Sun Pharma to pay $485 million to resolve Ranbaxy antitrust cases
- Law Firms
- Sun Pharma signs binding term sheet to settle class actions
- Proposed settlement comes ahead of an April 5 trial
(Reuters) - Sun Pharmaceutical Industries Ltd on Wednesday said it had agreed to pay $485 million to resolve class action lawsuits alleging the Indian drugmaker's subsidiary Ranbaxy engaged in an anticompetitive scheme to delay the launch of generic drugs by rivals.
The settlement came ahead of an April 5 trial in Boston federal court over claims by generic drug buyers who said they were owed billions of dollars for being overcharged as a result of a fraud Ranbaxy Laboratories perpetrated on U.S. regulators.
Sun in a regulatory filing said it had signed a binding term sheet to resolve lawsuits by direct purchasers of the drugs, including drug wholesalers, and indirect purchasers, such as health plans, accusing Ranbaxy of racketeering and antitrust violations.
Sun, which acquired Ranbaxy in 2014 and was represented by Jay Lefkowitz of Kirkland & Ellis, said it disputes the claims and agreed to the deal to "avoid uncertainty."
The deal requires the approval of U.S. District Judge Nathaniel Gorton, who has overseen the litigation since 2019. He has scheduled a status conference for Thursday.
Kristen Johnson, a lawyer for the direct purchasers at Hagens Berman Sobol Shapiro, had no comment.
In the lawsuits, drug buyers accused Ranbaxy of wrongly obtaining tentative approvals from the U.S. Food and Drug Administration in 2007 and 2008 to produce generic versions of Novartis AG's blood pressure drug Diovan, Pfizer's acid reflux medication Nexium and Genentech's antiviral drug Valcyte.
Under the federal Hatch-Waxman Act, the first company to apply to make a generic drug enjoys a 180-day period of marketing exclusivity.
But the plaintiffs said Ranbaxy locked in those exclusive periods by misleading the FDA about its compliance with current good manufacturing practices, when its processes were grossly inadequate and had suffered several failures.
The FDA granted final approval to the Diovan generic in 2014. But following regulatory scrutiny, the FDA revoked its tentative approval for the generic Nexium and Valcyte.
The plaintiffs said Ranbaxy's actions delayed the release of rivals' generic medications and caused drug buyers to sustain massive overcharges.
The direct purchasers claimed up to $7.1 billion in damages, which would be tripled under RICO and federal antitrust law, while the end payors claimed up to $3.3 billion in damages, according to court filing on Friday.
The case is In re Ranbaxy Generic Drug Application Antitrust Litigation, U.S. District Court for the District of Massachusetts, No. 19-md-02878.
For direct purchasers: Thomas Sobol, Gregory Arnold and Kristen Johnson of Hagens Berman Sobol Shapiro; Steve Shadowen, of Hilliard & Shadowen; John Radice of Radice Law Firm; Paul Slater of Sperling & Slater; Joseph Meltzerof Kessler Topaz Meltzer & Check; Kenneth Wexler of Wexler Wallace; Sharon Robertson of Cohen Milstein Sellers & Toll; and Linda Nussbaum of Nussbaum Law Group.
For indirect purchasers: Gerald Lawrence of Lowey Dannenber and James Dugan of The Dugan Law Firm
For Ranbaxy: Jay Lefkowitz, Devora Allon, Robert Allen, and Kyla Jackson of Kirkland & Ellis
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