- U.S. retailer Meijer has filed a class action lawsuit against India's Ranbaxy, recently purchased by Sun Pharma, in district court in MA. Ranbaxy is accused of large-scale deception on its generic drug applications.
- Over the years, Ranbaxy has been accused of continually lying to the FDA about the compliance status of its manufacturing plants.
- Although Ranbaxy was not completely honest on its submission applications for generic drugs when applying to the U.S. FDA, the company was able to gain approvals along with the six-month period of exclusivity that comes with those approvals. This effectively shut other companies out of the market and set up a situation in which customers were forced to overpay by buying brand-name drugs, since the generics were not yet available.
As defendants in this lawsuit, Ranbaxy and Sun Pharma, which recently completed a $3.2 billion deal to buy the company, are in familiar territory. In 2013, Ranbaxy faced civil and criminal fines of $500 million in a settlement with the U.S. related to claims that it sold substandard drugs and also made false statements to the FDA about its adherence to quality-control standards at its manufacturing plants.
In addition, Ranbaxy has been subjected to wider scrutiny and oversight from the FDA, which has resulted in a U.S. import ban on all Ranbaxy drugs. Also, in November 2014, the FDA stripped Ranbaxy of a tentative approval of generic Valcyte, dating back to 2008.
There are several problems here. One is that the problem of lack of compliance with FDA guidance and gaps in protocol have led to a point where huge import bans make it difficult to buy generics from pharma companies in India—and India is the largest supplier of generic drugs to the U.S. In fact, at least 40% of all generics in the U.S. are from India.
In the Meijer case, the plaintiff is seeking damages and monetary relief on behalf of all direct purchasers of drugs in cases where cheaper generics were not able to be introduced due to Ranbaxy securing the approvals under allegedly dubious premises.