The Food and Drug Administration has won the latest installment of its grudge match with Teva Pharmaceuticals (NASDAQ:TEVA) over the 180-day exclusivity period for generic versions of Johnson & Johnson's (NYSE:JNJ) Risperdal.

For those at home not keeping score, here's a quick update:

  • Teva filed an application to sell generic Risperdal, claiming that one of Johnson & Johnson's patents was invalid. Point Teva.
  • The FDA removed the patent from its list -- called the Orange Book -- but didn't award the 180-day exclusivity period. Point FDA.
  • Teva sued and convinced a lower court to force the FDA to award the exclusivity, which started back in July. Point Teva.

On Friday, an appeals court overturned the earlier decision, leaving the FDA free to approve other generic-drug makers' versions of Risperdal. Mylan (NYSE:MYL), Par Pharmaceutical (NYSE:PRX), and Barr Pharmaceuticals (NYSE:BRL), among others, all have tentative approvals that the FDA could approve in short order.

The weird thing about this whole ordeal is that I can't really see what's in it for the FDA. Obviously the competition-free period provides big bucks to Teva -- Johnson & Johnson sold almost $2.2 billion of Risperdal in the U.S. last year -- but why does the FDA care so much whether Teva is the exclusive seller for six months? Maybe the agency thinks it's in its governmental duties to ensure that there's competition if there's supposed to be.

The recent loss may not be a total setback for the generic-drug company. Teva didn't say, but it could have sold enough of the drug to satisfy the market for most of the 180-day period. After all, the company knew further competition was a possible outcome of the lawsuit. Teva apparently made this kind of move last year when it reportedly made a major launch of generic versions of Wyeth's (NYSE:WYE) Protonix because Wyeth was likely to either settle or launch its own generic version (Wyeth chose the latter).

Teva says it'll try to seek a stay pending its appeal, so there may be one more episode left in this drama. Stay tuned.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Johnson & Johnson is a selection of the Income Investor newsletter. The Fool has a disclosure policy.