Sanofi Under Fire by Senate Panel Over Competition Delaying Tactics

| About: Sanofi (SNY)

By Michael Fitzhugh

Sanofi (NYSE:SNY) contributed more than $5 million to two medical groups and a researcher as part of a coordinated campaign to delay the approval of generic alternatives to Lovenox, the company's blockbuster blood-thinner, a U.S. Senate Finance Committee investigation has found.

The company was trying to head off competitive threats to Lovenox, once its second-best selling product. The company lost its patent on Lovenox in 2009, but sued in federal court to block U.S. Food and Drug Administration approval of a generic alternative to the drug created by Momenta Pharmaceuticals (NASDAQ:MNTA). The suit failed to protect the injectable drug and Momenta's generic version became available in July 2010, followed shortly thereafter by a version made by Sandoz. That substantially slimmed Sanofi's revenue from the drug in Western markets, where it once made the bulk of its profits on the medicine.

"Generic drugs help keep healthcare costs down and we absolutely cannot let powerful drug companies keep those life-saving drugs out of reach," says Senate Finance Committee Chairman Max Baucus, D-Montana. "This report uncovers evidence that paying off doctors to lobby the FDA against generics was a drug company strategy – and that's wholly unacceptable. The FDA needs to work closely with doctors, so we must ensure that doctors' sole motivation is the well-being of their patients.

Parallel to its legal strategy, Sanofi encouraged doctors and medical associations to contact the FDA and express concerns about generic forms of Lovenox, according Sanofi internal documents obtained by investigators.

Pharmaceutical company outreach is common, but Sanofi's financial contributions and other actions raised red flags for The Wall Street Journal, which brought the payments to light in June 2010. Tipped by the article, investigators sought and obtained documents showing that Sanofi donated two million dollars each to the Society of Hospital Medicine and the North American Thrombosis Forum, then later encouraged them to take advantage of the FDA's citizen petition process to express concerns about generic alternatives to Lovenox. The company also gave a Duke University medical professor, Victor Tapson, more than $200,000.

The strategy took advantage of the FDA's citizen petition process, which allows individuals and experts to raise concerns about the alternatives. While the process is intended as a channel for gathering public input into important agency decisions, investigators sought more information out of concern over perceived misuse or abuse of process, according to the report.

"If the FDA isn't asking for disclosure of financial relationships, it's operating from an uninformed standpoint," says Senator Charles Grassley, R-Iowa. "The FDA has a responsibility to conduct due diligence in this area in order to make sure its reviews have credibility."