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AstraZeneca and Ranbaxy Laboratories escape billion dollar fines thanks to a rule in favor of the two pharmaceutical companies passed by a Federal Jury in Massachusetts. The jury ruled out allegations that the organizations postponed the dispatch of a generic version of the Nexium drug, saving the organizations from potentially paying billions in damages.
AstraZeneca’s Nexium is a “proton-pump inhibitor used to treat heartburn as well as other stomach and esophagus conditions”.
Ranbaxy applied for an abbreviated new medication at US Food and Drug Administration (FDA) in 2005, as it tried to create generic copycats of the medication. After that, AstraZeneca started a lawsuit against the organization for encroaching Nexium’s licenses.
Engross retailers, insurance companies and distributors forwarded the claim in 2012. According to them, after a deal between the two companies, Ranbaxy received nearly one billion dollar to postpone Nexium’s generic release.
In 2013 U. S. Supreme Court stated this type of ‘pay-for-delay’ agreements can violate antitrust regulations. ‘Pay-for-delay’ means branded drug makers reward generic drug producers if they don’t launch the generic equivalent of a labeled medicine.
The rule given in today’s case is actually a premiere, being the first settlement approved by a jury, after 2013 Supreme Court’s ruling.
A couple of other companies were also accused in the original trial of similar deals regarding AstraZeneca’s Nexium. However, Dr Reddy’s and Teva Pharmaceutical Industries generic drug producers agreed to a settlement with the offenders.
Headquartered in UK, AstraZeneca has a wide number of branches in Massachusetts, generally in Waltham. AstraZeneca noted that the organization never thought the plaintiffs’ claims had a solid base.
AstraZeneca’s press release after the verdict stated the company’s satisfaction regarding the jury’s decision and reemphasized the claims did not have a solid base.
Interestingly, Ranbaxy’s approval of retailing generic versions of Nexium in the US was recently revoked by the US Food and Drug Administration. The FDA said that the decision was made based on some issues related to the company’s manufacturing system.
The US Federal Trade Commission said pay-for-delay bargains take about $3.5 billion every year off consumers’ pockets.
Two different lawsuits against the same four companies over the Nexium settlements are pending in Pennsylvania state courts. Those cases are not influenced by Friday’s decision.
