Ranbaxy settles patent row out of court

Published: Friday 29 February 2008

a patent dispute between pharma companies over a migrane drug in the us market has been settled out of court. Ranbaxy, one of the world's largest producers of generic drugs, announced through a press release on January 21 an out-of-court settlement with international pharmaceutical giant GlaxoSmithKline (gsk) over the migrane drug sumitraptan succinate. Beginning December 2008, Ranbaxy will have a 180-day monopoly in the us to sell the generic version of the drug. gsk's patented version Imitrex commands annual sales of an estimated us $985 million in the us .

"It is likely that the companies have mutually agreed to this as the cost of litigation (in the us) is extremely high, going up to a few million dollars," said M D Nair, consultant and spokesperson for the pharmaceutical industry. If drug companies are not sure of their chances in the court, they prefer to settle outside.

The January deal is the latest in a series of settlements between drugmakers like Ranbaxy and Dr Reddy's Laboratory on one side and international companies like gsk and Novartis on the other. In July 2007, Ranbaxy had arrived at another out-of-court settlement with gsk in July 2007 over the drug Valtrex, used for treating herpes.

These fights pertain only to sale of the drug in the us. When the original patent expires, the patent holder typically applies for a new patent on the same drug with minor modifications. This stops manufacturers of generics from selling their version. The generic drugmakers can challenge this re-patenting under the Abbreviated New Drug Application of us law, arguing the new drug does not have sufficient innovation for another patent. If they win, the generic company gets six months exclusive market rights on the drug.

Taking advantage of this law, generics majors have submitted several patent challenges with the us Food and Drug Adminstration.

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