Ranbaxy fights FDA for killing its approval to make generic Nexium

Ranbaxy's global headquarters, Gurgaon, India--Courtesy of Ranbaxy

Ranbaxy Laboratories has claimed it is fixing the mistakes at plants in India banned by the FDA for poor quality manufacturing, but the Indian drugmaker is not keen to allow the FDA to fix its own mistake. This month, the agency yanked the approvals it has granted Ranbaxy to make generics of two blockbuster drugs, saying it was a mistake to grant the approval given that the plants where they were to be made were out of compliance. Ranbaxy has now filed a federal lawsuit against the FDA for canceling the approvals.

"FDA has no power to correct an alleged mistake it made six years ago," Ranbaxy said in the the lawsuit filed against the agency in federal court late last week, Reuters reports. The suit claims the FDA decision was "arbitrary and capricious."

The legal action was taken in response to the FDA's decision this month to withdraw Ranbaxy's approvals to make generics of both Roche's ($RHHBY) antiviral Valcyte, and AstraZeneca's ($AZN) heartburn medicine Nexium. The FDA, which has been under pressure to get a generic of the highly popular Nexium to market, told Ranbaxy it should never have approved it to make the drugs because the plants it approved were in no shape to make them.

The agency withdrew the tentative approvals it granted for both drugs, as well as Ranbaxy's 6-month exclusive to make Valcyte, which went off patent last year. The FDA then granted Endo Health Solutions ($ENDP) and Dr. Reddy's Laboratories permission to make Valcyte copies. Ranbaxy also was granted a 6-month exclusive for Nexium, which went off patent in May, but the agency has refused to say what its recent actions mean for that approval. Reuters said the suit asks the court to block the FDA from approving any other generic versions of Valcyte or Nexium until its own 6-month exclusive periods on the launch of the drugs has ended.

There have been indications Ranbaxy was trying to get the FDA to approve its plant in New Jersey to make generic Nexium. The agency this summer allowed Ranbaxy to move production of a generic of Novartis' ($NVS) heart drug Diovan to the Ohm Laboratories plant after the issues at its Indian plants kept it from getting its exclusive for that blockbuster to market for 20 months.

While Ranbaxy is fighting this battle over whether its ongoing plant problems are cause enough to withdraw its lucrative approvals, it is Sun Pharmaceutical that stands to lose or benefit the most from the a legal decision that springs from the action. Sun has agreed to buy Ranbaxy in an all-stock deal it originally said was valued at $3.2 billion but has since said is worth closer to $4 billion. It had hoped to wrap up the deal by the end of 2014, but recently reported there may be delays. The deal is awaiting a sign-off by antitrust regulators in both the U.S. and India. Ranbaxy and Sun are India's two largest drugmakers and India's agency is believed to be concerned about the amount of market share the combined company would control there.

- read the Reuters story

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