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Sun Pharma Must Face Antitrust Suit Over Nexium, Diavan Generics

Nov. 29, 2019, 5:52 PM

Sun Pharmaceutical Industries Ltd. must face a multidistrict lawsuit over its alleged scheme to corner the market for generic versions of three major drugs, a Boston federal judge ruled, though he trimmed some of the suit’s state law claims.

The proposed class action alleges racketeering and violations of antitrust and consumer laws by Sun, the world’s largest specialty pharmacy, and its subsidiary Ranbaxy Inc. It accuses them of fraudulently submitting bogus or missing data in applications to market generic versions of the reflux drug Nexium, the blood pressure drug Diavan, and the antibiotic Valcyte.

The move’s purpose was allegedly to game the Hatch-Waxman Act, which awards six months of market exclusivity to the first-filing generic maker. The Food and Drug Administration initially approved the applications, then allowed Ranbaxy to keep its first-filing status while it tried to amend its submissions, according to the complaint.

Although the agency ultimately revoked two of its three approvals, Sun and Ranbaxy allegedly did enjoy six months as the sole maker of generic Nexium. The whole scheme bottlenecked other makers of proposed generics behind them while they sorted out their data problems, according to the suit consolidated in the U.S. District Court for the District of Massachusetts.

Judge Nathaniel M. Gorton let most of those claims move forward Nov. 27.

He rejected the argument that the Noerr-Pennington doctrine, which shields legitimate litigation and petitioning activity from antitrust liability, covered Ranbaxy’s regulatory filings. If the suit’s allegations are true, the drugmaker’s conduct falls squarely into the “sham exception,” the judge said.

Sun had argued that the exception only applies to “a defendant’s use of governmental process, as opposed to its use of the outcome of that process.” That doesn’t describe the suit’s claims, Gorton found.

It adequately alleges that the drug companies used the approval process itself “to secure exclusivity while awaiting final approval,” he said.

The judge also gave the OK to the racketeering claims and most of the consumer protection counts, though he threw out claims under the laws of six states.

The plaintiffs are represented by Hagens Berman Sobol Shapiro, Hilliard & Shadowen LLP, Radice Law Firm PC, Sperling & Slater PC, Kessler Topaz Meltzer & Check PC, Wexler Wallace LLP, Cohen Milstein Sellers & Toll PLLC, and Nussbaum Law Group PC.

The drugmakers are represented by Kirkland & Elis LLP, McCarter & English LLP, and Arent Fox LLP.

The case is In re Ranbaxy Generic Drug Application Antitrust Litig., D. Mass., No. 19-cv-10357, 11/27/19.

To contact the reporter on this story: Mike Leonard in Washington at mleonard@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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