14 June 2013Americas

Teva and Sun stung by $2 billion settlement

Generic drug-makers Teva Pharmaceutical and Sun Pharmaceutical have agreed to pay a combined $2.15 billion to settle a patent infringement case over Pfizer’s heartburn drug Protonix.

The settlement is understood to be the highest in history related to a so-called 'at-risk' launch of a generic competitor to a branded product.

‘At risk’ generic launches are so-called because they involve a generic competitor launching a drug while the originator drug is still on patent, and patent litigation is unresolved.

Teva launched a generic version of Protonix in 2007, with Sun following in 2008, while the patent covering the drug’s active ingredient, pantoprazole, expired in 2011. Pfizer acquired the patent when it took over Wyeth in 2009, and that company had previously licensed it from Altana Pharma, now owned by Takeda, which will benefit from the settlement along with Pfizer.

In this instance, Wyeth had unsuccessfully applied for an injunction to prevent generic sales pending the outcome of litigation. The settlement occurred soon after a jury trial on the issue of damages in the case had begun in the US District Court for the District of New Jersey, potentially opening Sun and Teva to the threat of enhanced damages. The court had found the patent of pantoprazole to be valid.

One US lawyer, who did not wish to be named, told LSIPR that the size of the settlement may indicate that Teva and Sun feared an unpredictable jury trial might end in an even worse outcome in terms of damages. The lawyer added that ‘at-risk’ launches always involve a trade-off between the potential benefits of getting to market early and the risk of a negative decision and damages award further down the line.

“We are pleased with [the] settlement, which recognises the validity and value of the innovation that led to Protonix,” said Amy Schulman, executive vice president and general counsel of Pfizer. “[It] reflects our resolve to enforce our patents both in and out of the courtroom,” she added.

Richard Egosi, group executive vice president and chief legal officer at Teva, said: “We are pleased to put this matter behind us as we continue to focus on delivering safe and affordable medicines to patients around the world.”

Both Teva and Sun admitted that their generic sales infringed the patent that was held valid by the court.

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