Ranbaxy sues US FDA for revoking drug approvals

FDA had cancelled Ranbaxy's approvals to launch generic Nexium, Valcyte

Ranbaxy Laboratories Ltd has sued the US Food and Drug Administration (FDA) for revoking approvals granted to the firm to launch copies of two drugs including AstraZeneca Plc's heartburn pill Nexium, court documents showed.

The FDA told Ranbaxy this month that it believed its decisions to grant the company tentative approvals for copies of Nexium and Roche AG's antiviral Valcyte were "in error", after it found that Ranbaxy's plants at the time were not compliant with the FDA's manufacturing quality standards.

The agency also stripped Ranbaxy of a six-month market exclusivity on the launch of generic Valcyte.

In the suit filed in the District Court for the District of Columbia, Ranbaxy said the FDA's move violated constitutional rights, exceeded the agency's statutory authority, and was "arbitrary, capricious, and otherwise contrary to law."

"FDA has no power to correct an alleged mistake it made six years ago," Ranbaxy said in the court filing dated Nov 14 and seen by Reuters on Tuesday.

Ranbaxy, which is being acquired by larger local rival Sun Pharmaceutical Industries Ltd for $3.2 billion, has been hit by a series of regulatory sanctions in the past year due to poor production practices at its India-based plants.

The company, which was expected to hugely benefit from the launch of the generic versions of the two drugs, has said it was working on resolving issues at the India plants, all of which are banned from exporting to the United States, its largest market.

Ranbaxy did not immediately respond to a request for comment, while a spokeswoman for FDA did not reply to an email seeking comment outside of US business hours.

Analysts 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 $40 million to $50 million.

After pulling Ranbaxy's tentative approvals, the FDA granted final approval to another Indian generic drugmaker Dr Reddy's Laboratories Ltd and US-based Endo International Plc to launch copies of Valcyte.

Ranbaxy in the lawsuit also requested the court to restrain FDA from approving any other generic versions of Valcyte or Nexium until its six-month exclusive periods on the launch of the drugs has ended.