton to appease the abortion lobby; and • will increase the number of abortions beyond the already appalling 1.5 million per year.

U.S. Testing of "Chinese" RU 486 "Clone"

Two weeks after the press reports that the Population Council’s introduction of RU 486/PG abortions into the U.S. would be further delayed, another pro-abortion organization announced on July 2, 1997 that it would expand its U.S. trial of a "Chinese clone" of RU 486 that is allegedly chemically identical. The New York City-based organization known as Abortion Rights Mobilization (ARM) and headed by long-time radical abortion activist Lawrence Lader has been testing its version of RU 486 for about a year. On October 15, 1996, ARM announced that the eventual goal was experimenting on 2,000 women at facilities located in Rochester, NY; San Francisco; Seattle; New York City; Bellevue, NE; and Kallispell, MT. According to press reports, the woman must pay the doctor’s fees of about $350 to $400, but the RU 486 is free. ARM is producing the RU 486 in two secret locations in the United States, Lader explained in an October 15, 1996 Business Wire story. The protocol for ARM’s test differs significantly from the Population Council and French methods in the use of the second drug, the prostaglandin Cytotec (generic name: "misoprostol"). Instead of administering the Cytotec orally at the abortion facility, the woman takes it at home vaginally, reported the Business Wire story. Also women are administered a second dose of Cytotec if they do not have a complete abortion, said an October 19, 1996 Associated Press story. ARM’s test apparently does not violate the Population Council’s U.S. patent rights to RU 486, but ARM cannot legally sell RU 486 in the U.S. without the Council’s permission. Lader has told the press that ARM’s effort is aimed at spurring on the Council’s efforts, and not on marketing RU 486. A February 17, 1997 New York Observer article noted that "Mr. Lader’s work has apparently rankled the Population Council." In 1994, he "offered the organization his research and the services of his lab, but said that he was rebuffed. ‘They didn’t seem interested, to put it mildly,’" he told the Observer. "We already have the United States rights, and the know-how. All Lader can do with his clone is conduct a limited clinical trial," replied an annoyed-sounding Ms. [Sandra] Waldman," a spokesperson for the Population Council, reported the Observer.

With new financing from the John Merck Fund, ARM now plans to expand the test to 10,000 women "as a stopgap measure until the drug can be distributed nationally," reported a July 2 Associated Press story. As of that date, the group has already tested RU 486 on 1,000 women and plans to expand to additional sites in New York, Texas, Maryland, and Florida, said the report.

To put ARM’s test in perspective, the deaths of many more unborn babies and the threats to the lives and health of their mothers is of course of consequence. But in the larger picture, ARM’s trial remains of secondary importance to the much greater threat from the Population Council’s effort aimed at getting RU 486 on the market permanently. Abortion advocates expect that RU 486/PG could be used to abort over 500,000 women a year, which will only happen with formal FDA approval and a regular manufacturer. Lader and ARM have a working U.S. manufacturer but no patent rights. The Population Council and its company Advances/Neogen have the patent rights and tenative approval from the FDA, but no FDA-approved manufacturer. Unfortunately, the two parties are talking. The July 2 New York Times reported that the Council and ARM "have had preliminary discussions about whether Abortion Rights Mobilization’s manufacturer would be capable of full-scale production."

If the two organizations reach an agreement, ARM’s manufacturer would still have to show that its version of RU 486—which was received through the back channel of the People’s Republic of China—is equivalent to the French chemical, and that its production procedures meet FDA standards. In any case, we can expect some delay in the nationwide marketing of RU 486/PG.

A Profile of the Gedeon Richter drug company

HQ: Budapest, Hungary

Size: Largest pharmaceutical company in Hungary

Management: Undergone streamlining process in recent years.

Ownership: 75% public stock, 25% government

Employees: 4,600

Products: 100 products but only 12 dominant.

Growing bulk generic export to the West. Has 10% of world-wide bulk contraceptives market in volume terms, but only 1% in value terms.

Sells bulk cimetidine to U.S. companies which repackage it

Annual Gross Sales:

$250 million (US) (1996)

33% of income from domestic (1995)

27% of income from former Soviet Union nations (1995)

14% of income from Eastern Europe (1995)

26% of income from rest of world (1995)

Markets: Produced 10% of all Russian drug imports (1996)

9.9% of domestic Hungarian drug market (1996)

Sources:T. Chadwick, Company report, Merrill Lynch Capital Markets (Feb. 19, 1997); "Hungary sells equity in MOL and Gedeon," ECN-European Chemical News (Apr. 21, 1997), p. 5; K. Kovacs, Company report, NATWEST Securities LTD (Feb. 13, 1997); P. Zaniboni, Company report, Schroeder Securities UK LTD (Sept. 10, 1996); Kinga Svastics, "Hungary’s Pharmaceutical Sector," Commercial Specialist, American Embassy, Budapest (Jan. 1995).