Biotech Values

[DewDiligence]

(NVS)—FDA finally approves generic Diovan:

http://www.reuters.com/article/2014/06/26/ranbaxy-lab-fda-idUSL2N0P71KH20140626

The U.S. Food and Drug Administration said on Thursday it has approved Ranbaxy Laboratories Ltd's generic version of Novartis AG's blood pressure drug Diovan.

Novartis lost its patent rights to Diovan in the United States at the end of 2012 but has avoided generic competition because of multiple quality control problems at Ranbaxy that prevented the company from exercising its right to become the first generic version of the drug on the market.

This is one shortcomings of Hatch-Waxman—if the first-to-file P-IV challenger is unable to launch in a timely manner, it can keep all generic versions of the drug off the market for as long as 30 months.

Ranbaxy’s problems have been a windfall for NVS, but the windfall has finally come to en end.