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Drug maker Pfizer has reached a deal with generics company Ranbaxy Laboratories that will end their five year battle over the world’s best selling medicine, Lipitor.

Ranbaxy, based in India, has been challenging Pfizer’s patents on Lipitor in courts around the world, in an effort to bring a generic version of the drug to the market early. The cholesterol medicine made almost $13 billion in sales for Pfizer last year, more than a quarter of the company’s total revenue. The deal reached between the two companies will allow Ranbaxy to market its generic version in November 2011.

Pfizer had argued in court its patents should last until 2016, but if the courts had found against the drug maker it could have been facing generic competition as early as 2010. Ranbaxy will have the exclusive right to market the generic for the first six months. The agreement will apply not only in the US but in Canada, numerous European countries and in several places in Asia.

There’s been speculation recently that Pfizer might try to launch a takeover bid for Ranbaxy, after the Indian company was approached with a merger offer from a Japanese drug maker.