A US District Court judge for the District of Columbia on Friday denied Novartis AG's (NYSE: NVS; LSE: NPV: SWX: NOVZ) request to block generic versions of Merck & Co.'s (NYSE: MRK) widely used Zocor cholesterol treatment. The latest ruling paves the way for Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) to launch its generic version of Zocor, which has annual sales of $4.6 million for all strengths.
In a final attempt to prevent the launch of Teva’s generic version, Novartis applied for an temporary injunction to prevent approval for the generic version of Zocor. Novartis requested that the launch be delayed by 10 days, but the court dismissed its request outright. Novartis did not join Merck in its campaign against the generic companies but instead, it aimed to cancel Teva’s exclusivity period for its generic version of Zocor
With the legal battle now over, Teva’s next challenge will be in the market itself, after Merck caused an uproar last week by announcing it would cut prices for Zocor and compete on equal terms with generic manufacturers, especially Teva. Generic versions of drugs are usually 30-50% lower than the original, although in this instance, Merck is considering cutting prices for Zocor by more than 50%, thereby creating a precedent where an original drug is cheaper than its generic counterparts.
The news of a possible price war sent Teva tumbling 13% in two days, although Friday’s court ruling on the Novartis appeal, triggered a slight correction and by the close of trading, Teva gained 3.01%. In addition, it was reported that a number of senators are moving to introduce a proposal in the US Senate to block Merck’s proposed price cutting campaign, for fear that this would harm the generic industry.
Published by Globes [online], Israel business news - www.globes.co.il - on June 25, 2006
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