Watson's Generic Yaz Gets FDA Approval

A U.S. agency has approved Watson Pharmaceuticals’ (NYSE:WPI) generic version of Bayer’s blockbuster birth control pill Yaz, the company said on Tuesday.

The Food and Drug Administration's nod allows Watson to take a piece of the profitable generic birth control pie that has started to weigh on the bottom lines of pharmaceutical giants.

Yaz last year had total U.S. sales of $173 million. Together with Yasmin, the two birth control brands generate nearly $2 billion a year for Bayer, making it the drug company’s biggest source of income.

Watson is currently in patent litigation with Bayer regarding its generic Yaz, called Vestura. The company did not comment further on the legal matters or say how this approval impacts the suit.

Demand for the pills has exploded in the U.S., however many brands, including Yaz, have led to reports of serious side effects, including blood clots and strokes.

Many insurance companies have been pushing generic brands as a cheaper alternative to the name-brand pills.