Ranbaxy, Takeda settle Actos patent dispute

Ranbaxy Laboratories Ltd, India’s leading drug maker by sale, today said it had settled with Takeda Pharmaceutical Company Ltd a patent dispute related to a generic version of the Japanese company’s diabetes drug, Actos, in the United States.

“Under the terms of the agreement, Takeda granted Ranbaxy a non-exclusive royalty-free licence to its US patents covering Actos,” Ranbaxy said in a statement.

The agreement between the two companies allows Ranbaxy to market a low-cost version of Actos in the US starting August 17, 2012 – almost 19 months after the basic patent over Actos expires in the US on January 17, 2011.

While it is difficult to invalidate the basic patent, generic companies often challenge the related patents, meant to extend the patent protection. In case of Actos, which had sales of $3.4 billion in 2009, Takeda has a string of additional patents in the US, valid up to 2016. Some of them even extend up to 2021. The agreement effectively nullifies the effect of such patent protections, though Takeda has ensured exclusive sales of its medicine for 19 more months after the expiry of the basic patent though this out-of-court settlement.

The agreement won’t allow Ranbaxy to enjoy an exclusive market, as Takeda is engaged in similar agreements with other generic pharmaceutical firms that have challenged the company’s patent in the US. Last week, Watson Pharmaceuticals, a US-based generic drug company announced a similar agreement, with an assured launch of its version of Actos in August 2012.

Industry experts feel the agreement won’t be a major upside for Ranbaxy, as the company would have enjoyed a 180-day exclusive marketing opportunity, if it had succeeded in invalidating the patents beyond 2011.

“The patent for Actos is to expire on January 2011. There are at least four companies who can launch the product soon after that. I don’t see any significant upside of this patent settlement,” Ranjit Kapadia of HDFC Securities said. It is known that generic drug firms such as Alphapharm, Mylan, Teva and Watson are all expecting US drug regulatory approval for generic versions of Actos.

Ranbaxy has preferred the low risk patent settlement route ever since Daiichi Sankyo, the Japanese drug multinational, picked up a majority stake in the company.