Litigation Update: Valsartan Manufacturers to Face Fraud Claims

by | Feb 5, 2021

On January 29, the judge presiding over the Valsartan litigation, US District Judge Robert B. Kugler refused to dismiss claims of fraud brought by the consumers against the defendant manufacturers in three master complaints; similar claims against wholesalers and pharmacies, however, will be thrown out without prejudice.

In an effort to dismiss the claims that included those for fraudulent misrepresentation, fraudulent concealment and others, defendant manufacturers Teva Pharmaceuticals USA Inc., Zhejiang Huahai Pharmaceutical Co., Ltd, Hetero Drugs, Limited, Aurobindo Pharma, Ltd, Torrent Pharmaceuticals, Ltd and Mylan Pharmaceuticals argued that the consumers had not proved that the manufacturers had knowledge that the products were contaminated with carcinogens. They argued that the consumers conceded the defendants’ lack of knowledge when they claimed that had the manufacturers adhered to FDA guidelines they would have discovered any contamination of the drugs at issue.

The fraud claims brought by the consumers focus on the fact that the manufacturers misrepresented that the generic valsartan drugs were therapeutically equivalent to the approved drug and that they were properly branded. Specifically, the consumers contend that the presence of the carcinogens known as N‐nitrosodimethylamine and N‐nitrosodiethylamine in the generic equivalents rendered them non- therapeutic, a fact that was further misrepresented in promotional materials for the drugs.

The fraud claims against wholesalers and pharmacies Cardinal Health, McKesson Corporation, AmerisourceBergen Corporation, CVS Health, Walgreens Boots Alliance, Inc., Express Scripts, Inc., OptumRx, Walmart, Inc., the Kroger Co., Rite Aid Corp., Albertsons Companies, LLC., and Humana Pharmacy, Inc. were dismissed on the basis that the allegations were too general to establish that those defendants reasonably knew they were distributing tainted products.

Judge Kugler upheld strict failure to warn and warranty claims against the manufacturer, wholesaler and pharmacy defendants.

By way of comparison, although Zantac and Valsartan both involve NDMA contamination, the Valsartan cases involve contamination during the manufacturing process that occurred primarily in China. Target defendants in Valsartan include API manufacturers, product manufacturers, and re-packagers.  Theories of recovery include manufacturing defect, failure to warn against the generic manufacturers, and design defect against the generic manufacturers (on the premise that the manufacturers deviated from the original design).

By contrast, the issue in Zantac (Ranitidine) is that because of the inherent instability of the ranitidine molecule itself it may break down into the carcinogenic NDMA (possible causes include improper storage in high heat conditions or when it is combined with nitrite).

The lawsuits allege that the defendants and manufacturers of Zantac (Boehringer Ingelheim Pharmaceuticals, Inc.; GlaxoSmithKline LLC; Pfizer Inc.; Sanofi-Aventis U.S. LLC; Sanofi US Services Inc.; and Chattem, Inc.) were aware that the active ingredient in the medication, ranitidine, exposed plaintiffs to NDMA (a carcinogen known as N-nitrosodimethylamine). Allegations include improper labeling and failure to warn and design defect.

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