US ranitidine litigation unlikely to impact Indian pharma: Analysts

Sun Pharmaceuticals, Dr Reddy's Laboratories, Perrigo and Teva have agreed to a combined settlement of $5 mn with cancer patient Joseph Bayer

The US litigation around antacid drug ranitidine is unlikely to have any material impact on Indian pharma companies at this stage, feel analysts.

According to media reports, Sun Pharmaceuticals, Dr Reddy’s Laboratories, Perrigo and Teva have agreed to a combined settlement of $5 million with cancer patient Joseph Bayer. This is the first settlement in the three-year old ranitidine litigation.

In September 2019, several companies including British drugmaker GlaxoSmithKline Pharma (GSK) and Hyderabad-based Dr Reddy's Laboratories (DRL) had withdrawn their ranitidine products from the market following the US Food and Drug Administration (USFDA) raising concerns around the presence of a cancer-causing substance in some ranitidine products.

Following this, ranitidine manufacturers in different countries (including the US, EU and India) were asked by the respective drug regulators to conduct tests for determining the concentration of an impurity (N-nitrosodimethylamine or NDMA) in the ranitidine they supply.

The order came in the wake of a citizen petition filed by Valisure (a US pharmacy that chemically validates all the products it delivers to end-users). NDMA is a known environmental contaminant and found in water and foods, including meats, dairy products, and vegetables. FDA’s guidelines stated 0.32 parts per million or 96 nanograms of NDMA daily were acceptable.

Kunal Randeria, analyst with Edelweiss Securities, said: “We do not see any material risk to Indian pharma companies at this stage. Glenmark (23 per cent share) and Strides (27 per cent) are unlikely to be impacted as an FDA test showed NDMA to be within acceptable levels.”

He added, “Sun Pharma (2.5 per cent peak share) and Dr Reddy’s (4 per cent peak share) had relatively lower exposure in prescription markets. While the over-the-counter (OTC) contribution is unknown, we believe annual sales are less than $10-12 million.”

DRL, however, has over 250 lawsuits, and this is the first settlement, Edelweiss noted.

Zantac (ranitidine), a 40-year-old medication first launched by GSK, had attained sales of $1 billion in less than five years of its launch. It went generic in the late-1990s and there were over 20 generic launches over the years.

“Eventually, with a laboratory analysis, it published that manufacturers such as Dr Reddy’s, Aurobindo, Amneal, Sanofi, and Sandoz had NDMA levels above guidelines, while Strides and Ajanta had NDMA within acceptable levels. The market size could be around $100 million for prescription and $150 million for OTC,” Edelweiss said.

Big pharma companies like GSK, Pfizer, Boehringer have not settled or paid anything to any plaintiff, the brokerage said.

Brokerages do not foresee any big-ticket settlements as FDA laboratory results show that not all manufacturers had NDMA above acceptable levels. Thus, their liability becomes virtually nil.

The FDA and EMA have independently concluded that there is no evidence of a causal association between ranitidine therapy and the development of cancer. Australia’s TGA stated, “If someone were to take a ranitidine tablet for their entire life for 70 years, every day, then the risk of cancer may go up by about one in 100,000.”

Meanwhile, Nifty Pharma was down by 0.34 per cent per cent primarily owing to street concerns around settlement charges around the ranitidine litigation.