LIPITOR Patent Dispute Ends

LIPITOR Patent Dispute Ends between PFIZER and RANBAXY

Rising the curtain of the pharmaceutical world’s most talked-about patent challenge, Ranbaxy Laboratories and Pfizer today announced an out of court settlement of their quarrel over Lipitor, the world’s largest-selling drug (2007 sales: $12.7 billion), in 12 countries including the US, which accounts for over half the global pharmaceutical sales.

Under the terms of the agreement, Ranbaxy will have a license to sell generic versions of Lipitor and Caduet in the United States effective November 30, 2011. Ranbaxy will drop all legal challenge to Pfizer’s patent on Lipitor in these markets, which expire between 2011 and 2018. The settlement provides Ranbaxy with licenses to all the patents it needs to make the generic version and enables Ranbaxy to make and launch a generic before Lipitor’s crystalline and amorphous patents expire in 2016 and 2017. India’s largest pharmaceutical company will get 180-day exclusive rights to sell a generic version of Lipitor in the US sometime in 2011.

The agreement also covers disputes over Lipitor in Canada, Belgium, Netherlands, Germany, Sweden, Italy and Australia, and resolves disputes in Malaysia, Brunei, Peru and Vietnam. In addition, the settlement covers patent litigation related to Accupril in the United States and Viagra in Ecuador. Patent infringement litigation continues in Finland, Spain, Portugal, Denmark and Romania. Pfizer is also in the early stages of litigation over Lipitor with Teva in the United States.

Unlike most other out of court settlements, Ranbaxy, the patent challenger, will not get any compensation in cash. Still, it could make serious money from the exclusive selling rights.

In the past, low-priced generic versions have captured 50 per cent of the market once a drug goes off patent, though prices crash over 90 per cent. As Lipitor sales totalled over $8 billion in the US in 2007, Ranbaxy could make up to $200 million in the 180-day period.

Ranbaxy had burst on the global pharmaceutical market five years ago when it had challenged some of the Lipitor patents held by Pfizer, the world’s largest drug maker, on grounds that these were not substantial improvements over the original patent, which expired in 2011. These patents, it had argued, were obtained just to keep cheaper generic versions of the drug out of the market.

The law suits were seen as a daring onslaught by an Indian generic company on Big Pharma, the collective name given to large trans-national drug makers. Since then, some courts have given a favourable decision to Ranbaxy, while a few have ruled in favour of Pfizer.

This is the fourth settlement of a patent dispute by Ranbaxy in the last one year. It had earlier struck similar deals with AstraZeneca (over Nexium), Astellas Boehringer (Flomax) and GlaxoSmithKline (Valtrex).

Lipitor was the only significant patent challenge the company was fighting in the courts. “The company is now risk-free,” Ranbaxy CEO Malvinder Mohan Singh .

Such challenges involve huge fees to patent attorneys and the outcome is unpredictable. Industry experts said these settlements are attempts by the current management to de-risk the business before the company is taken over by Daiichi-Sankyo of Japan, though said the buyout had nothing to do with it.

“This was expected since Daiichi-Sankyo is an innovator company and respects intellectual property. It will not like to continue litigation with another innovator company,” said Sujay Shetty, associate director, PricewaterhouseCoopers.

According to the agreement, Ranbaxy will be free to sell generic Lipitor (atorvastatin) in Canada, Belgium, The Netherlands, Germany, Sweden, Italy and Australia, apart from the US. Similar disputes in Malaysia, Brunei, Peru and Vietnam have also been settled. The company is expected to start off with Canada later this year.