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Ranbaxy Labs Generic Drug Applications Antitrust and RICO Class Action

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Ranbaxy Building in India

When the patent on a drug expires, another company may make a generic version of it. But even these generics must be approved by the Food and Drug Administration (FDA). The complaint for this class action claims that Ranbaxy Laboratories Limited and its associates engaged in dishonest behavior in rushing generic applications to the FDA in order to get exclusive rights to make certain generics.

The class for this action is all persons or entities in the US and its territories who bought Nexium or AB-rated generic versions of it directly from the defendants in this case or any brand or generic maker between May 27, 2014 and the end of the effects of the defendants’ antitrust actions.

Although generics are lower in price than the original versions of drugs, four out of five prescriptions involve generic drugs. The generic market can therefore be lucrative. 

The FDA reviews drugs and imposes standards for manufacturing to ensure that drugs have consistent quality, stability, and reliability. The FDA may grant companies that submit applications for generics a first-to-file, 180-day exclusivity period for that generic. It’s this exclusivity system that the complaint alleges that Ranbaxy has abused. 

According to the complaint, Ranbaxy “recklessly stuffed the generic drug approval queues with grossly inadequate applications, deceived the FDA into granting tentative approvals to lock in statutory exclusivities to which Ranbaxy was not entitled, and brandished these undeserved exclusivities to exclude others while its own applications floundered, all at the direct expense of U.S. drug purchasers.”

The complaint says that in the early 2000s, Ranbaxy’s corporate culture went downhill, showing “utter disregard for regulatory requirements, truthful reporting, and responsible business behavior.” Management imposed unrealistic expectations on employees, the complaint claims, and in response, employees “forged test results, changed data, and retroactively created documentation.”

The complaint says the company filed many hastily-prepared abbreviated new drug applications (ANDAs) on drugs such as Nexium, in order to gain first-to-file exclusivity, even if it wasn’t likely to bring the new drugs to market. 

For example, the complaint says that in 2007 and 2008 the company claimed that its plant in Paonta Sahib, India was or would soon be in compliance with FDA standards, although it actually took eight years after that to bring the plant up to standard. Also, the complaint says it dragged out discussions with the FDA and delayed the FDA’s ability to take action on its ANDAs.

In 2014, the FDA seemed to finally catch on to Ranbaxy’s act and revoked its tentative approvals and exclusivity provisions, allowing others to file better applications. 

According to the complaint, Ranbaxy’s deceptive actions blocked other companies from filing more legitimate applications and deprived consumers of access to cheaper drugs. The complaint centers on the company’s application for a Nexium generic and alleges violations of antitrust laws and the Racketeering Influenced and Corrupt Organizations (RICO) Act. 

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