updated 10/12/2005 6:08:47 PM ET 2005-10-12T22:08:47

Pfizer Inc. won a significant victory on Wednesday when a British judge upheld a key patent covering its blockbuster cholesterol drug Lipitor in the United Kingdom but the medication still faces a similar yet more important case in the United States.

Judge Nicholas Pumfrey upheld the patent covering atorvastatin, Lipitor’s active ingredient, but ruled that another patent was invalid. Indian pharmaceutical company Ranbaxy Laboratories Ltd. had challenged both patents, and was joined by Britain’s Arrow Generics Ltd. against the second patent that was ruled invalid.

Pfizer said the decision upholding the exclusivity of the patent covering atorvastatin until November 2011 was an important victory for scientists.

“This court decision is consistent with the fundamental principle that patent laws exist to support and encourage medical innovators, not undermine them,” Pfizer chairman and CEO Hank McKinnell said in a statement.

Lipitor is the world’s best selling drug, with revenues of $10.86 billion last year. Pfizer said 7 percent of Lipitor sales are generated in the United Kingdom.

The New York-based company said it would appeal the decision on the second patent, which expires in July 2010 and covers the calcium salt of atorvastatin.

Ranbaxy vice president Charles Caprariello said the company would appeal the ruling which upheld the main patent.

Pfizer faces a potentially more serious threat to Lipitor. Ranbaxy has brought a suit against two Lipitor patents in the United States, where $6.6 billion, or about 61 percent, of the drug’s sales are generated. A ruling is anticipated by the end of the year.

“The U.S. case is more important because of the economic implications,” said Catherine Arnold, an analyst at Credit Suisse First Boston. “It (the U.K. ruling) is a nice psychological boost but you can’t extrapolate the U.S. ruling from this because of the different legal standards.”

Prudential Equity Group Inc. analyst Timothy Anderson wrote that Wall Street is divided on how the U.S. decision on Lipitor’s patents will go, but that his legal consultants expect Pfizer to win on the critical active ingredient patent.

Arnold also expects Pfizer to win on the active ingredient but says the second patent may not be upheld. That would be bad news for Pfizer because the second patent expires 15 months later so a loss would deprive Pfizer of over a year’s worth of Lipitor revenue.

Al Rauch, an analyst at A.G. Edwards & Sons Inc., notes that the case isn’t the only issue facing Lipitor. Next year, two other cholesterol lowering drugs lose patent protection, and there is concern that Lipitor sales growth may sputter as managed care companies push the cheaper, generic versions of those medicines.

That is already happening. Pharmacy benefit manager Express Scripts Inc. is recommending clients remove cholesterol-lowering drug Lipitor from their preferred drug lists next year to promote the use of a rival product, Zocor, which will become significantly cheaper in June when it loses patent protection. Drugs on the preferred list have lower copayments than competing medicines, making them more attractive to consumers.

Pfizer spokesman Jack Cox said Express Scripts’ program changes won’t affect Pfizer’s earnings.

Meanwhile, health plan Wellpoint Inc. has been letting doctors and patients know that generic Zocor is coming and will suspend copayments for those who use it for up to four months.

Zocor is made by Merck & Co. Pravachol, which is made by Bristol-Myers Squibb Co., is also losing patent protection next year.

Analysts had been anticipating attempts to foster use of generic Zocor as companies, unions and others who provide health benefits seek ways to shrink spiraling health care costs, but the question remains whether they will really affect Lipitor sales.

Rauch said that so far managed care companies haven’t been very effective in switching patients taking a brand name to a generic rival. But he said the push to move patients from Lipitor will be especially aggressive because of how much is spent on cholesterol-lowering medicines.

The category of drugs known as statins, which includes Lipitor, Zocor and Pravachol, is the largest in the U.S., according to IMS Health. Category sales totaled $15.6 billion last year or 6.6 percent of the U.S. market.

“I think the benefit managers are really going to try to make the switch work,” said Rauch. “The big concern is not that Lipitor sales will shrink but that they’ll stop growing.”

Rauch doesn’t think doctors will switch patients doing well on Lipitor to other drugs but may start new patients on the cheaper, generics.

Arnold also noted that Lipitor is facing competition from Vytorin, a drug made by Schering-Plough Corp. and Merck as well as Crestor, made by AstraZeneca PLC.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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