Judge Recommends Ranbaxy Motion to Dismiss RICO and Antitrust Claims be Denied

BOSTON – Today, Magistrate Judge Kelley recommended that Ranbaxy and Sun’s motion to dismiss the purchasers’ RICO and antitrust claims largely be denied. It dismissed claims against two entities that no longer exist.

The complaint alleges that Ranbaxy, one of the largest generic drug makers in the world, misled the FDA as to the state of its manufacturing plants in India and compliance with good manufacturing procedures, affecting least two products (generic Valcyte and generic Diovan) it produced at those facilities. This deceit, the complaint alleges, enabled Ranbaxy to wrongfully obtain tentative FDA approval, locking in very valuable regulatory exclusivities, and delaying the availability of safe, affordable medications. Only after years of delay did the FDA discover the extent of Ranbaxy’s deceit and revoke Ranbaxy’s approvals, allowing other generic drugs to reach the market.

In permitting these claims to proceed, Judge Kelley referred to Ranbaxy’s manufacturing practices as “abysmal” and noted that, “had Defendants admitted their compliance issues with regard to generic Valcyte, they would likely have forfeited their TA and first-filer status earlier than they actually did. By continuing to pursue their meritless regulatory goal, Defendants allegedly delayed the launch of competitors’ products.”

Judge Kelley held that the purchasers sufficiently alleged a RICO enterprise – between Ranbaxy, its auditor (Parexel) and its law firm (Buc & Beardsley LLP) – that sought to protect and profit from Ranbaxy’s first-to-file status for generic Diovan and Valcyte by misleading the FDA about its compliance status, the truthfulness of its ANDAs and the completeness of its ANDAs.

Judge Kelley also held that the purchasers’ antitrust claims “comfortably coexist” with the FDA’s authority to enforce the Food Drug and Cosmetic Act. 

Ranbaxy has 14 days to object.

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