Pfizer's Lipitor to go off-patent: Will Ranbaxy cash-in?

Excerpts from India Business Hour on CNBC-TV18 Watch the full show »

In eight days, Pfizer 's patent for anti-cholesterol blockbuster drug Lipitor will expire. CNBC-TV18's Archana Shukla reports on what the markets and various companies involved expect from the world's largest selling drug.

The billion-dollar question

How will Ranbaxy cash in on the 180-day exclusivity it enjoys on marketing the drug in the US, as it is yet to get USFDA approval?

Numerous reports indicate that Ranbaxy will be able to launch a generic version of Lipitor soon after the November 30, raking over USD 500 million in the exclusive period.

These reports are fuelled by positive statements that Ranbaxy's parent Daiichi Sankyo has repeatedly put out. The first one came in September and said generic sales would start in November.

This was repeated by Pfizer in October, which holds the Lipitor patent and by Watson Inc, which will launch the authorised generic version of Lipitor.

Here lies the rub

Two of Ranbaxy's India plants have been banned by the USFDA. While Ranbaxy is confident of a positive resolution with the USFDA, there's no clarity yet if this resolution will include approval for generic Lipitor, analysts echo this worry.

An HSBC report said, "The key downside risk to our call is the forfeiture of Lipitor exclusivity and potential heavy fine payment to FDA."

But looking at the larger picture, analysts feel Ranbaxy will gain from the lifting of the ban, since this will open doors for the launch of over 30 branded generic drugs from these plants.

As far as Lipitor is concerned, Ranbaxy will have a fight on its hands. It will face tough competition from authorised generic Watson and Pfizer, which is aggressively trying to save prescriptions by tying-up with many pharmacy benefit managers.

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