Aurobindo Pharma faces class action suit in US

Drug maker Aurobindo Pharma and and Emcure Pharmaceuticals are being pulled up in a Florida court for allegedly concealing information about cancer-causing agent, N- nitrosodimethylamine (NDMA) presence in metformin medicine.

MSP Recovery Claims filed the petition on April 3 in US District Court for the Southern District of Florida on behalf of similarly-situated healthcare insurers to recover payments unlawfully induced by the drug makers- Aurobindo Pharma, Aurolife Pharma, LLC and Heritage Pharmaceuticals LLC.

Metformin is the most prescribed oral pharmaceutical drug for patients with type-2 diabetes.

The petition was based on tests done by Valisure, an online pharmacy.

Valisures tests revealed that the metformin produced by Aurobindo and Heritage were contaminated with NDMA with levels between 37 and 266 ng per tablet.

As to Heritages metformin products, the NDMA present was up to 8.6 times the FDAs interim daily limit.

The Valisure, while posting the results on its website however, indicated that Aurobindo passed the FDA test for the NDMA presence.

The petition claimed that the defendants have manufactured and distributed metformin drugs throughout the United States, for which the litigants assignors paid approximately USD 124 million on behalf of their members.

The drug makers breached their express warranties with respect to their Metformin drugs because the drugs did not comply with cGMPs (Current Good Manufacturing Practices), were adulterated and contaminated, were not bioequivalent to branded drugs, and could not lawfully be sold, the petitioner alleged.

The Defendants knowingly and with an intent to defraud, concealed from Plaintiff and Class Members the material facts concerning their pervasive cGMP violations.

Interestingly, last Thursday, Aurobindo announced the calling off USD 900 million deal to acquire Sandoz Inc’s US-based generic oral solids and dermatology businesses.

This was a negative surprise because it was a highly anticipated deal which was to conclude anytime soon. It was attractive valued at 5x EBITDA along with the benefit of a significant scale up in US generic business.

Failure to get approval from the US Federal Trade Commission within the anticipated timelines was cited as the reason for the call-off.

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