Ranbaxy Pharmaceuticals Inc. (RBXY) and Teva Pharmaceuticals Inc. (TEVA)’s U.S. unit agreed to settle New York state claims that they colluded on generic-drug sales, including copies of the world’s best-selling medicine Lipitor.
Ranbaxy, controlled by Japan’s Daiichi Sankyo (4568) Co., and Petach Tikva, Israel-based Teva had agreed not to challenge each other on filings for the exclusive right for six months to sell generic copies of brand name drugs after patents for them expired, New York Attorney General Eric Schneiderman said in a statement.
“Agreements between drug manufacturers to protect each other’s market positions violate principles of antitrust law, and can lead to higher drug prices,” Schneiderman said in yesterday’s statement.
The settlement is the latest application of a U.S. Supreme Court decision last year that loosened the rules on lawsuits against drugmakers who pay rivals to postpone low-cost versions of popular medications, known as “pay for delay” agreements, Schneiderman said. The Supreme Court reversed a lower-court decision that had insulated pharmaceutical companies from liability, which had cost drug buyers as much as $3.5 billion a year, according to the Federal Trade Commission.
In the Ranbaxy and Teva case, the two companies had made a “no challenge” agreement as part of a 2010 deal related to the sale of atorvastatin calcium, the generic equivalent of Pfizer Inc.’s Lipitor cholesterol drug, according to Schneiderman. By including the “no challenge” clause in the atorvastatin case, the whole of the agreement shielded dozens of drugs from legal and regulatory challenges, Schneiderman said.
Under the settlement, Teva and Ranbaxy agreed to end the “no challenge” agreement, refrain from entering into similar deals in the future and to pay New York $300,000.
The two companies didn’t admit or deny the attorney general’s findings, according to a draft of the settlement.
Ranbaxy is pleased that the investigation was brought to a close and that Schneiderman didn’t find any anticompetitive effects from the agreement, Charles Caprariello, a spokesman for the company, said in an e-mail.
“Ranbaxy fully cooperated with the investigation, and continues to believe that the agreement was pro-competitive,” Caprariello said.
Iris Beck-Codner, a spokeswoman for Teva, didn’t respond to an e-mail before regular business hours seeking comment on the settlement.
Ranbaxy reported on Feb. 5 that the company’s fourth-quarter group loss narrowed to 1.59 billion rupees ($25.6 million), from 4.92 billion rupees a year earlier as sales increased 7 percent.
Copaxone, an injection for multiple sclerosis, is Teva’s best-selling product, with sales of $4.3 billion last year. The medicine, which analysts say contributes more than 50 percent of Teva’s profit, faces competition from cheaper generics as soon as May. The injectable drug already has competition from newer branded medicines that come in pill form.
To contact the reporter on this story: Joe Schneider in Sydney at firstname.lastname@example.org
To contact the editor responsible for this story: Douglas Wong at email@example.com