Pfizer and Ranbaxy Face Lawsuit For Delaying Generic Versions of Lipitor

(July 6, 2012)

Pfizer Inc. and India’s Ranbaxy Laboratories Ltd. were on the receiving end of an antitrust lawsuit yesterday, accusing both manufacturers of conspiring to delay sales of generic versions of the cholesterol drug Lipitor.

Five large U.S. retailers (Walgreen Co., Kroger Co., Safeway Inc., SuperValu Inc., and HEB Grocery Co.) accused Pfizer and Ranbaxy of running an “overarching anticompetitive scheme” to keep generics off the market until the end of November, 2011, which was almost two years after the original patent expired.

It is alleged that they accomplished this by obtaining a fraudulent patent, engaging in phony litigation, entering a price-fixing agreement to delay cheaper generics, and entering arrangements with pharmacy benefit managers to force retailers to buy more Lipitor.

Lipitor (chemical name atorvastatin calcium) is currently the best-selling drug ever produced, but this lawsuit raises a noteworthy question: would Lipitor still have this title had both manufacturers not conspired in this generic delay? Just to put Lipitor’s numbers in perspective:

In 2011, Lipitor grossed $9.6 billion, which amounts to roughly one-seventh of Pfizer’s total revenue.
In the first quarter of 2012, Lipitor sales dropped from $2.39 billion a year earlier, down to $1.4 billion, a 42% decline. This loss is almost entirely attributed to the loss of U.S. exclusivity.

However, before we point the finger at both manufacturers, it is worth noting that Pfizer denies all allegations, and will defend itself in court, according to spokesman Christopher Loder. “We are confident that Pfizer’s procurement and enforcement of its Lipitor patents was at all times proper and lawful.”

Pfizer, on the other hand, is no stranger to this type of lawsuit. This suit has a strong resemblance to the antitrust lawsuit brought against Pfizer and Israel’s Tiva Pharmaceutical Industries Ltd. by the same retailers over delays in generic versions of Effexor XR, an antidepressant. Pfizer also denied wrongdoing in that lawsuit.

Ranbaxy did not immediately respond to requests for comments.

It will be interesting to see how this suit progresses. Drug manufacturers cannot place a monopoly on their products, and if these allegations turn out to be true, it appears that both Pfizer and Ranbaxy have done just that. For more information, contact one of our lawyers at 1-800-246-HURT (4878).

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