“Under the deal, Ranbaxy will drop all legal challenge to Pfizer’s patent on Lipitor in these markets, which expire between 2011 and 2018. In return, India’s largest pharmaceutical company will get 180-day exclusive rights to sell a generic version of Lipitor in the US sometime in 2011.”
Although Ranbaxy is not going to be compensated in cash, conservative estimates predict that it is bound to be quids in to the tune of $200 million from the exclusive 180-day selling period once the drug goes off patent. The BS further reports that the settlement resolves additional patent litigation between the companies involving Accupril (a hypertension drug) in the US and Viagra in Ecuador.
Earlier, SpicyIP had reported on the AstraZeneca deal involving patents on the purple pill Nexium. Apparently, Ranbaxy’s fabian tactics have paid off with this deal being the fourth settlement this year including one each on Flomax and Valtrex with Astellas Boehringer and GlaxoSmithKline respectively.
However, the ET reports a 7.7% fall in Ranbaxy’s share price, which according to it, is a fallout of the settlement. This is also because the launch of Lipitor has now been pushed to November 2011 as opposed to the earlier expected date in 2010, which means a fall in the expected revenues from Lipitor sales.
As for Pfizer, the settlement pushed its share prices by 2.1%; more importantly, it gives Pfizer a much-required breather to introduce new drugs to replace Lipitor before it goes off patent. In a bid to put at rest speculations of a counter-offer to Ranbaxy to block Daiichi Sankyo’s attempts, Pfizer denied it had any intentions of taking over the Indian drugmaker.
I am a big fan of SPicyIP. But, in this instance it has not lived upto its own standard. Quoting from ill-informed and/or speculative media articles and throwing in unsubstantiated statements do not make a good post, though it may make it appear informative. It is not expected at SpicyIP. One example: The article quotes BS “[I]n return, India’s largest pharmaceutical company will get 180-day exclusive rights to sell a generic version of Lipitor in the US sometime in 2011”. This statement, alone, shows that BS (at least the author of that article) does not know the fundamentals of how the 180-day exclusivity works. And, sadly, by quoting it, SpicyIP is reflecting it, if not endorse. Where is the value-add? It would have been wonderful if SpicyIP has used this opportunity to look at the depth of media knowledge in this area by comparing various reports and pointing out the inaccuracies and inconsistencies. The problem plaguing the Indian business media on matters IP is their lack of understanding of the fundamentals as well as the nuances. And, more worrisome is that they do not know that they do not know. I work in the industry and cannot publicly comment on many such issues.
Hmmm… Sounds interesting! Deal to bury the hatchet— I see that Ranbaxy and Pfizer are trying to conspire against consumers. Deals struck on not to challenge patent validity can be anticompetitive. I suspect this settlement agreement to be void. And amazingly, our regulators are sleeping! Do you have any info on what the recently baptized “CCI” is doing about it? Again, not quite sure if section 3 of the Competition Act does take care of this situation.
Have you come across any Indian judgment on issues concerning validity of agreements that involve forbearance to sue? There is a little confusion in the EU and US position on agreements that contain clauses not to challenge patent validity. Hmm…some serious legal research needed… will let you know if I do something on this.
See this interesting Memo filed by US FTC in Cephalon case in June 2008. Makes an interesting reading! Specifically, “Protecting weak patents does not foster innovation or serve the public interest embodied in the patent system”. http://www.ftc.gov/os/caselist/0610182/080602opposition.pdf
Its nice that you highlighted this deal in your post. Keep the good work going!
Hi Vandana,
Thanks for pointing this out. In my defense, i can only attribute this error to paucity of time, which i realise sounds more like an excuse. However, i am aware of the nitty-gritties of the Hatch-Waxman Act and shall do a post in the near furture on the points which you have rightly raised.
Wishes,
J.Sai Deepak.