Ranbaxy's Patent Litigations in the United States

            
 
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Case Details:

Case Code : ECON015
Case Length : 14 Pages
Period : 1993-2005
Pub Date : 2006
Teaching Note :Not Available
Organization : Ranbaxy Laboratories Limited
Industry : Pharmaceutical
Countries : USA

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“We take legal advice and respond appropriately. But we will not lose sleep over it [patent litigation]. It is something that one has to live with, if one has to do business in the US.”1

– D. S. Brar, CEO, Ranbaxy Laboratories Limited in 2002.

“It's a simple business philosophy. If you play enough of these, you will win some.”2

– Cameron Reid, President, Dr. Reddy's Laboratories Inc., US, in 2003 commenting on patent challenges to branded drugs.

“We will continue to defend against any and all patent challenges that seek to undermine our mission of finding new therapeutic innovations for the patients we serve.”3

– Hank McKinnell, Chairman and Chief Executive Officer, Pfizer Inc.4 after defeating Ranbaxy's patent challenge to Lipitor in the US on December 16, 2005.

Introduction

On December 16, 2005, the federal judge for the Delaware District Court in the US ruled that Ranbaxy Laboratories Limited's (Ranbaxy) proposed generic5 version of Lipitor6 (atorvastatin) infringed the patent rights of Pfizer; the court therefore disallowed Ranbaxy from launching its generic Lipitor in the US market.

Soon after the ruling, Ranbaxy's share price took a beating on the Mumbai7 stock exchange. At the close of the trading on Monday, December 19, 2005, Ranbaxy's shares were trading at Rs. 367.35, down by 5.9 percent from the previous close and much lower than its 52-week high of Rs. 650.

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It was not the first time that Ranbaxy had to face an adverse ruling in a patent challenge.

Earlier in March 2005, Ranbaxy and Teva Pharmaceuticals USA Inc. (Teva)8 were ordered by the US District Court of New Jersey to immediately stop the marketing of generic Quinapril.9

When Ranbaxy and Teva appealed against the preliminary injunction, Pfizer, the original patent holder for Quinapril (marketed under the brand name of Accupril,) prevailed again in November 2005, when the Court of Appeals for the Federal Circuit upheld the preliminary injunction granted by the District Court against Ranbaxy and Teva.

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1] P. T. Jyothi Datta, “Litigation in large doses,”
www.blonnet.com/2002/09/18/stories/2002091800420900.htm.

2] William T. Quinn, “Battling Big Pharma,” www.gibbonslaw.com/publications/ UploadedFiles/12-01-Pharma-CoverStory-1.pdf.

3] “Pfizer prevails in challenges to Lipitor patents in the United States,” http://www.pfizer.com/pfizer/are/news_releases/2005pr/mn_2005_1216.jsp.

4] Pfizer Inc. is the world's largest pharmaceutical company, headquartered at New York, with revenues of $51.3 billion in 2005.

5] A generic drug is a bioequivalent to a branded drug, but normally sold for a lower price.

6] Lipitor (atorvastatin), used in controlling the cholesterol levels, is the largest selling drug in the world, with sales of $ 12.2 billion in 2005.

7] Mumbai is the financial capital of India.

8] Teva was the world's 20th largest pharmaceutical company in 2004 and is based in Israel. It specializes in the development, production and marketing of generics as well as certain branded pharmaceuticals.

9] Ranbaxy and Teva had entered into a joint agreement for the supply and distribution of generic Quinapril. Teva had launched Ranbaxy-manufactured generic Quinapril in the US in December 2004. Quinapril was used to control blood pressure and was patented by Pfizer.

 

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