For long at the receiving end, Ranbaxy Laboratories Ltd has chosen to go on the offensive against the United States Food and Drug Administration (USFDA), suing the US regulator for revoking tentative approvals given to it six years ago to launch copies of heartburn drug Nexium and antiviral drug Valcyte.
In its decision to revoke the approvals, the USFDA had also stripped the Gurgaon-headquartered company’s six-month market exclusivity for the launch of Valcyte.
Earlier this month, Ranbaxy had said that the USFDA had revoked approvals for the two drugs saying that its original decision was “in error” because of the compliance status of the company’s manufacturing facilities.
“Ranbaxy is disappointed with this development and is actively evaluating all available options to preserve its rights,” the drugmaker had then said.
The company’s Indian plants have all been banned from exporting drugs to the US, its largest market.
‘Arbitrary decision’In its petition before the court, Ranbaxy is reported to have said that its constitutional rights had been violated and that the FDA had exceeded its authority. The company added that the decision was “arbitrary, capricious, and otherwise contrary to law”, and needed to be immediately vacated.
Though foreign generic and innovative drugmakers routinely sue the US regulator, in Ranbaxy’s case it could well be a first for an India-based company, said DG Shah of the Indian Pharmaceutical Alliance, a body of large Indian drug companies.
On whether the decision to take on the US establishment could adversely impact Ranbaxy, Shah said the courts operate independently and so do the different arms of the US regulator.
The US regulator did not comment on the issue. But Ajaz S Hussain, former USFDA official and founder of US-based consultancy Insight Advice & Solutions LLC, said: “The FDA is sued frequently; most often it (the FDA) prevails. Clearly, each case is different and I have not yet reviewed the subject complaint.”
Dinesh Thakur, the whistle-blower in the Ranbaxy case, added: “Typically, they (the companies) don’t prevail. It’s more of an effort to try and elicit a response from the FDA and understand their reasoning more than anything else...”
The development comes even as Ranbaxy is in the midst of being acquired by Sun Pharma in an estimated $4-billion deal.
Exclusive marketAnalysts had expected generic Nexium to contribute about $150 million to Ranbaxy’s revenue in the first six months of market exclusivity, while Valcyte was expected to bring in between $40-50 million.
“While the case is the first of its kind, the outcome will be very important for Ranbaxy, as these drugs were expected to gross good revenue and profitability for the company,” said Sarabjit Kour Nangra, Vice-President Research, Pharma, Angel Broking.
Ranbaxy has been in the eye of a regulatory storm ever since the USFDA first raised questions about its manufacturing facilities in 2006.
The company had to pay $500 million in fines in 2013 after being found guilty on seven counts, including selling adulterated drugs.
On Tuesday, Ranbaxy’s shares closed 2.09 per cent lower on the BSE, at ₹628.75.