AstraZeneca called Prilosec "the Purple Pill," but the heartburn medication was more than just a colorful tablet. Considered one of the most successful prescription drugs of all time, Prilosec global sales peaked in 2000 at $6 billion. By then AstraZeneca was already planning for patent expiration in 2001. That year, the company launched Nexium, another heartburn medication that AstraZeneca markets as the new Purple Pill. Stripped of its colorful moniker, Prilosec is now sold over-the-counter for less than $1 per pill; Nexium generally costs three times as much. Last year it took in $5.7 billion in global sales.

Nexium's success has not been without controversy. AstraZeneca is facing class actions in state courts in California, Florida, and Massachusetts over claims that the company deliberately misled customers into paying more for Nexium once Prilosec went off patent. A federal class action in Delaware is currently on appeal.

Essentially, Nexium, or esomeprazole, offers a higher dosage of Prilosec's active ingredient, omeprazole. The FDA determined that Nexium works faster for some people in treating heartburn, and permitted AstraZeneca to market the drug as a faster-working version of Prilosec. But, according to Steve Berman, a name partner at the class action firm Hagens Berman Sobol Shapiro in Seattle, "faster," does not necessarily mean better. "[AstraZeneca] went and marketed to doctors that this was a superior drug to Prilosec."

In court papers, Hagens Berman claims this wasn't an accident: AstraZeneca set up an internal task force to deal with Prilosec's patent expiration. The group allegedly worked with company scientists to tweak the chemical composition of Prilosec and create Nexium. Once the FDA approved the drug, plaintiffs assert that AstraZeneca's marketers launched a billion-dollar advertising campaign that misled consumers and doctors.

But in 2005, a federal district court judge found these claims to be dubious at best, tossing the Delaware complaint. The decision is currently on appeal. Mark Haddad, a partner at Sidley Austin in Los Angeles, who represents Astra-Zeneca, says the dismissal proves that the suits have no merit. "The court recognized AstraZeneca is permitted to advertise Nexium in a manner consistent with its federally approved labeling," he says. In a statement issued to IP Law & Business, AstraZeneca said, "Nexium offers enhanced . . . speed and duration of effect for many patients."

The other class actions in Massachusetts and California survived motions to dismiss in September and October last year, and are now moving toward certification. Meanwhile, AstraZeneca is pursuing two separate patent suits over Nexium, filed in 2005 and 2006 in federal district court in Newark. Ranbaxy Laboratories Limited and Teva Pharmaceutical Industries Limited both filed applications with the Food and Drug Administration to market generic Nexium. William Zimmerman, a partner at Knobbe, Martens, Olson & Bear in Irvine, California, who is representing Ranbaxy, says the company is challenging several patents on the the drug, set to expire between 2014 and 2018. At press time both suits were in discovery.

Errol Taylor, a partner at Milbank, Tweed, Hadley & McCloy in New York, is representing AstraZeneca in the patent litigation. A former research assistant for the Squibb Corporation, Taylor is not involved with the class actions, but he's quick to defend AstraZeneca. "I know firsthand what it takes for a research company to get a drug from the bench to market and how many failures there are along the way. Sometimes there's a failure to appreciate what the innovative pharmaceutical companies go through and what they've done for health care."