November 23, 2021
Ranbaxy Pharmaceuticals Inc. didn’t need to ever sell a dose of a drug to have wielded monopoly power over it, a Boston federal judge ruled Monday, rejecting the company’s bid for an early win on antitrust claims in the multidistrict suit.
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The antitrust suit, set for a Jan. 10 trial, alleges that Ranbaxy manipulated the Food and Drug Administration’s generic drug approval process to ice out competitors from developing generic versions of antiviral drug Valcyte, high blood pressure drug Diovan, and reflux medication Nexium.
The first to file a complete application for a generic drug blocks competitors for 180 days from marketing the same generic. The plaintiffs who paid for the three drugs claim Ranbaxy fooled the FDA into granting the exclusivity periods by filing applications with missing, incorrect or fraudulent information.
Ranbaxy countered that while it applied to develop the three drugs, it never got so far as to sell generics of Nexium or Valcyte, making it impossible for the company to have had a monopolistic hold on the market.
But the lack of sales doesn’t doom the case, the judge said.
“Within the highly regulated market for pharmaceuticals, plaintiffs have proffered sufficient evidence to create a genuine dispute of material fact as to whether Ranbaxy maintained monopoly power due to its first-filer status and the resulting exclusionary periods,” Judge Gorton said.
Looking at Ranbaxy’s alleged conduct this way, the judge added, “provides strong evidence that Ranbaxy maintained the ‘ability to lessen or destroy competition in the relevant market,’ the determining factor in assessing monopoly power.”
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The suit was consolidated from multiple cases in April 2019. Two groups of buyers — direct purchasers such as drug wholesalers and end-payors such as health care plans — were granted class certification in May.
The buyers contend Ranbaxy wrongly obtained the exclusivity periods and that this delayed the eventual launch of generic versions of all three drugs by other manufacturers, resulting in higher prices. The suit includes claims for violation of the Racketeer Influenced and Corrupt Organizations Act, federal and state antitrust laws, and state consumer protection laws.
The litigation followed investigations into Ranbaxy by the FDA and U.S. Department of Justice that resulted in guilty pleas and a $500 million fine against the drugmaker for lying to regulators and selling drugs that fell short of federal safety standards.
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The direct buyers are represented by Hagens Berman Sobol Shapiro LLP, Hilliard Shadowen LLP, Radice Law Firm PC, Sperling & Slater PC, Kessler Topaz Meltzer & Check LLP, Wexler Wallace LLP, Cohen Milstein Sellers & Toll PLLC and Nussbaum Law Group PC.
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