For long, Pfizer?s $10 billion-a-year Lipitor cholesterol lowering drug has been an attractive target for generic drug copies. And the US drug maker?s response to its duly-earned intellectual property has been on predictable lines?zero tolerance. It has relentlessly pursued numerous patent infringement cases filed in more than 50 countries. Indian pharmaceutical companies too have been involved in legal battles with Pfizer over the top-selling prescription drug in the world, with $ 11.4 billion in global sales last year and $5.7 billion in the US alone.

In this backdrop, Pfizer?s loss this November of exclusive US rights to its blockbuster drug is one of the most anticipated events in the $320 billion US drug industry. There is a lot of excitement as branded drugs such as Lipitor, Bristol-Myers Squibb?s Plavix, Eli Lilly?s Zyprexa and Johnson & Johnson?s Levaquin?which together accounted for more than 93 million prescriptions dispensed in 2010 and generated over $17 billion in total sales?likely will lose market exclusivity. The US healthcare will reap at least $70 billion in savings over the next four years as brand-name medicines become available as lower-cost generics, according to IMS Health.

With their strong foundation in generics, Indian pharmaceutical companies are vying to tap the lucrative market. Ranbaxy Laboratories is expected to be the first to sell a generic Lipitor in the US market this November, when one of Pfizer?s key patents on Lipitor expires. ?As the first to seek a generic, Ranbaxy is expected to have 180 days as the lone seller of generic Lipitor, whose chemical name is Atorvastatin. Such exclusivity periods are granted under US law as an incentive to challenge patents and can be lucrative for generic drugmakers,? says Muralidharan Nair, healthcare leader, Ernst & Young?s life sciences practice.

Simultaneously, US-based Watson Pharmaceuticals will begin selling a generic version of the blockbuster heart drug as Pfizer has granted Watson the right to sell an authorised copycat version of Lipitor. It may be recalled that Pfizer also settled patent litigation with Cobalt, a generic drugmaker now owned by Watson Pharmaceuticals, in which Watson has the right to launch a generic authorised by Pfizer also in November this year. Pfizer will make this generic version of Lipitor and Watson will distribute it, with Pfizer receiving payments based on sales. The limited competition could help Pfizer retain more sales in part through a generic version for which it will receive royalties.

This is a typical scenario for a US launch of a generic drug during the first 180 days: two companies selling a generic version. However, healthcare analysts feel that the interplay between brands and generics may take a turn here?Ranbaxy might be forced to delay its launch as it tries to resolve regulatory issues. The Indian generic major has had multiple regulatory and manufacturing issues in the US in recent years that have raised concerns over whether it would be able to launch generic versions of drugs like Lipitor on time. Ranbaxy is working to resolve issues with the US regulatory authorities.

The expectation of a November US launch for generic Lipitor has been set since June 2008, when Pfizer and Ranbaxy announced they had ended years of court fights and settled patent infringement litigation. That year, Ranbaxy Laboratories and Pfizer entered into a lawsuit settlement, under which Ranbaxy had agreed not to sell generic versions of Lipitor in US until November 2011. As per the agreement, Ranbaxy got the license to sell atorvastatin on varying dates in other seven countries including Canada, Belgium, Netherlands, Germany, Sweden, Italy and Australia. Ranbaxy was the first generic drug maker to challenge the Lipitor patent; it was eligible for gaining exclusive marketing rights for 180 days of the drug after getting US health regulator Food and Drug Administration? nod in US.

Dr Reddy?s Laboratories too has filed an abbreviated new drug application (ANDA) with the American drug regulator seeking approval to market an 80 mg dosage strength of Atorvastatin calcium, which Pfizer sells under the Lipitor brand. Pfizer has filed a patent infringement case against the

Hyderabad-based company in the US district court of Delaware. Dr Reddy?s and Pfizer are also involved in patent infringement cases over 10 mg, 20 mg and 40 mg dosage strengths of atorvastatin calcium. Healthcare analysts feel that Pfizer?s ability to secure patents for Lipitor could allow it to retain more revenue than is often the case when generic competition arrives for a brand medicine. Gopakumar G Nair, a leading pharmaceutical attorney, says that a fresh infringement suit filed by Pfizer against Dr Reddy?s is to delay the launch of the Indian drug maker?s low-cost version of Atorvastatin 80 mg in the US market.

Lupin too has managed to wrest some control over Lipitor as the American drug regulator has granted the Mumbai-based company permission to seek approval for a copy of the cholesterol drug. But unlike Pfizer?s Lipitor, which is in tablet form, Lupin?s would be a capsule, says S Ramesh, the company?s president?finance & planning. Price erosions and out-of-court settlements are the two major barriers which Indian generic companies will have to traverse to tap the Lipitor opportunity. A classic example is that the sales of Lipitor fell from $11,434 in 2009 to $10,733 in 2010. Sales will fall by more than half in 2012 after generic drug makers flood the US market with cheaper copies, healthcare analysts inform. US generic drug maker Mylan has also settled a patent dispute with Pfizer, which will enable the former to sell the generic version of Lipitor.

?Commonly, on large pharmaceutical products such as Lipitor, many generic companies pile in once the 180-day exclusivity period lapses and the price drops dramatically. Therefore, Indian generic companies will have to match the challenges that real life situations throw up,? says Sujay Shetty, associate director?pharma and life sciences, PricewaterhouseCoopers India.

On its part, Pfizer is counting on products from the $68 billion Wyeth acquisition in 2009 to replace sales lost to generic copies of Lipitor. Ian Read, the new chief executive officer of Pfizer said last week that drugs won?t be enough to make up for that shortfall and the company must rein in its unproductive spending. The company plans to halt funding research in the areas of allergy, urology, respiratory, internal medicine and tissue repair. Pfizer will focus on the more-profitable areas of cancer, neuroscience, inflammation, vaccines and immunology, he said.

It is expected that a huge proportion of branded drugs in the US market will lose patent protection in coming three years, and thus will open doors for generic substitution. The road to generic Lipitor can be a good learning experience for other Indian pharmaceutical companies as they line up to grab a major share of the business.