nvestors' biggest worry about Celgene is that it might not have as much time as hoped to replace the revenue that Revlimid generates: Dr. Reddy's Laboratories (NYSE:RDY) is challenging Celgene's patents for Revlimid. Alles acknowledged that many of the company's shareholders would like to see a settlement reached soon. However, he was adamant about making sure any deal reached was a good one for Celgene. Alles stated that the company absolutely would not settle "out of expedience." At this point, Celgene and Dr. Reddy's are scheduled to go to trial in early 2019. Alles said that Celgene will defend its patents against all potential generic rivals "until conditions are acceptable to settle." He insisted that the biotech won't give up even one month of continued revenue from Revlimid if it doesn't have to do so. My hunch is that in large part Alles is signaling Dr. Reddy's that the best deal it's going to get is one similar to the settlement reached with Natco. I suspect that Celgene fully expects an acceptable agreement will be reached, but is more than willing to go to the mat in court if necessary.

Revlimid ranked as the second best-selling drug in the world last year, with sales of nearly $8.2 billion. Market research company EvaluatePharma predicts that the drug will slip one spot by 2024 but will rake in around $11.9 billion. Revlimid contributes 64% of total revenue for Celgene (NASDAQ:CELG). And yet the big biotech's CEO just said that he "wants to make Revlimid obsolete." Say what?

The market for complex therapies that train living cells to attack cancer is taking baby steps, but there's still a lot of enthusiasm for experimental drugs coming through the pipeline from bluebird bio (NASDAQ:BLUE) and it's big biotech partner Celgene (NASDAQ:CELG). That enthusiasm fell a notch after Amgen (NASDAQ:AMGN) released exciting data from a handful of patients that suggests it's found a much easier way to achieve the same goal. 

"If we're ever going to get medical costs under control in the U.S. we have got to stop this kind of anti-competitive practice."

making it nearly impossible for competitors to get their hands on adequate supplies of the medications to do comparison tests, according to lawsuits filed by generic manufacturers who have tried to obtain the drugs.

Before its exclusive rights to market the drug for multiple myeloma expired — and before a generic drugmaker could put a competitor on the market — the company tweaked Thalomid to turn it into Revlimid, which also treats multiple myeloma, but with fewer side effects. It was first approved by the FDA in 2006, according to the company's website.

A patent typically protects new technology for as many as 20 years. But since it sometimes can take that long — or even longer — to bring a new medication to market, the FDA provides an additional incentive. Enlarge this image "We were trying to achieve a balance between competition and incentives" said former Rep. Henry Waxman, D-Calif., of the law that became known as Hatch-Waxman Act. Tom Williams/CQ-Roll Call, Inc./Getty Images hide caption toggle caption Tom Williams/CQ-Roll Call, Inc./Getty Images "We were trying to achieve a balance between competition and incentives" said former Rep. Henry Waxman, D-Calif., of the law that became known as Hatch-Waxman Act. Tom Williams/CQ-Roll Call, Inc./Getty Images Once a new drug is approved, or, as in the case of thalidomide an old drug is approved to treat a new malady, the government gives a drugmaker exclusive access to the market for up to seven years.

Then, in the early 1990s, AIDS researchers found that it boosted a part of the immune system, based on earlier work that suggested a role for thalidomide in leprosy. Frances Kelsey, FDA Officer Who Blocked Thalidomide, Dies At 101 Aug. 8, 2015 Seeing commercial potential, Celgene pulled thalidomide out of the pharmaceutical dustbin and dubbed it Thalomid. It got approval from the FDA in 1998 as a treatment for leprosy. (It's never quite worked out for AIDS, but researchers continue to study possible uses in HIV and other diseases.) A few years after Thalomid hit the market, Celgene altered it a bit by removing an oxygen atom and adding a nitrogen atom, creating a new amino group. The company called the new drug Revlimid.

"One of the barriers to competition that concerns me the most is when companies game the system by taking advantage of certain rules and laws," FDA Commissioner Scott Gottlieb said in early May. "They exploit loopholes in our system to delay generic entry. In these ways, they extend a drug's monopoly beyond what Congress intended."

the price was $6,195 for 21 capsules, a month's supply. By the time David Mitchell started taking Revlimid in November 2010, Celgene had bumped the price up to about $8,000 a month. When he took his last month's worth of pills in April 2016, the sticker price had reached $10,691. By last March, the list price had reached $16,691.