* Teva, Ranbaxy to pay $150,000 each to settle with New York
* Settlement amount will not significantly impact
* Ranbaxy shares close up 3 pct, Teva shares up 4 pct
By Karen Freifeld and Chris Peters
Feb 18 The New York Attorney General and the
U.S. units of Ranbaxy Laboratories Ltd and Teva
Pharmaceutical Industries Ltd have settled claims that
an agreement between the two drugmakers unlawfully restricted
Shares of both companies rose after they agreed to pay
$150,000 each to the state of New York and refrain from similar
agreements in the future as part of the settlement. The
companies neither admitted nor denied the allegations.
The settlement ends an investigation into an agreement the
companies signed in 2010 to sell a generic version of Pfizer
Inc's cholesterol drug Lipitor in the United States,
while not challenging each other's exclusivity rights on other
The agreement was drawn up as a contingency plan to allow
Israel's Teva to sell the generic Lipitor, or atorvastatin
calcium, in case Ranbaxy's version was not approved by the U.S.
Food and Drug Administration before Lipitor lost its patent
protection on Nov. 30, 2011.
While India's Ranbaxy, majority-owned by Japan's Daiichi
Sankyo Co Ltd, eventually got FDA approval in time, the
agreement remained in place and could have been used to protect
other drugs made by the two companies.
"Agreements between drug manufacturers to protect each
other's market positions violate fundamental principles of
antitrust law, and can lead to higher drug prices," Attorney
General Eric Schneiderman said in a statement.
The agreement related to the sale of only one drug, but by
including the "no-challenge" clause, the companies shielded
dozens of their drugs from legal and regulatory challenges by
the other, the attorney general's office said.
The attorney general's office however said that it had not
identified any anti-competitive effects due to the agreement
during its investigation.
Schneiderman said the case represents the latest application
of recent legal precedent arising out of challenges to
"pay-for-delay" agreements between brand-name and generic
The so-called "pay-for-delay" deals where brand-name
companies pay generic rivals not to sell their versions of a
drug at a fraction of the original price caught the attention of
regulators around the world because it raises patient bills and
public healthcare costs.
"Ranbaxy ... continues to believe that the agreement was
pro-competitive and an important part of making the product
readily available to patients and the U.S. healthcare system in
a timely fashion," a Ranbaxy spokesman said in an email to
Teva declined to comment.
"The settlement is positive for (Ranbaxy). The settlement
amount will not significantly impact the company," said Sarabjit
Kour Nangra, an analyst at Angel Broking.
Ranbaxy has been banned from exporting drugs to the United
States after failing to adhere to the U.S. Food and Drug
Administration's manufacturing standards.
Ranbaxy's shares closed up about 3 percent at 362.15 rupees
on Wednesday on India's National Stock Exchange. Teva shares
were up 4 percent at $47.41 in afternoon trading on the New York