18 February 2013Asia

Teva faces $2 billion damages for selling generic Protonix

Israeli company Teva Pharmaceuticals could be forced to pay more than $2 billion in damages for selling a generic version of Nycomed and Pfizer’s heartburn reliever Protonix before the drug’s patent exclusivity expired in the US.

Teva announced last year that it expected to pay around $670 million in damages for infringing the Protonix patent, which is owned by European pharmaceutical company Nycomed and licensed to US drugs maker Pfizer.

But in an annual report filed in the US on Tuesday, 12 February, the company said that “ultimate resolution of this matter could result in a further loss of up to $1.4 billion in excess of the amount accrued”.

Teva asked the US Food and Drug Administration to approve its generic version of Protonix in 2004. Nycomed and Pfizer sued Teva for patent infringement, attempting to block its generic from being released, and Teva attempted to have the Protonix patent invalidated and claimed it is obvious.

In December 2007 – more than three years before the Protonix patent expiry date – Teva launched the generic in what is known as an “at risk” launch (a launch during continuing patent litigation), expecting Nycomed and Pfizer’s patent to be invalidated.

But a jury upheld the Protonix patent’s validity in April 2010 and found Teva liable for infringement. The decision was upheld by a judge in New Jersey, and a jury trial to determine the damages that should be awarded to Nycomed and Pfizer is scheduled for July this year.

Howard Hogan, a partner at Gibson, Dunn & Crutcher LLP in Washington, DC, said that $2 billion would not be an unusually large settlement for a case concerning a blockbuster drug, but added: “This should serve as a warning to generics companies about the dangers of at risk launches.”

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