The Law of Gravity Isn't Working for This Off-Patent Drug

Delays for a generic rival to Diovan yield $900 million in higher prices

In the drug business, the arrival of generic competition usually means falling prices as rivals rush to win market share for medicines whose patents have expired. Then there’s Diovan from Novartis, a blockbuster heart pill that lost patent protection in September 2012. In a process specified by U.S. patent law, India’s Ranbaxy Laboratories won the exclusive right to copy Diovan for the first six months of the medicine’s generic period. But U.S. regulators’ safety concerns over Ranbaxy’s factories in India have kept the company from selling its Diovan version. Since other drugmakers can’t market their own generics until Ranbaxy’s pill has been on sale for 180 days, Novartis continues to be the only seller of the heart pill in the U.S.—at a price that’s 37 percent higher than what the company charged when the medicine was under patent.

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