Antitrust and intellectual property collide

WASHINGTON - Although the law provides patent holders with a monopoly, the right to exploit that dominance is not bulletproof, as demonstrated by the Federal Trade Commission's interest in Sepracor Inc.'s licensing deal with Eli Lilly and Co. for the next generation Prozac compound.

Under the December 1998 deal, Lilly obtained exclusive rights from SEPR to develop and globally commercialize R-fluoxetine, a single-isomer form of the active ingredient in Prozac, the blockbuster antidepressant which sold $2.8 billion in 1998. R-fluoxetine is in Phase I studies, while the key patents on Prozac expire in February 2001 and December 2003. In the meantime, like other single-isomer compounds, SEPR's patented R-fluoxentine may prove in the clinic to have an improved side effect profile over the racemic version of the drug. If physicians and patients are convinced that the version developed by SEPR is safer, and consequently shun generic versions of Prozac, Lilly could enjoy additional patent protection until 2015 under SEPR's method-of-use patent...