India’s Ranbaxy Laboratories has announced a settlement with Takeda Pharmaceutical over patent litigation for its proposed generic version of the top-selling diabetes drug Actos.

The agreement will allow Ranbaxy to sell its version of Actos starting 17 August 2012. The agreement grants Ranbaxy a non-exclusive, royalty-free license to its US patents covering Actos.

In 2003, Takeda sued Ranbaxy, Watson Pharmaceuticals and Mylan Laboratories to block the sale of low-cost versions of Actos.

Takeda has since agreed to allow Watson to sell a generic version of Actos from August 2012.

Actos achieved around $3.4bn in branded sales in the US for the 12 months ending in December 2009, according to statistics from IMS Health.