Drugs giant Pfizer will be able to sell the world’s best-selling medicine Lipitor at full price for five months longer than expected through a deal with Ranbaxy, the Indian generics manufacturer.

The deal could mean a further $5 billion (£2.6 billion) of sales of the cholesterol-lowering drug for Pfizer than the market anticipated.

Ranbaxy has challenged Lipitor patents around the world as it tries to muscle in on the drug’s $12.7 billion annual sales with a generic copy.

Pfizer, the world’s biggest drugs company, has been fighting patent challenges from Ranbaxy and others every step of the way, as it gets 26 per cent of its sales from Lipitor.

Although most of the patents covering the drug are due to expire in March 2010, Pfizer argued that Ranbaxy’s copycat version would infringe two patents concerning the manufacture of the drug, which don’t expire until 2016.

Under the terms of the deal Ranbaxy will be the first company to sell generic Lipitor in the US in December 2011, and will have six months as the only company allowed to do so.

It will also be allowed to sell generic Lipitor in Canada, Belgium, the Netherlands, Germany, Sweden, Italy and Australia when patents expire in those countries. Pfizer will stop challenging ongoing Ranbaxy sales of Lipitor generics in Malaysia, Brunei, Peru and Vietnam.

The deal does not end patent battles between the companies over Lipitor in Finland, Spain, Portugal, Denmark and Romania.

US prices of branded medicines usually fall by 20 per cent or more once the first generic hits the market, and can decrease by more than 80 per cent after other generics are launched.

David Reid, Pfizer’s acting general counsel, said: “We’re pleased with this settlement and we actually think it is pro-patient, pro-competitive and pro-intellectual property.”

Reports in an Indian newspaper last week said that Pfizer may hijack a $4.6 billion bid for Ranbaxy from Japan’s third-biggest drug maker.

Malvinder Mohan Singh, chief executive and managing director of Ranbaxy, said: “This comprehensively settles outstanding issues between Ranbaxy and Pfizer, bringing to closure a number of ongoing patent disputes.”

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