Ranbaxy’s Woes Add $900 Million to U.S. Heart Drug Costs
By Makiko KitamuraApr 15, 2014 Bloomberg
A gap in U.S. patent law has kept cheap copies of Novartis AG’s (NOVN) heart drug Diovan off the market for 18 months, costing U.S. consumers and insurers as much as $900 million in potential savings.
While the Diovan patent expired in September 2012, the only company allowed to sell copies, Ranbaxy Laboratories Ltd. (RBXY), hasn’t been able to manufacture and market them after four factories it runs in India failed U.S. inspections.
The approval process for generic drugs has two steps. While Ranbaxy gained exclusive, legal rights to sell Diovan copies for six months after approval by being first to apply, they failed to nail down clearance from regulators reviewing the company’s ability to safely and properly make the drug. That’s where the trouble arises: The law doesn’t say what happens if no final approval is given, leaving Diovan in legal limbo.