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Pharmaceuticals

Drug Firms Prevail In Antitrust Trial

Verdict: AstraZeneca and Ranbaxy win in Nexium pay-for-delay case

by Glenn Hess
December 15, 2014 | APPEARED IN VOLUME 92, ISSUE 50

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Credit: Shorelander
Nexium is one of AstraZeneca’s top-selling medicines.
09250-notw3-nexiumcxd.jpg
Credit: Shorelander
Nexium is one of AstraZeneca’s top-selling medicines.

A deal between AstraZeneca and Ranbaxy Laboratories that resolved a patent dispute involving the launch of a cheaper, generic version of the blockbuster heartburn drug Nexium did not violate federal antitrust laws, a jury in Massachusetts has ruled.

Bringing the case were pharmacies, wholesalers, insurers, and individual consumers who claimed they were overcharged billions of dollars as the result of a 2008 settlement that ended a patent lawsuit between the drugmakers.

The six-week trial in the U.S. District Court in Boston was closely watched. It was the first since the U.S. Supreme Court ruled last year that so-called pay-for-delay agreements can harm competition but the arrangements are not always illegal.

Manufacturers of generics often challenge the validity of patents on branded drugs years before they expire. In pay-for-delay deals, a brand-name pharmaceutical company pays a potential generics rival to abandon its patent challenge and stay off the market.

In this case, the plaintiffs claimed that Indian generics maker Ranbaxy agreed to drop its challenge to London-based AstraZeneca’s Nexium patents and delay the launch of its generic version in exchange for nearly $1 billion and other compensation. They asserted that a low-cost, generic version of Nexium could have been on the market as long ago as six years.

But the two drug companies argued that the plaintiffs failed to prove that Ranbaxy could have launched a generic Nexium sooner without the settlement. AstraZeneca says it would not have agreed to the private accord in 2008 if it had allowed Ranbaxy to sell a generic version of the drug before its patent expired in May 2014.

The 11 jurors ultimately agreed that AstraZeneca would not have granted Ranbaxy an earlier market entry date, even without the payment.

“The system worked. The jury understood the facts of the case and was not swayed by wishful thinking on the part of the plaintiffs,” says J. Douglas Baldrige, an attorney for Ranbaxy.

The suit originally targeted two other generic drug makers that struck similar deals with AstraZeneca over Nexium—Teva Pharmaceutical Industries and Dr. Reddy’s Laboratories—but both settled with the plaintiffs.

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