Pfizer and Ranbaxy Settle Lipitor Patent Litigation Worldwide

Holding:

U.S. drug maker Pfizer, Inc. and generics manufacturer Ranbaxy Laboratories Ltd. of India and certain of its affiliates agreed to settle substantially all their patent litigation worldwide involving Lipitor, the world’s most-prescribed cholesterol-lowering medicine. 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. Caduet is a medicine that combines the active ingredients of Lipitor and Norvasc and treats both high blood pressure and high cholesterol. The lawsuits between Pfizer and Ranbaxy regarding Lipitor and Caduet will be dismissed in specified countries, and Ranbaxy will no longer contest the validity of Pfizer’s patents in these countries, including the United States, according to the agreement. The settlement also resolved all patent litigation with Ranbaxy relating to Accupril in the United States and Viagra in Ecuador.

Detailed Summary:

The Lipitor patents involved in the settlement agreement are the basic compound patent, which expires in the United States in 2010; the enantiomer patent, which expires in the United States in 2011; as well as various process and crystalline form patents, which expire in 2016 and 2017; and the combination patent for Caduet, which expires in 2018. Founded in 1849, Pfizer is the world’s largest research-based pharmaceutical company.

The settlement provides shareholders of Pfizer and Ranbaxy, as well as patients, with substantial certainty regarding the potential date – November 30, 2011 – for entry of a generic version of Lipitor in the United States. In addition, the agreement provides a license for Ranbaxy to sell generic versions of Lipitor on varying dates in seven additional countries: Canada, Belgium, Netherlands, Germany, Sweden, Italy and Australia. Pfizer and Ranbaxy also resolved their disputes regarding Lipitor in Malaysia, Brunei, Peru and Vietnam.

Caduet, a Pfizer drug that combines Lipitor and the company’s blood pressure medicine Norvasc, will also be available in generic form in 2011 under the deal. Caduet last year generated $568 million in global sales. In addition to the U.S. cases over Lipitor and Caduet, the agreement settled Lipitor lawsuits in 11 countries. A U.S. appeals court had earlier upheld the patent expiring in 2010. Other litigation, pending in federal court in Wilmington, Delaware, could have kept the Lipitor copies off the market until 2016 and Caduet generics until 2018.

Ranbaxy was the first to challenge the Lipitor patents, which would give it the right to have the only approved generic version on the market for six months. Ranbaxy Chief Executive Officer Malvinder Mohan Singh said in a public statement released on June 18, 2008 that the agreement “provides certainty and visibility’’ to his company’s efforts to sell generic Lipitor. Singh said the 2010 proposal “depended on successfully crossing the hurdles posed by Pfizer’s other patents that expire in the next eight years.’’

Pfizer and Ranbaxy have been fighting in U.S. courts since 2003 over Ranbaxy’s bid to sell generic Lipitor. Pfizer sued Ranbaxy again in March, this time over patents expiring in 2016 related to the process of making atorvastatin, the active ingredient in Lipitor. Pfizer has another patent on Lipitor that expires in 2017.

The settlement complies with all applicable laws, and does not contain any of the practices – such as “reverse payments” – that have been identified as of concern recently by the U.S. Federal Trade Commission.

Pfizer has been defending Lipitor patent challenges by Ranbaxy throughout the world since 2003. The settlement agreement referred solely to Ranbaxy and its affiliates and did not cover legal challenges to the Lipitor patents involving other generic manufacturers. However, Ranbaxy was the first generic challenger to the listed Lipitor patents and, as such, holds the rights to 180 days of marketing exclusivity in the United States.

The patent infringement litigation between Pfizer and Ranbaxy relating to Lipitor will continue in five other European countries—Finland, Spain, Portugal, Denmark and Romania. Court cases involving the enantiomer patents are pending in Spain and Portugal, while an infringement action on the commercial process patent is pending in Finland. Patent cases involving the enantiomer patent are pending in Denmark and Romania.

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