Dr. Reddy’s Strikes Deal With End Payers in Broader Nexium Pay-for-Delay Lawsuit

Dr. Reddy’s Laboratories has settled a class-action lawsuit over its alleged role in delaying generic entry of AstraZeneca’s heartburn drug Nexium in return for assisting plaintiffs in their case against AZ and the remaining generics manufacturer defendants.

Without admitting culpability in the alleged scheme, Dr. Reddy’s will be required to make its employees available to plaintiffs in their trial preparation against AZ and Teva and Ranbaxy, according to the proposed settlement filed in Massachusetts federal court this week.

The settlement agreement must still be approved by the judge for Dr. Reddy’s to be fully off the hook in the antitrust case. The trial began last Monday.

The union health funds that brought the suit say in court filings that the settlement with Dr. Reddy’s will bolster their remaining case. The plaintiffs claim that AZ settled separate ANDA challenges from the various generics makers as early as 2008 with illegal deals to put off generic Nexium until this year, thus forcing them to shell out far more for the more costly brand version for their members. 

Ranbaxy was the first-to-file against Nexium and also the first to settle with AZ in 2008. That deal allowed AZ to create a bottleneck blocking further ANDAs from approval, even as they continued to pursue their challenges in court, Dr. Reddy’s said in a court filing. Dr. Reddy’s also noted that it finally settled its own patent infringement lawsuit in January 2011 with a promise not to launch its own version until May 27 of this year.

No generic Nexium has yet hit the market thanks to rampant approval delays plaguing first-filer Ranbaxy over FDA findings of manufacturing quality issues. — Bryan Koenig

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