Cipla, India's fourth-largest generic drugmaker by revenue, had launched its copy of Onbrez in New Delhi in October last year at a fifth of the original drug's price, citing urgent unmet need in India.
But Novartis last month challenged the Cipla move in the Delhi High Court. Onbrez, chemically called indacaterol, is used to treat chronic obstructive pulmonary disease in adults, and patents covering the drug expire only in 2020.
Foreign drugmakers in India have been frustrated by a series of decisions on patents and pricing in the recent past, with India looking to improve access to cheap medicines in country where a majority of people live on less than $2 a day.
Market access and patent protection for US drugs are expected to feature when Prime Minister Narendra Modi hosts President Barack Obama later this month for India's annual Republic Day celebrations.
The Delhi court, in its order passed on Friday, observed Cipla did not provide any figures about the "inadequacy or shortfall in the supply" of the drug, while Novartis claimed it had enough stocks to meet demand and could supply more if needed.
The court did not agree with Cipla's proposal that it be allowed to make the patented drug, citing public interest, without compensating Novartis for its innovation, according to the court documents seen by Reuters.
The Delhi High Court, however, said that Cipla could file for a compulsory license if Novartis was not able to meet the demand. If granted, that would in effect breaks patent rights, making a cheaper version of the drug possible.
"We will decide on the next course of action once we read the judgement. In the meantime the patients will continue to get the product till the old stocks last," Cipla said in a statement on Tuesday.
A spokeswoman for Novartis's India unit did not immediately respond to a request for comment.
Copyright: Thomson Reuters 2015