The world’s biggest generic drugmaker, Teva, could share six months’ exclusivity for a copycat version of Merck & Co’s big-selling cholesterol-lowerer Zocor with India’s Ranbaxy Laboratories in a windfall for both firms.
The US patent on Zocor (simvastatin) is due to expire on June 23, opening up a $3.14 billion market to generic rivals. But while Teva and Ranbaxy had claimed a period of six months’ exclusivity for their generics – an incentive system operated in the USA which rewards the first company to file for approval of a generic – the Food and Drug Administration had turned down their claim.
This decision was deemed ‘unlawful’ by a judge, and while the FDA could appeal effectively blocks other manufacturers wanting to sell low-price simvastatin from entering the US marketplace.
Teva has exclusivity for three doses of simvastatin – 10mg, 20mg and 40mg – while Ranbaxy has claimed equivalent rights for an 80mg formulation. Meanwhile, Merck has already signed a deal with Indian drugmaker Dr Reddy’s Laboratories, giving the latter the right to sell an ‘authorised generic’ simvastatin product.
The period of exclusivity means that Teva and Ranbaxy will be able to sell their products at a much higher price than if multiple generic products entered the market simultaneously. For Teva, the exclusivity could add 30 cents a share to its 2006 earnings, accoridng to analysts at Goldman Sachs, who had earlier predicted the company should earn $2. Teva’s US-listed shares rose by 4.5% on the back of the verdict.
Worldwide sales of Zocor were $4.4 billion last year, but Merck has already said it expects these to decline to $2.3-$2.6 billion in 2006 because of generic competition.