The complaint for this class action alleges that Ranbaxy Laboratories, Ltd. took advantage of Food and Drug Administration (FDA) rules on approvals for generic drugs. The complaint says it claimed first-to-file rights for generics of popular drugs even when it had not yet sufficiently developed the generics, in order to block others from doing so.
The class for this action is all persons or entities in the US and its territories who bought Nexium or AB-rate generic versions of it directly from the defendants in this case or from any brand or generic manufacturer at any time between May 27, 2014 until the end of the effects of the defendants’ anticompetitive conduct.
When the patent on a drug expires, other companies are free to make their own generic versions. These must be approved by the FDA in an Abbreviated New Drug Application (ANDA). The company that is first to file an ANDA for a generic of a certain drug has a period of exclusive rights to it.
According to the complaint, since 2000 Ranbaxy has “displayed utter disregard for regulatory requirements, truthful reporting, and responsible business behavior. To meet management’s unrealistic expectations, employees often forged test results, changed data, and retroactively created documentation.” The complaint goes on to say that Ranbaxy did this to file as many ANDAs as possible, to obtain the valuable first-to-file rights, “with little regard for whether it would be able to promptly bring the generic drug to market.”
For example, in 2007 and 2008, the company misled the FDA on the condition of its facility in Paonta Sahib plant in India, claiming it did or soon would comply with cGMP (current good manufacturing practices). In reality, the plant’s conditions were so poor, the company took eight years to fix them.
To further delay things, the complaint says that Ranbaxy “dragged out discussions” on remedial efforts and deflected the FDA from acting on its ANDAs in an ordinary length of time.
The company misled the FDA, the complaint says, to get tentative approval for ANDAs.
In 2012, the FDA got a consent decree to address some of the compliance issues. In 2013, the Department of Justice imposed a criminal fine and civil penalty of $500 million on the company. But these did not solve all of Ranbaxy’s problems.
In 2014, the FDA came to believe that Ranbaxy was simply blocking other drug makers and it revoked some of its tentative approvals and first-to-file rights.
This suit centers on Ranbaxy’s alleged efforts to bring out a generic of Nexium. It claims that the company’s false filings and delays required Nexium users to pay more for the drug over a period of time when another maker could have brought it to market more promptly.
The complaint claims violations of antitrust and anti-racketeering (RICO) laws.