1. Dr Reddy’s Labs takes a hit in the US on the colour purple

Dr Reddy’s Labs takes a hit in the US on the colour purple

Dr Reddy’s Laboratories (DRL) has been restrained by the a US court from selling generic esomeprazole (Nexium) in the US market. Nexium is used to treat severe abdominal and acid reflux.

By: | Hyderabad | Updated: November 11, 2015 12:30 AM
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Dr Reddy’s Laboratories (DRL) has been restrained by the a US court from selling generic esomeprazole (Nexium) in the US market. Nexium is used to treat severe abdominal and acid reflux.

Dr Reddy’s Laboratories (DRL) has been restrained by the a US court from selling generic esomeprazole (Nexium) in the US market. Nexium is used to treat severe abdominal and acid reflux.

The order was passed by the District Court of Delaware, granting a temporary restraining order (TRO) with immediate effect on the sale, delivery, transfer or other disposition of its generic esomeprazole product in the US market. The company had launched the generic version of AstraZeneca’s Nexium in the US market on September 25. Nexium had sales of approximately $5.2 billion for the 12 months ended July 2015 in the US market.

“The order came about as a result of a motion moved by AstraZeneca objecting to the usage of the colour purple in the said generic product,” the company said in a statement.

The order has been passed pending further hearing or trial. The court has asked the parties to propose a next course of action and submit it to the court.

The company is complying with the order of the court and simultaneously evaluating all possible options to resolve the matter at the earliest, it said.

On October 29, AstraZeneca had asked a Delaware federal court to bar DRL from introducing a purple generic version of the heartburn medication Nexium, saying the colour is trademarked and will confuse customers.

The London-based pharmaceutical company said that as the result of an expensive marketing campaign, the public now inexorably connect the “purple pills”,Nexium and the related drug Prilosec, with AstraZeneca, and that the attempt by DRL to “free-ride off the fame of AZ’s famous purple pills” harm both the original drugmaker and the public.

DRL’s generic version of Nexium is purple, with half of the capsule the dark purple of AstraZeneca’s products and half a lighter shade not used by AstraZeneca. “Dr Reddy’s unauthorised use and promotion of generic esomeprazole magnesium capsules bearing AZ’s trademarked purple colour is likely to cause confusion, mistake and deception as to the source or origin of the generic medication, and is likely to falsely suggest a sponsorship, connection, affiliation, licence or association of defendant and its purple pill with AZ and AZ’s Prilosec and Nexium products,” the complaint states.

AstraZeneca said it has spent more than $250 million a year since 1995 on branding and marketing efforts for the two pills, which became two of the best-selling medications of all time. The colour provides no medical or safety purpose and is used exclusively for brand recognition, the company said.

“The issue is not that big, given that it involves only the colour issue. However, in a worst-case scenario, we had factored in sales of $30-50 million for the product, leading to the EPS impact of Rs 1-2,” said Nangra, an analyst with Angel Broking.

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