RICO Lawsuit Claims Fraudulent Ranbaxy Audits Prolonged Generic Exclusivity

A group of indirect purchasers filed a RICO lawsuit against Indian drugmaker Ranbaxy, claiming the company cost them millions of dollars through a criminal enterprise.

Beginning in early 2006, the FDA began a series of inspections at Ranbaxy facilities that discovered serious CGMP violations, noted the lawsuit, filed in the District of Massachusetts by a group of purchasers including Blue Cross and Blue Shield of Louisiana and HMO Louisiana.

The lawsuit filed on Feb. 13 claims Ranbaxy’s lawyers and Parexel, a consulting firm they retained, entered into an agreement “structured to shield Parexel’s audit work from any FDA scrutiny” by performing nominally independent audits that were actually controlled by Ranbaxy. Using these audits, the suit alleges, the company secured tentative approvals and 180-day exclusivity for three ANDAs: Diovan, Nexium and Valcyte.