Dr. Reddy's in 2009 sought approval from U.S. regulators to market its Lipitor generics, but Pfizer filed suit in U.S. District Court for the District of Delaware to block the generics until one of Lipitor's many patents lapses in 2017.
Neither Pfizer nor Dr. Reddy's would comment on terms of the settlement, or whether the generics will be allowed to reach the market after Lipitor loses U.S. marketing exclusivity in November.
The drugmakers said terms of the settlement are subject to review by the U.S. Department of Justice and the Federal Trade Commission.
Lipitor, the world's top-selling drug, had second quarter global sales of $2.6 billion, including sales of $1.4 billion in the United States.
Pfizer had previously tried to block another Indian generic drugmaker, Ranbaxy Laboratories, from launching its generic formuations of Lipitor in the United States. But under a settlement with Pfizer reached in 2008, Ranbaxy is allowed to launch on November 30. Ranbaxy is now owned by Japanese drugmkaker Daiichi Sankyo <4568.T>.
As the first company to seek U.S. approval of Lipitor generics, Ranbaxy is entitled to six months U.S. marketing exclusivity.
But Morningstar analyst Damien Conover said Pfizer has recruited Watson Pharmaceuticals Inc
Conover said Dr. Reddy's likely would be able to launch its generics by May 2012, at the same time a second wave of other generic drugmakers begin introducing their formulations of Lipitor.
(Reporting by Ransdell Pierson)