When the Israeli media hinted early last month, of a deal between generic-drugs maker Teva and Ranbaxy to sell the generic version of Pfizer's $13-billion cholesterol drug Lipitor, the news was met with much disbelief in industry circles.
Why would Ranbaxy share the windfall gains coming its way, when it sells Pfizer's drug after the patent lapsed in the US, late November?
Ranbaxy was entitled to a six-month exclusivity to sell the drug, as part of a deal it had sealed in 2008. The two companies had just settled a five-year battle, across geographies, over Lipitor.
The patent on Lipitor has now expired, and Ranbaxy has eventually spoken to say it would indeed launch its generically similar version of Lipitor. And yes, it has a deal with Teva.
But that answer, in fact, has only left industry-watchers scratching their heads with more questions.
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Till late on November 30, all eyes were on Ranbaxy and its Japanese-owner Daiichi Sankyo to see how they would pull a rabbit out of the hat. Ranbaxy's two manufacturing plants in India, and about 30 products, were under the US regulator's scanner.
The regulatory Food and Drug Administration gave its approval to Ranbaxy's generic Lipitor (atorvastatin calcium tablets, in the nick of time. And Ranbaxy would now supply generic Lipitor from its New Jersey-based Ohm Laboratories.
Why is Teva in?
So, then again, why is Teva in the picture? A section of industry players says it is a distribution deal, while another lot say it could be to source the Active Pharmaceutical Ingredient that goes into making the finished medicine. Either way, it only means sharing its spoils with the other company.
Ranbaxy's profitability from selling this cholesterol-lowering drug in the US could get shaved-off by about 25 per cent – because of manufacturing in the US and sourcing or distributing through Teva, say analysts.
Pfizer's Lipitor was sold at between $115-160 per month, depending on the dosage, but it will be able to gain more ground now through Watson, the generic company authorised by Pfizer to also sell generic Lipitor, at a reduced price. Pfizer has further locked in with other distribution channels and pharmacies to retain its turf.
Whether or not such action from Pfizer could attract anti-competitive action, consumers in the US could see prices on generic Lipitor even halve, say analysts.
But what could have been a proud moment for a generic company based in India, holding up the promise of medicine at a reduced price, has in fact, turned-out to be a misadventure, observe industry veterans.
And worse, not only does Ranbaxy have to share its kitty, it could see a further blunting of its advantage, if it indeed has to fork out another $400 million or so to clear its regulatory problems with the FDA on its two plants, a US-based lawyer observed.
jyothi@thehindu.co.in