INDIA BUSINESS WORLD – FEBRUARY 2007
The Month that was ...

PHARMA COS LOOKING AT NEW OPTIONS TO SETTLE PATENT CASES

Rising litigation costs and protracted court battles are leading innovator and generic pharma companies to look at new alternatives to settle patent infringement law suits in the US. Ranbaxy Labs' out of court settlement with American drug maker Cephalon for Provigil, a drug prescribed to treat certain sleep disorders like narcolepsy a neurological condition characterised by Excessive Daytime Sleepiness is yet another example of this trend.

The US pharma company had filed in 2003 a patent infringement lawsuit against Mylan, Teva, Barr, and Ranbaxy Lab, after the four generic companies filed applications with the US Food and Drug Administration (FDA) to market a generic version of the Cephalon's $500 million drug. While these lawsuits were still pending, all four generic companies settled their cases with Cephalon in 2006. According to Prescription Action Litigation (PAL), a US consumer health group, under these settlement agreements, each generic company agreed to keep their generic versions of Provigil off the market until 2011 or 2012. The agreements also provided the generic companies with cash payments, supposedly in exchange for certain licensing and supply agreements. Payments to Teva, Ranbaxy and Barr totalled up to $136 million.

In October 2006, PAL filed a lawsuit against Cephalon, Teva, Ranbaxy, Barr and Mylan, claiming that the companies were unfairly keeping generic versions of Provigil off the market, and depriving patients lower priced generics. The case is still pending with the District Court of Pennsylvania.

Last year for instance, Dr Reddy's Lab and GlaxoSmithKline reached an out-of-court settlement for antimigraine drug Immitrex. Dr Reddy's Lab agreed to delay the launch its generic version to the October-December quarter of 2008. The deal specifics like the selling price, royalty sharing and other marketing details were, however, not disclosed. Similarly, when Barr agreed to abandon its challenge to AstraZeneca's tamoxifen patent, the UK drug giant paid Barr $21 million and agreed to supply the latter with Zeneca-manufactured tamoxifen for resale in the US as a generic.