Pfizer has breathed a sigh of relief after reaching a deal with Ranbaxy Laboratories that ends virtually all patent litigation worldwide involving Lipitor and means that the New York-based giant will get 20 extra months of revenues from the blockbuster cholesterol-lowerer in the USA than many observers expected.

The two firms have been fighting over the validity of patents covering Lipitor (atorvastatin) all over the world since 2003 and a number of analysts thought that Ranbaxy could possibly launch its generic version of the drug as soon as March 2010 in the USA, when Pfizer’s basic patent is set to expire. The enantiomer patent expires in the USA in 2011, while various process and crystalline form patents are valid until 2016 and 2017.

However, the firms have now set a date of November 30, 2011 for the Indian drugmaker to start marketing generic atorvastatin and its version of Caduet, which combines Lipitor with Norvasc (amlodipine). The latter’s patent does not actually expire until 2018.

As for the rest of the settlement, Pfizer will grant a licence for Ranbaxy to sell generic versions of Lipitor on varying dates in Canada, Belgium, the Netherlands, Germany, Sweden, Italy and Australia. The firms have also resolved their disputes regarding the drug in Malaysia, Brunei, Peru and Vietnam.

The settlement also resolves all patent litigation relating to the antihypertensive Accupril (quinapril) in the USA. and the erectile-dysfunction pill Viagra (sildenafil) in Ecuador. However the two companies have not kissed and made up entirely as the settlement does not cover legal disputes in Finland, Spain, Portugal, Denmark and Romania.

Deal is a ‘win-win-win’
“This agreement is a win-win-win because it is pro-patient, pro-competition and pro-intellectual property,” according to Ian Read, president of worldwide pharmaceutical operations at Pfizer. He added that it “provides substantial certainty regarding the timing of the entry of a generic version of Lipitor” and “clearly reaffirms the value and importance of intellectual property”.

Pfizer can certainly enjoy the value and importance of the contribution of Lipitor to its coffers. Last year, sales of the drug topped $12.7 billion, a quarter of the firm’s total revenues so the 20-month extension will provide a welcome cash boost. In a research note, Deutsche Bank analyst Barbara Ryan wrote that the Ranbaxy agreement could add about $5 billion to Pfizer's revenues in 2010 and 2011, which will at least help it maintain the high dividends it pays out to shareholders.

The deal is subject to review by the antitrust authorities in the USA and the two firms noted that it “does not contain any of the practices – such as ‘reverse payments’ – that have been identified as of concern recently by the US Federal Trade Commission”. Other generic drugmakers are still looking to challenge the Lipitor patents but Ranbaxy has a 180-day period of exclusivity from the November date in 2011 and will vigorously defend that position in court if necessary.