Last week, AstraZeneca ($AZN) petitioned a Delaware district court to bar Dr. Reddy's Laboratories ($RDY) copies of its purple heartburn med, Nexium, contending that the pill's distinctive hue should protect it from copycat competitors. At least for now, the court agrees.
Judge Sue Robinson put the kibosh on sales of Dr. Reddy's copycat med in the U.S., issuing a temporary restraining order against the Indian generics maker's version, Dr. Reddy's told Reuters in a statement. The court based its decision on a review of AstraZeneca's marketing for purple pills Nexium and Prilosec, which includes purple-tinged TV and Internet ads, and taglines such as "Purple. It's Not Just Another Pretty Color."
"As a result of such promotional efforts, there is undisputed evidence that the media and the public associate the color purple with AstraZeneca and its Prilosec and Nexium products," Robinson said in her memorandum.
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| AstraZeneca's Nexium ad with a floating purple pill--Courtesy of AstraZeneca |
Plus, other Nexium generics aren't purple, the court added, presenting photos of Dr. Reddy's Nexium copycats alongside previously released generics from Teva ($TEVA) and Mylan ($MYL). Dr. Reddy's pills have a two-tone purple design, while Teva's capsules are green and blue, and Mylan's are white. Dr. Reddy's pills, "although not identical" to AstraZeneca's, could still confuse patients, a fact that "weighs in favor" of AstraZeneca, the court said.
The legal drama is far from over. The U.S. court order is pending a further hearing or trial, and the court asked AstraZeneca and Dr. Reddy's to suggest a next course of action, Reuters reports. Meanwhile, Dr. Reddy's is "complying with the order of the court and simultaneously evaluating all possible options to resolve the matter at the earliest," it told Livemint.
But the battle could get messy, because AstraZeneca and Dr. Reddy's each have a lot on the line with Nexium. The drug brought in about $1.93 billion in sales for AstraZeneca during the first 9 months of 2015, and AstraZeneca has spent more than $250 million annually, on average, building its purple brand since 1995, helping position the drug as one of its top-selling products.
Even though Nexium faces other generic competition, it's still a big product for Dr. Reddy's, which could gain an additional $25 million to $35 million in potential sales from the drug in its fiscal 2016, according to Bank of America analyst estimates cited by Reuters. Dr. Reddy's itself sees big things for its Nexium generic, expecting more than $50 million from sales of its copycat drug in the next 12 months, the company told Livemint.
- here's the court memorandum (PDF)
- read the Reuters story
- get more from Livemint