London, August 29:

The Indian drug firm Ranbaxy has launched court battles in the UK and America that could save healthcare providers billions of pounds a year by freeing the rights to make the cholesterol drug atorvastatin. In the process the Delhi-based drug maker could triple its own profits to about $1billion in a year.

The battle will not be easy, as Ranbaxy is fighting for the right to produce the biggest selling drug in the world, which brought in revenues of $12 billion last year alone. The drug, sold under the brand name Lipitor, is owned by the biggest and one of the most fearsome pharmaceutical companies in the world, the American firm Pfizer. Ranbaxy is trying to invalidate Pfizer’s patent, taking away its exclusive right to sell the drug, and market it itself in Britain and America.

Ranbaxy is confident enough about its chances to have already started gearing up to manufacture the tablets. The judge hearing the case in the UK could rule as early as the end of this month, and an American judgment should follow shortly after. “We conclude that the chances of Pfizer prevailing are as likely as a loss,” said research from investment bank Citigroup. In Austria, Pfizer has already lost a similar trial and is awaiting the outcome of a second before it knows whether Ranbaxy can sell the drug. “The ruling is not relevant to litigation in other jurisdictions, there are differences in patent law from country to country,” a spokesman for Pfizer said, “We believe we have presented a compelling case in the US trial and in the UK.”

When drugs are ‘on’ patent the company sets the price and the profit margins can be huge. Sales for just one year can generate well above the $1 billion it can cost to develop a drug, as well as the expense of manufacturing. The American company is known for its aggressive tactics against upstarts such as Ranbaxy, and has fought such legal cases vigorously. But the stakes are high. Pfizer stands to lose $6 billion profit a year and a fifth of its sales if it loses the case. Its share price could fall by as much as a fifth, according to analysts at Deutsche Bank. The company is already facing a $15 billion fall in sales from the potential loss of patents on a number of other drugs. If the biggest selling drug in the world lost its patent, the entire pharmaceutical industry would feel the repercussions.