Vanda Pharmaceuticals sues U.S. government over drug trade secrets

(C) Reuters. FILE PHOTO: Signage is seen outside of the Food and Drug Administration (FDA) headquarters in White Oak, Maryland, U.S., August 29, 2020. REUTERS/Andrew Kelly

By Blake Brittain

(Reuters) – Vanda (NASDAQ:VNDA) Pharmaceuticals Inc has sued the federal government in Washington, D.C., federal court over accusations that the U.S. Food and Drug Administration passed trade secrets about its schizophrenia drug Fanapt and sleep-disorder medication Hetlioz to generic competitors.

In a complaint made public Tuesday, Vanda said the agency disclosed confidential details from its applications for FDA approval to companies seeking to make generic versions of its drugs, and that it “routinely” reveals confidential information about brand-name drugs to generic drug applicants.

An FDA spokesperson said the agency does not comment on pending litigation.

The FDA approved Vanda’s antipsychotic drug Fanapt in 2009 and its circadian-rhythm regulator Hetlioz in 2014. Vanda’s lawsuit said the FDA has also approved several generic versions of the drugs.

Washington, D.C.-based Vanda earned more than $159 million from sales of Hetlioz and more than $94 million from Fanapt last year, according to a company report.

Vanda told the U.S. Court of Federal Claims that the FDA gave confidential information about Fanapt and Hetlioz, its only two drugs, to generic competitors including Lupin Ltd, Apotex Inc and Teva Pharmaceutical (NYSE:TEVA).

It accused the FDA of revealing its dissolution specifications for the drugs, which indicate how much they must dissolve after administration to be safe and effective, to other drugmakers in correspondence about their generic versions.

The company also said the FDA disclosed secret information about its Hetlioz manufacturing process to Apotex and Teva during their bids for generic approval.

Vanda accused the government of unconstitutionally taking its confidential information and violating an implied contract to keep it secret, and requested an unspecified amount of money damages.