Court orders Sun Pharma to face antitrust suit over generic drugs

USA – A Boston federal judge has ruled that Sun Pharmaceutical Industries Ltd. must face a multidistrict lawsuit over its alleged scheme to corner the market for generic versions of three major drugs.

Sun, the world’s largest specialty pharmacy, and its subsidiary Ranbaxy Inc. are accused of engaging in an anticompetitive scheme to delay rivals’ generic drug launches.

The lawsuit claims that generic drug purchasers overpaid for medications because Ranbaxy deceived the FDA by submitting generic drug applications that contained “missing, incorrect, or fraudulent information.” The jury trial is scheduled for January 10.

Drug buyers accused Ranbaxy of wrongfully obtaining tentative approvals from the US Food and Drug Administration in 2007 and 2008 to produce generic versions of Novartis AG’s blood pressure drug Diovan, Pfizer Inc’s acid reflux medication Nexium, and Genentech Inc’s antiviral drug Valcyte.

According to the plaintiffs, Ranbaxy’s false applications prevented other companies from entering the market, resulting in higher prices.

Ranbaxy won generic exclusivity for 180 days by being the first company to apply for these generic drugs, as specified by the Hatch-Waxman Act.

According to the complaint, the Food and Drug Administration initially approved the applications, then allowed Ranbaxy to retain its first-filing status while it attempted to amend its submissions.

However, following increased regulatory scrutiny, the FDA rescinded its tentative approvals for the Valcyte and Nexium generics after granting Ranbaxy approval to produce the Diovan generic in 2014.

Despite the fact that the FDA eventually revoked two of its three approvals, Sun and Ranbaxy allegedly enjoyed six months as the sole manufacturer of generic Nexium.

According to the suit consolidated in the United States District Court for the District of Massachusetts, the entire scheme bottlenecked other makers of proposed generics behind them while they sorted out their data problems.

Sun failed to rebut claims by generic drug buyers that they were overcharged for medications as a result of a fraud perpetrated by Ranbaxy Laboratories on U.S. regulators, according to U.S. District Judge Nathaniel Gorton in Boston.

Ranbaxy’s lawyers contended that the plaintiffs failed to demonstrate that the FDA was duped into tentatively approving the drugs through fraud.

However, in denying Ranbaxy summary judgment, Gorton stated that the plaintiffs had presented sufficient evidence demonstrating that the FDA had not assessed all of the evidence of the company’s wrongdoing for a jury to consider the fraud question.

He also rejected Ranbaxy’s claim that it lacked monopoly power over Valcyte and Nexium because it never sold them.

Gorton stated that the impact of its first-filer status could be considered by a jury in determining whether it had monopoly power.

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