Insurer Balks at Teva’s Claim


The Israeli pharmaceutical giant Teva had an unpleasant surprise from its insurance company, which is refusing to cover damages owed to Pfizer for a patent violation, according to U.S. media reports.

Teva and its Indian partner Sun Pharmaceutical signed a compromise with Pfizer, which obligates them to pay a total of $2.1 billion in compensation for infringing on the latter’s patent on acid-reflux drug Protonox.

Teva’s share of the compensation is $1.6 billion, of which it expected its insurer to defray $500 million.

Teva is withholding comment pending its examination of the insurance company’s decision.

This was the first time generic drugmakers were paying damages for marketing a copy of an existing drug for which patents have yet to expire — known as an “at-risk” launch.

Protonix recorded peak annual revenue of almost $2 billion in 2007. But then sales took a sharp downturn following the introduction into the market of generic versions produced by Teva in 2007 and Sun Pharma in 2008.

In May 2010, the court ruled against Teva and Sun. Teva wrote down a $760 million loss in the third quarter of 2012 due to that court ruling, and is expected to write down another $930 million in the second quarter of this year.

The patent covering the active ingredient in Protonix — pantoprazole — expired in January 2011.

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