How A Small Hyderabad Firm Found Itself In A U.S. Lawsuit Against Big Pharma

It’s not uncommon to see headlines about large pharmaceutical companies being sued in the US—after all, the healthcare industry walks the tightrope between profit and saving lives.

However, few may have expected Hyderabad-based Natco Pharma, to be dragged into a case that involves pharma giants like Bristol-Myers Squibb and Teva International, the formula for a cancer drug and the alleged hoodwinking of the U.S. judicial system.

What Happened: Blue Cross and Blue Shield of Louisiana recently filed a class action lawsuit against Bristol-Myers Squibb, saying the pharma company unlawfully extended how long it could exclusively market its anti-cancer drug, Pomalyst, which is used to treat multiple myeloma and AIDS-related Kaposi sarcoma.

Bristol Myers Squibb acquired Pomalyst when it purchased Celgene for $74 billion (₹6.15 lakh crore) in 2019. In 2022, Pomalyst generated nearly $3.5 billion (₹30,000 crore) in revenue, marking a 5% increase from the previous year.

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The Allegations: In a 151-page complaint, the health maintenance organisation has accused Bristol-Meyers Squibb and unit Celgene of patent fraud, alleging the firm misrepresented and hid data about Pomalyst’s properties, formulations, and uses, leading to several entities and purchasers to allegedly overpay for the drug.

The lawsuit also contends that Bristol-Meyers Squibb and Celgene abused the federal judicial system by launching “sham lawsuits” against generic companies trying to enter the U.S. market for pomalidomide, which is the generic formulation sold under the brand name Pomalyst. The Pharma player has also been accused of anti-competitive practices, including paying off competitors to drop legal challenges to pomalidomide patents.

That’s where Natco comes into the picture. The Indian firm has been named as a defendant in the lawsuit alongside Teva, Aurobindo and Eugia. The lawsuit alleges that these payments to competitors, although cloaked in secrecy, could run into to nine-figure sums for each.

The payments made to each firm “exceeds the net revenues any one of the generic companies could hope to earn even if it had prevailed in the patent litigation," according to the legal complaint.

For its part, Natco has said the claims are “without merit”, asserting the fact that its partner, Breckenridge Pharmaceutical, was the licensed distributor of the generic formula in the US.

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