Drugs on the Market

Late in 1958, detectives working for American Cyanamid's Lederle Laboratories Division began to shadow Dr. Sidney M. Fox, 41, a chemist who worked at the Pearl River, N.Y., plant where Lederle develops the ultrasecret cultures for its new drugs. The detectives observed that Fox regularly invented excuses to remain in the lab after working hours and that he made frequent visits to Biorganic Laboratories, an East Paterson, N.J., company run by Chemist Nathan Sharff. All this struck Cyanamid as highly suspicious, but the detectives found no concrete evidence that Fox was filching drug formulas.

It was two years later--months after Fox had quit his Cyanamid job--that a tip came from Italy that industrial spies were hawking stolen U.S. drug formulas to Italian pharmaceutical houses. For Cyanamid this was bad news indeed: since Italy, alone among Western nations, has no law protecting drug patents. Italian manufacturers are free to copy any drug whose formula they can lay hands on.

The Big Buyer. Early this year, Cyanamid finally brought suit against Fox and Sharff for $5,000,000 apiece, charging that the two chemists had delivered to at least six Italian companies formulas and cultures for three Cyanamid-developed antibiotics and one antiarthritic steroid. Cyanamid estimates that the Italian firms--all of which hotly echo Fox and Sharff in denying any formula pirating--last year sold $25 million worth of drugs based on Cyanamid processes. Ironically, two major customers for the controversial drugs were the bargain-minded U.S. Defense Department and Veterans Administration, which together during the past two years bought $3,500,000 worth of two Italian-made antibiotics--which Cyanamid claims are its Achromycin and Aureomycin.

Last week, arriving in Sicily to inaugurate a big chemical and pharmaceutical complex newly built by his company's Italian subsidiary, Cyanamid President Kenneth Klipstein bluntly urged the Italian government to give reputable drug manufacturers prompt legal protection against "irresponsible firms." Klipstein may yet get his wish--at least in part. Along with foreign drugmakers. the big Italian pharmaceutical houses have grown fed up with the pirating of formulas by small competitors. "It's about time Italian manufacturers got some patent protection," roars Franco Palma, the president of Squibb's Italian affiliate. "We put millions into developing new products, and someone comes along and turns out the same thing without spending a cent on research."

Half a Loaf. The big drug companies have found an ally in Italy's Minister of Industry and Commerce Emilio Colombo. 42, who has had a bill drawn up that would provide full patent protection for chemical processes in Italy. But under the leadership of Deputy Antonio Cremisini, a Milan drugmaker whose own firm, I.B.I., is among those accused by Cyanamid of pirating its processes, the small Italian companies are putting up an effective political fight to write into the bill an amendment that would guarantee them the right to produce under license any new drug developed by the big companies. Hoping to get the bill passed by early next year, the big drug companies are expected to accept obligatory licensing on the assumption that some protection is better than none at all.

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