Jury Sides With AstraZeneca and Ranbaxy in Nexium Pay-for-Delay Case

A jury found that AstraZeneca and Ranbaxy didn’t conspire to delay launching a generic version of the heartburn drug Nexium.

Plaintiffs in the multi-district case, consolidated in Massachusetts district court, alleged that AstraZeneca paid money to Ranbaxy, Teva and Dr. Reddy’s as early as 2008 in exchange for pushing back generic entry until May 2014 and dropping patent legal challenges.

Teva and Dr. Reddy’s both reached settlements earlier this year with the plaintiffs, which included direct purchasers such as Kroger, Safeway, Walgreen, Rite-Aid and various state health plans and union or pension healthcare funds.

AstraZeneca denied the allegations, and further argued that the plaintiffs couldn’t accurately prove if any delay would lessen competition in any relevant market.

Proving a deal has hurt competition is a key hurdle that such pay-for-delay plaintiffs have to overcome, Brian Malkin, an attorney with McGuireWoods, said.

Plaintiffs would need to know what would have happened if the deal didn’t exist, he said as an example. The plaintiffs in this scenario were making an argument that Ranbaxy deliberately was stalling in getting approval of the product to get money as a payout.

But Malkin said if Ranbaxy could have launched Nexium (esomeprazole magnesium) earlier, it probably would have. Ranbaxy had first-to-file exclusivity but lost that status as a result of various manufacturing problems. A generic Nexium has yet to reach the market.

This case illustrates the difficulty of winning a pay-for-delay case, said Seth Silber, an attorney with Wilson Sonsini Goodrich & Rosati. But he doubts the high bar will diminish the number of pay-for-delay lawsuits.

“The dollars at issue, especially for big drugs like Nexium, are still very enticing for plaintiffs to go after,” he said.

Earlier this year a federal judge dismissed a lawsuit that alleged Pfizer and Ranbaxy reached an illegal pay-for-delay deal on the cholesterol drug Lipitor (atorvastatin calcium). That case was sacked by a lack of cash payment between Pfizer and Ranbaxy.

An attorney representing the plaintiffs in the Nexium case did not return a request for comment as of press time on whether they will appeal the verdict. The case was one of the first to go to a jury since the Supreme Court’s 2013 FTC v. Actavis antitrust decision.

AstraZeneca still has two cases pending in Pennsylvania state court brought by numerous purchasers with similar allegations, spokeswoman Michele Meixell said. — Robert King

Originally appeared in Drug Industry Daily, the pharmaceutical industry’s number one source for regulatory news and information. Click here for more information.