Ranbaxy Laboratories Ltd, India’s leading drug maker has recently settled a patent dispute with Takeda Pharmaceutical Company Ltd. The dispute related to the generic version of diabetes drug, Actos, in the United States. Ranbaxy produces a wide range of affordable and quality generic medicines having a huge focus on R&D. It has obtained several approvals in developed markets and significant progress in New Drug Discovery Research. On the other hand, Takeda is a research-based global pharmaceutical company, based in Japan. Takeda's in-house ethical drugs are marketed in around 90 countries worldwide and are recognized as the brand in major countries worldwide.

Takeda had filed patent infringement litigations against Mylan Pharmaceuticals, Ranbaxy Laboratories and Watson in 2003 in a US court.This was filed on the basis of response to the filing of Abbreviated New Drug Applications (ANDA) with the Food and Drug Administration under provisions of the Hatch-Waxman Act challenging certain of Takeda’s patent. According to Hatch-Waxman Act, any generic firm which successfully challenges the patented drugs would get an exclusive marketing rights for 180 days before the expiry of patents.

In March 2010, Ranbaxy reached an agreement with Takeda resolving patent litigation related to Ranbaxy's generic equivalent of Actos. Actos is a prescription medication used with diet and exercise to improve blood sugar (glucose) control in adults with type 2(non insulin dependent) diabetes. Actos had approximately $3.4 billion in brand sales for the twelve months ending December 31, 2009, according to IMS Health. As per the agreement Takeda granted Ranbaxy a non-exclusive royalty-free licence to its US patents covering Actos, allowing Ranbaxy to market a low-cost version thereof in the US starting August 17, 2012 – almost 19 months after the basic patent over Actos expires in the US on January 17, 2011.

Takeda has a string of additional patents in the US, valid up to 2016. Some of them even extend up to 2021. The agreement nullifies the effect of such patent protections, though Takeda has ensured exclusive sales of its medicine for 19 more months after the expiry of the basic patent through out-of-court settlement. Since Takeda is engaged in agreements with other generic firms, that have challenged the company’s patent in the US, Ranbaxy would not enjoy an exclusive market.

The patent for Actos is to expire on January 2011. There are at least four companies who can launch the product soon after that therefore the agreement won’t be a major upside for Ranbaxy, as the company would have enjoyed a 180-day exclusive marketing opportunity, if it had succeeded in invalidating the patents beyond 2011.Coming to the positive development for Ranbaxy, this agreement removes uncertainty on the launch date and has reduced further patent litigation costs, though it is difficult to project the amount of monetary gains the deal may bring to the company as the exact nature of the deal has not been revealed but this agreement will allow RPI to bring to patients with diabetes a generic alternative in this important therapeutic area.