Pfizer, Teva settle rancorous Lipitor fight in U.K.

A bitter legal battle over generic Lipitor in the U.K. is now over. Pfizer ($PFE) settled the patent fight with Teva Pharmaceutical Industries ($TEVA), keeping copycat versions of the cholesterol fighter off the market until May 2012. The settlement also included a promise from several U.K. wholesalers and pharmacies to hang onto supplies of Teva's version until that date.

The deal follows months of rancorous back-and-forth between the companies, beginning in June, when Teva launched a version of the blockbuster drug. Lipitor copies quickly spread into pharmacies all over the U.K. Pfizer went to court, citing Teva's "aggressive launch... on a very large scale," and won a court order blocking distribution, but in the meantime, Teva's version made it onto the streets.

Other drugmakers have suffered similar quick-and-widespread generic launches before. They can devastate sales in short order, and for months, even if courts end up siding with the branded pharma company. Apotex rolled out a version of the Sanofi/Bristol-Myers Squibb bloodthinner Plavix back in 2008, and the companies estimated that Apotex's version cut into sales by more than $1 billion.

Pfizer rushed to put a stopper in the flow of generic Lipitor. The company threatened to go after any company that sold Teva's version; Teva struck back by offering legal assistance to pharmacies that chose to defy Pfizer. By mid-July, Pfizer had won an injunction against Teva and the distributors. The branded drugmaker said it would let pharmacies off the hook as long as they either returned their stocks or stored them for sale in May 2012, but drugstores that sold the Teva product would be added to the lawsuit. A trial was scheduled for November. Teva crowed about the early trial date and said it was confident of a win.

Now, Pfizer and Teva have come to terms. Neither Teva nor any of the other parties to the suit--which include Rowland & Co. and Day Lewis--will sell Teva's Lipitor copy before the patent expires in May 2012. "Teva acknowledges that Pfizer's Lipitor patent is valid and infringed by Teva's product," Pfizer said in a statement. No details on the terms of the settlement were disclosed.

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