AstraZeneca PLC, Ranbaxy Laboratories Lose Bid To Derail Nexium Landmark Trial

AstraZeneca, Ranbaxy Lose Bid To Derail Nexium Landmark Trial

November 25, 2014

By Mark Terry, Breaking News Staff

U.S. District Judge William Young in Boston today denied a bid by U.K.-based AstraZeneca Plc and India-based Ranbaxy Laboratories to bring an early end to a collusion lawsuit that had charged AstraZeneca with signing anticompetitive deals to protect its heartburn medication, Nexium, from competition from generic versions.

Attorney Girard Gibbs of New York firm Girard Gibbs LLP filed the class action lawsuit against the company on Oct. 16, 2012.

The Girard Gibbs website states, “This class action is brought on behalf of all consumers and third-party payers in the United States and its territories who purchased brand-name Nexium and/or its generic equivalents since April 14, 2008. Plaintiffs seeks judgment that the ‘pay-for-delay’ agreements are unlawful under the Sherman Act and equitable relief for violations of various state antitrust, consumer protection, and unjust enrichment laws.”

AstraZeneca and Ranbaxy argued that the plaintiffs did not provide enough evidence that AstraZeneca had illegally paid Ranbaxy to delay sales of the generic version of Nexium. According to a Bloomberg article, another defendant in the case, Israel-based Teva Pharmaceutical Industries Ltd. “agreed in principle to settle the lawsuit.” The judge allowed Teva attorneys to leave the courtroom, but no details were provided.

AstraZeneca and Ranbaxy requested a directed verdict, as opposed to the jury trial. This was turned down by the judge.

A so-called pay-for-delay deal involves a brand-name drug company paying off a potential competitor to delay selling a generic version of their brand-name drug. The argument against this is that it is noncompetitive and allows the brand-name company to continue to charge whatever they want for the brand-name drug.

According to a report by consumer interest group U.S. PIRG, the Federal Trade Commission (FTC) has said that “as many as 142 brand-name drugs have been delayed by pay-for-delay arrangements between drug manufacturers since 2005.” Some of the drugs listed are AndroGel, manufactured by Solvay Pharmaceuticals and Abbott Laboratories , Adderall XR, manufactured by Shire, Lipitor, manufactured by Pfizer , and, of course, Nexium, manufactured by AstraZeneca.

This particular trial is the first of its kind. Last year the U.S. Supreme Court ruled in the Federal Trade Commission v. Actavis, Inc. , Et Al., essentially stating the FTC can sue drug companies for possible antitrust violations. In the case, the FTC stated that Solvay Pharmaceuticals, the company that holds the patent on testosterone gel AndroGel, paid Actavis to delay its generic version.

Although there is some debate as to whether these deals are illegal on the face of it, the Supreme Court ruling indicated it was unlawful restraint of trade. The original court ruling was a 5-to-3 vote.

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