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Corporate - Courts/Legal Issues


Patent cases againt Dr Reddy's, Ranbaxy — `Pfizer's victory not to impact Indian generics'

P.T. Jyothi Datta

Mumbai , March 12

A FAVOURABLE decision from the US Courts, twice in a little more than a fortnight - against Dr Reddy's and now Ranbaxy - may be a double whammy for Pfizer Inc, but it is not necessarily a thumbs-down for Indian generic companies, feel analysts.

Agencies on Friday reported that the US Federal Court had upheld Pfizer Inc's six-month paediatric exclusivity for its top selling anti-fungal medicine diflucan. This would keep at bay domestic drug major Ranbaxy till July 29 this year when Pfizer's exclusivity period expires. But the diflucan case has witnessed litigation in the past. Earlier, Pfizer filed a patent infringement case against Ranbaxy for trying to bring into the US market pfluconazole or the generic version of diflucan - since Pfizer's patent on this drug was to expire on January 29, 2004. Pfizer, however, claimed an additional six months paediatric exclusivity, which extended its patent life to July this year.

The current court ruling in Pfizer's favour came in response to a suit filed by Ranbaxy stating that its version of pfluconazole was not subject to the exclusivity period for Pfizer's product.

According to industry estimates, diflucan had clocked a sales of $1.2 billion in 2003. Only about two weeks ago, another significant ruling had gone in favour of Pfizer when the US Court of Appeals for the Federal Circuit reversed a lower court ruling and determined that the patent extension covering Pfizer's hypertension Norvasc (Amlodipine Besylate) was applicable to Dr Reddy's drug AmVaz (Amlodipine Maleate). Norvasc is the world's top selling hypertension drug from Pfizer, with the global drug major holding patent rights till 2007.

However, analysts tracking the pharma industry are not too worried for the Indian generic companies. "Although the two cases in close succession are not exactly comparable - this sort of a business model involving patent challenges would result in some favourable decisions and some decisions that go against you. It is nothing to worry about and the image of the generic companies does not get affected. For Pfizer it is a double-whammy."

Further, they point out that while in the Dr Reddy's case, sales performance was expected to get affected this quarter, in Ranbaxy's case, that was unlikely to happen as it was not factored into its projections. Ranbaxy's spokesperson told Business Line that the company would now launch its generic version of diflucan only after the patent expires in July and that today's ruling would not affect sales performance.

Other Indian companies such as Matrix (which supplies the drug intermediaries to Ranbaxy) and JB Chemicals have an interest in the pfluconazole market, point out analysts.

But on the swing in fortunes that one sees for generic companies following patent challenges, one analyst observed: "Litigation is a costly business. It involves uncertainty, since it challenges a company in another country, against its lawyers and in their Courts! But to be fair, Indian companies have in the past won patent challenges too. Its all part of the game."

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