Bayer AG reached an "agreement in principle" with US officials on a price for Cipro, the most powerful drug available to treat anthrax.
Bayer President Helge Wehmeier issued a statement on the pact Tuesday night, a few hours after US Health and Human Services Secretary Tommy Thompson said he may ask Congress for authority to override Bayer's patent on Cipro to lower the price. A further announcement is due today, said Michael Diehl, a Bayer spokesman.
Legislators have questioned whether the German drugmaker can meet demand amid a growing number of cases of anthrax in the US following the Sept. 11 attacks on the World Trade Center and the Pentagon. Thompson said on Cable News Network last night that he offered to pay Bayer "under a dollar" for each pill. The government has been paying US$1.83 per tablet for Cipro.
Health Canada said last week it would override Bayer's patent in that country and purchase a generic copy of Cipro from closely held Apotex Inc for about US$0.95 a pill.
Bayer then said it was considering legal action, but on Tuesday Bayer withdrew the threat and said Canada will respect its Cipro patent. Bayer will supply 1 million Cipro tablets within 48 hours to Canada if needed, the company said in a faxed statement.
Thompson said Canada will pay US$1.30 per pill.
"We're going to buy it much cheaper than that," Thompson said. "We are under a dollar, I can assure you."
Thompson told a congressional subcommittee that Bayer could produce 200 million tablets for the US government within 90 days. He has asked Congress for US$643 million to buy more drugs for the National Pharmaceutical Stockpile, including enough Cipro to treat 12 million people for 60 days.
"It's the price that's in question," he said.
Demand for Cipro has surged as anthrax killed three people, including two Washington postal workers. At least 11 others have been infected in Florida, New Jersey, Washington and New York.
Cipro may be able to treat forms of anthrax infection that are resistant to other antibiotics, experts have said. That's why demand for the medicine has soared, even though older drugs such as penicillin also treat the disease.
In the US, some lawmakers have suggested US authorities should also order generic forms of Cipro. While US laws permit the government to override the Cipro patent in a national emergency, the company might tie that effort up in a court battle, patent lawyers said.
The US' Cipro order may boost Bayer earnings by as much as US$243 million, said Meng Si, an analyst at Bankgesellschaft Berlin who rates Bayer a "hold." Still, that will probably be a temporary boost and "it does not change the fundamental picture of the stock," she said.
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