When Sun Pharma acquired troubled Ranbaxy in 2014 for $4 billion, the India generics giant knew it was inheriting some major compliance problems. At the time, four of Ranbaxy’s five plants were sidelined by the FDA.
Six years later, the Ranbaxy headache persists for Sun as Boston federal judge Nathaniel Gorton denied an attempt by Sun to avoid a trial related to antitrust charges levied against its acquired company.
With the judge's decision, Sun will have to defend against allegations that Ranbaxy conducted a scheme to delay the launches of three generic drugs by its rivals.
In the lawsuit, generic drug buyers claim they overpaid for medicines because Ranbaxy deceived the FDA by submitting generic drug applications that contained “missing, incorrect or fraudulent information." The jury trial is set for Jan. 10.
The lawsuits, which were pooled as a class action in 2019, contend that Ranbaxy submitted false generic drug applications to the FDA in 2004 and 2005. Those false applications allowed the company to obtain tentative approvals to produce generic versions of Genentech’s antiviral drug Valcyte, Novartis’ blood pressure therapy Diovan and Pfizer’s acid reflux med Nexium, the buyers claim.
By becoming the first company to apply to make these generic drugs, Ranbaxy won generic exclusivity for 180 days, as specified by the Hatch-Waxman Act. The plaintiffs say that Ranbaxy’s false applications prevented other companies from entering the market, causing higher prices.
After granting Ranbaxy approval to produce the Diovan generic in 2014, the FDA rescinded its tentative nods for the Valcyte and Nexium generics following increased regulatory scrutiny.
Ranbaxy claimed that the case should be dropped because the plaintiffs didn’t show that that company misled the FDA, but Gorton disagreed. He also questioned Ranbaxy’s argument that it never had monopoly power over Valcyte and Nexium, saying that it was best left for a jury to decide if the company’s status as the first to file provided a competitive edge.