Ranbaxy’s Lipitor clone may hit US soon; Pfizer may cut price of drug to retain mkt share

Ranbaxy Laboratories Ltd.- (Amalgamation) | Pharmaceuticals & Drugs | Healthcare | BSE: 500359 | NSE: RANBAXY

25 Nov 2011 Evaluate

Ranbaxy Laboratories and the American authorities are inching towards a settlement over the Indian drug maker’s regulatory troubles in the world’s largest drug market, brightening its prospects of launching the low-cost version Lipitor, the blockbuster cholesterol lowering drug, on schedule in the US next week. In 2008, the US Food and Drug Administration (FDA) had banned Ranbaxy from selling 30 drugs in the US and stopped approving fresh products from its two Indian plants after it found the company guilty of violating US manufacturing practices. Ranbaxy and FDA were close to reaching an agreement under which the Indian company would pay $350-400 million as a penalty and settle its outstanding issues with the regulator. In return, it is also expected to allow Ranbaxy to launch the generic version of Lipitor.

Ranbaxy is likely to manufacture the dosage form at its manufacturing facility in New Jersey with the basic chemical ingredient being supplied from a plant in Punjab. While the company was in favour of decoupling the settlement on its FDA issues with the approval for launching the cholesterol lowering drug, the US drug authorities have pushed for a comprehensive settlement. Pfizer, the world’s largest drugmaker, earns around $6 billion from Lipitor sales in the US and Ranbaxy is expected to rake in $500-600 million during the 6-month exclusivity period. During this period, Ranbaxy, along with Pfizer, and its generic partner Watson Pharmaceuticals will be one of only three companies that will sell the world’s largest drug in the world’s largest market. But if the company pays a hefty settlement fee, it will partly neutralise the Gurgaon-based company’s benefit from the timely launch.

Pfizer has offered to deliver Lipitor at a cut-price of $4 directly to patients in its fight to retain market share of the world’s largest selling drug just days before the US patent for the medicine is due to expire. The move is expected to hit Ranbaxy Pharma, which has the exclusive rights to sell the generic version for three months, beginning November 30.

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