Published On: Wed, Jun 12th, 2013

Israeli Teva and Indian Sun Pharmaceuticals to Pay $1.6 billion to Pfizer to Settle Drug Patent Infringement Case


/ By Alan Gallindoss /

Global pharmaceutical company Pfizer announced today that Israeli company Teva Pharmaceuticals Industries and Indian generic drug manufacturer Sun Pharmaceuticals have agreed to pay Pfizer $2.15 billion to settle a patent infringement suit. In 2010 a US court had ruled that Teva and Sun infringed Pfizer’s rights by selling a generic version of its heartburn drug Protonix (pantoprazole sodium) before its U.S. patent had expired.

Under the terms of the settlement Teva will pay Pfizer US$1.6 billion, half this year and the balance in 2014. Sun Pharma, which had earlier made an initial payment of $100 million will now have a further payment to make of US$450 million.

Approximately to thirds of the settlement payments will go to Pfizer and the balance to its Japanese partner Takeda Pharmaceutical Co Ltd. The Protonix patent was held by Nycomed, which is today a subsidiary of Takeda. The patent was then licensed to Wyeth which today is a subsidiary of Pfizer. Wheel within wheels one might say but that is how the pharmaceutical industry works.

It also takes a long time- Pfizer won the original court battle over Protonix in April 2010 when a jury in New Jersey found that Teva had infringed the patent, and had been selling a generic version of Protonix already since 2007. Only on Monday did a trial actually however begin – three years later – to determine damages, prompting Teva and Sun to settle rather than face the unknown outcome of a trial.

Teva had reported earlier in February that it might face a loss over Protonix of as much as US$2.07 billion, so in terms of comparing the settlement amount to its prior expectation one can say that it comes out ahead… still it is a lot of money.

Teva itself reports that as a result of the settlement it will incur a charge again earnings of approximately. US$930 million in the second quarter of 2013, additional to the US$ 670 million in provisions already made. Teva also reports it believes it may have up to US$560 million in net insurance coverage with respect to this settlement which it may be able to recover from its insurance carriers.

Teva’s Group Executive Vice President and Chief Legal Officer Richard Egosi stated: “We are please do to put this matter behind us as we continue to focus on delivering safe and affordable medicines to patients around the world. ”

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