INDIA BUSINESS WORLD - OCTOBER 2005
THE MONTH THAT WAS

SETBACK FOR RANBAXY AS UK COURT BLOCKS LIPITOR COPY

The world's largest drug maker, Pfizer Inc today protected its top selling drug Lipitor from an ambitious attack by Ranbaxy Labs on the cholesterol lowering drug's market monopoly in Britain. The UK High Court dismissed Ranbaxy's legal challenge to the main patent protecting Lipitor (chemical name atorvastatin) till 2011, but invalidated another patent on the treatment, which was valid until 2010.
Ranbaxy in its response today said that it would appeal against Justice Pumfrey's ruling that the Indian company's proposed product infringed on one of the patents protecting the Pfizer brand, which had sales of $11 billion. Busting both the patents would have allowed Ranbaxy to sell a cheaper copy of the largest selling drug in the pharmaceutical industry's history.

Ranbaxy Laboratories president Malvinder Singh said "We have been able to win one of the two patents. On the other, we will go in for appeal. We are very confident of our case going ahead." The appeal process, lawyers estimate, could take around a year.

Mr Singh said whichever way the ruling may have gone the other party would have appealed. "There is no change in strategy and we are on course. We have created a strong intellectual property case. Going forward, Indian companies will be making more such challenges and many more of such battles will happen. We have a strong product flow and in such large product battles the stakes are very high. Such kind of big litigation have not been fought earlier," he said.
Some analysts said busting one patent is indeed a gain for Ranbaxy. "It's a half-won battle for Ranbaxy. The fact that Indian companies are giving MNCs a run for their money on patents is itself a major achievement," says VVLN Sastry, country head, Firstcall India Equity Advisors.

Pfizer CEO Hank McKinnell said the court ruling was an important victory not only for Pfizer but for all innovators pursuing high-risk medical discoveries.
Following the ruling, shares in the world's biggest pharmaceutical company jumped 3% to $25 in early trade on the New York Stock Exchange on the decision, while Ranbaxy fell 9% to $10 in London dealings.

International analysts said had Pfizer lost, it might have been interpreted as a precursor to a likely loss for the MNC in its ongoing US Lipitor fight. Pfizer's defeat in the US could lead to generic competition there by 2007, punching a large hole in the group's future earnings. In the US, where a similar case is pending, a ruling is expected before the end of this year. In the UK, the company will be able to sell its product six years ahead of the patent expiry if it wins an appeal. The US case is vital as that market accounts for about 60% of this year's Lipitor sales, according to industry estimates.