Operating Ease Eludes Mylan

In a business of thin profit margins, the 180-day rule is a godsend. "It's a net positive," says Brian Laegeler, of the independent financial research firm Morningstar. "A million bucks in legal costs [for a patent challenge and an FDA filing] can return $10s of millions of dollars in profits."

An FDA study shows that when one generic drug enters the market, the price of the copy is only 6% below the price of the brand-name drug. When there are two generic competitors, the average price drops to 52% of the brand name price. With seven competitors, the average price falls to 23% of the brand name price.

Needless to say, investors pay close attention to companies that make the most first-to-file applications, especially for big brand-name drugs. And Norvasc is one of the biggest, producing $4.9 billion in worldwide sales for Pfizer last year, second only to the $12.9 billion from the cholesterol drug Lipitor.

In the U.S. last year, there were 40 million prescriptions for Norvasc, making it the fourth-most prescribed drug, says the medical data firm IMS Health. Pfizer says U.S. sales were $2.5 billion.

Even by the traditional knock-down, drag-out standards of generic-drug competition, the Norvasc case is complex, contentious and confusing. Mylan's chance for 180-day marketing exclusivity is "not a clear-cut case," says UBS' Goldwasser who is neutral on Mylan.