Ranbaxy's Patent Litigations in the United States

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Case Details:

Case Code : ECON015
Case Length : 14 Pages
Period : 1993-2005
Pub Date : 2006
Teaching Note :Not Available
Organization : Ranbaxy Laboratories Limited
Industry : Pharmaceutical
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

The US Pharmaceutical Industry

The US was the largest pharmaceutical market in the world. In 2004, it alone accounted for $248 billion out of total global sales of $550 billion.

The US pharmaceutical market was driven by research-based companies such as Pfizer, GlaxoSmithKline, Sanofi-Aventis, Johnson & Johnson, Merck, AstraZeneca, Novartis, Bristol-Myers Squibb, Wyeth and Abbott Labs. Together, these top ten global pharmaceutical giants grossed $235 billion in global sales in 2004 (Refer Exhibit IV and V for global sales and US sales respectively of the top ten pharmaceutical companies in 2004)...

Product Launches and Patent Litigations

Between 1995 and 1996, Ranbaxy filed two ANDAs. In the subsequent two years, the number of applications increased to four and then to 14 per year. Ranbaxy realized that to gain a substantial share of the US generics market, it was necessary to pursue aggressively 'first-to-file' Para IV ANDAs. It increased its ANDA filings and rapidly expanded it product portfolio, especially of antibiotics, in the US...

Outlook

The large pharmaceuticals companies were keen to protect their patents with all their might. In 2005, a drug like Lipitor earned nearly $36 million a day for Pfizer (Refer Exhibit VI for the sales of top ten drugs in the US in 2004).

There were many other drugs that earned anywhere between $3 and $5 million a day for their companies. With such high stakes, it had become very important for patent-holding companies to fight the generic challenges...

Exhibits

Exhibit I: Financial Highlights of Ranbaxy
Exhibit II: The Indian Patent Act of 1970 and the Drug Price Control Order
Exhibit III: Top Ten Pharmaceutical Companies in India in 2004
Exhibit IV: Global Sales and R&D Investment of Top Ten Pharmaceutical Companies in 2004
Exhibit V: Top Ten Pharmaceutical Companies by U.S. Sales in 2004
Exhibit VI: Top Ten Drugs by U.S. Sales in 2004
Exhibit Vii: Big Pharma's Response to the Challenge of Generics