Dr. Reddy’s Wants Indivior to Pay $70 Million for Opioid Delay
(Bloomberg) -- Dr. Reddy’s Laboratories Ltd. is seeking more than $70 million from Indivior Plc as compensation for lost U.S. sales of its generic version of a leading opioid addiction treatment that was delayed in a patent dispute with the U.K.-based drugmaker.
Indivior had managed to block Dr. Reddy’s generic version of Suboxone Film through a court injunction in July, despite the Indian company receiving regulatory approval earlier to sell the market-leading product for treating opioid dependence. Last month, the U.S. Supreme Court refused to uphold that injunction, allowing Dr. Reddy’s to resume sales of the drug.
“If we were not injuncted by the court, we would have made a lot of money,” G.V. Prasad, Dr. Reddy’s managing director and chief executive said in an interview at the company’s headquarters in the south Indian city of Hyderabad. “If we get the lost profits, it’ll certainly outperform.”
Suboxone is the leading prescription drug used to treat opioid abuse which affects about 2 million adults in the U.S. and has turned into an addiction crisis that the Centers for Disease Control and Prevention estimates kills 130 Americans every day.
Read more: Opioid Crisis Has Doctors Studying Their Own Prescription Data
Suboxone Film -- absorbed by being placed under the tongue or inside the cheek to treat addiction to opioids including heroin and prescription painkillers -- accounted for almost all of Indivior’s $1 billion in sales last year. It’ll now be a big boost for Dr. Reddy’s, which gets nearly half of its revenues from North America.
Indivior posted a bond of $72 million to cover Dr. Reddy’s potential claim of lost profit while the injunction was contested, according to Prasad. The Indian pharmaceutical firm is claiming that it’s owed more than that since the injunction lasted longer than the bond was meant to cover. He declined to say how much the company is asking for.
Notwithstanding legal costs and the three other generic versions of Suboxone Film which have entered the U.S. since Dr. Reddy’s legal victory, Prasad said his company could still get about a quarter of the market share, making it a profitable product.
“It will be a huge boost if they get that compensation,” said Amey Chalke, an equity analyst for HDFC Securities Ltd in Mumbai who estimates the Indian drugmaker may have lost as much as $160 million in sales due to the injunction. If Dr. Reddy’s recovers a sum close to that figure, it’ll be scooping up 60 percent of its 2018 profit in one go, Chalke said.
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