Lawsuit Claims Pact by Pfizer Sought To Snuff Out Market Competition

Eleven California pharmacies have filed a lawsuit alleging that drugmakers Pfizer and Ranbaxy Laboratories colluded in 2008 to let Ranbaxy sell a generic version of the cholesterol drug Lipitor only in other countries so Pfizer could keep selling the blockbuster medication in U.S. markets, Bloomberg reports.

Last year, Lipitor -- the world's best-selling prescription drug -- generated $10.7 billion in revenue for Pfizer. In 2008, the two companies reached a legal settlement that gave Ranbaxy six months' exclusivity to market the generic version of the drug.

Lawsuit Details

The pharmacies filed the lawsuit on Monday in U.S. District Court in San Francisco.

The price people pay for Lipitor is about $4 per day, compared with as little as 10 cents per day for the generic version of the drug, according to the pharmacies (Gullo, Bloomberg, 11/9).

The pharmacies argue that Pfizer plotted to give Ranbaxy exclusive rights to produce lower-cost versions of the drug in seven foreign countries but not in the U.S. That deal would extend until Nov. 30, so Pfizer could keep selling Lipitor in the U.S. at a higher price (Colliver, San Francisco Chronicle, 11/9).

The pharmacies also claim that Pfizer generated $18 billion by extending the time it could exclusively sell Lipitor in the U.S. (Bloomberg, 11/9).

The lawsuit seeks damages equal to triple the amount of the difference between what Lipitor sold for without the generic version and the price it would have been with competition from other drugmakers.

Pfizer's Response

Pfizer spokesperson Christopher Loder said, "Pfizer believes the suit has no merit, and we are confident the Lipitor patent settlement with Ranbaxy is appropriate."

He said the Federal Trade Commission reviewed the terms of the 2008 settlement, adding, "We view the suit as nothing more than an attempt to extract money" (San Francisco Chronicle, 11/9).

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