Ranbaxy settles patent dispute with Pfizer over Lipitor, other drugs

Though the settlement pushes back Ranbaxy's plan by 20 months, yet, it brings a certain amount of certainty to Ranabaxy's launch plan and also has saved it a considerable amount of litigation cost.

The settlement also makes Ranbaxy "risk free" as Daiichi, being an innovator drugmaker, was clearly not very keen on pursuing a legal battle with another innovator drugmaker Pfizer over Lipitor. The settlement with Pfizer also means Daiichi will not be facing any challenge from Pfizer over the acquisition of Ranbaxy.

Pfizer also gains from the deal as it will earn additional revenue of around $20 billion by selling Lipitor during the extended period. Besides, the settlement also allows Pfizer to pursue its own course of finding new drugs that would replace Lipitor.

According to Ranbaxy CEO Malvinder Mohan Singh, the settlement is applicable only within the US territory. "This is the largest and the most comprehensive out-of-court settlement ever in the pharmaceutical industry covering a total revenue of over $13 billion. It's a win-win situation for all. The revenues will start kicking in from this year as we will be launching generic version of Lipitor in Canada this calendar year," he said.

In addition to the US and Canada, Ranbaxy confirmed that it has acquired the licence to sell the generic version of Lipitor in six more countries - Belgium, Netherlands, Germany, Sweden, Italy and Australia - and can launch the generic drug 2-4 months ahead of patent expiry in these countries.

"We could have launched [the generic version of Lipitor] in March 2010 [in the US] but there were always risks and uncertainties. Now we will be launching this product absolutely risk-free in all these markets," Singh said.