U.S. Bans Import of Ranbaxy Drugs From Indian Plant

Citing concerns about drug quality, the Food and Drug Administration on Monday announced a ban on imports of any products made at the generic drug maker Ranbaxy’s newest factory in India.

The move is the third time Ranbaxy imports have been blocked in the United States since 2008.

The factory in Mohali, in the Punjab region of India, is not currently producing any products sold in the United States, according to the Food and Drug Administration.

But the recently renovated facility was to be the centerpiece of Ranbaxy’s comeback from years of major manufacturing lapses, so the news that it, too, would now be prohibited from making drugs destined for the United States sent investors fleeing on Monday.

Ranbaxy’s stock fell by 30 percent, to 318.5 rupees ($4.99), in Mumbai on Monday and financial analysts predicted the development could slow the introduction of several products, including the generic version of the best-selling blood pressure drug Diovan, which has already been delayed for a year. Ranbaxy is a subsidiary of the Japanese pharmaceutical company Daiichi Sankyo.

The F.D.A. said it decided to issue the ban after agency inspectors uncovered significant manufacturing violations at the Mohali facility in September and December of last year. It said the company would be required to hire an outside expert to inspect the Mohali factory and certify that it met the agency’s standards before the restrictions were lifted.

A spokesman for Ranbaxy declined to comment on Monday. Ranbaxy officials have said they are awaiting further details from the F.D.A.

Ranbaxy has been operating under a federal consent decree with the F.D.A. since last year. In May, the company pleaded guilty to federal drug safety violations as part of a $500 million settlement that was the largest in history involving a generic manufacturer and drug safety. As part of the settlement, Ranbaxy admitted that it had failed to conduct proper safety and quality tests of drugs made at its Indian plants. Two other Ranbaxy plants have been operating under an import ban since 2008.

In spring 2012, Ranbaxy began exporting generic Lipitor to the United States that was manufactured at Mohali, a facility the company said in a news release at the time was “equipped with the latest state-of-the-art technology.” But late last year, the company halted all production of generic Lipitor after tiny pieces of glass were found in the tablets. When sales resumed in March, the drug was being manufactured at the company’s Ohm Laboratories facility in New Jersey.

Despite the Lipitor setback, some investors had held out hope that the company would make a comeback by selling exclusive copies of best-selling drugs, many of them manufactured at the Mohali facility.

Several analysts speculated that the F.D.A’s action could further delay the debut of generic Diovan, a hypertension drug by Novartis that lost its patent protection one year ago. Ranbaxy has the exclusive right to sell the generic version of the drug for six months, but the F.D.A. has not given final approval. A competing generic company, Mylan, unsuccessfully sued the F.D.A. last year to force the agency to revoke Ranbaxy’s exclusive rights.

Ranbaxy and the F.D.A. have not said where generic Diovan would be manufactured, but the analysts Nitin Agarwal and Param Desai of IDFC Securities in India said in a note Monday that the ban on the Mohali plant was likely to put further pressure on Ohm Laboratories, which they said was now Ranbaxy’s only manufacturing plant selling products to the United States market. “The facility is already running at full capacity,” they wrote in the note, in which they also downgraded the stock to underperform. “The alert on Mohali facility will hurt future approvals.”

Supreme Court Eases Import and Sale of Copyrighted Products

WASHINGTON — In a pair of decisions issued on Tuesday, the Supreme Court made it easier to import textbooks and other copyrighted products from abroad and made it harder for plaintiffs in class-action suits to stay out of federal court.

The copyright case, Kirtsaeng v. John Wiley & Sons, No. 11-697, arose from the activities of a Thai student who attended Cornell University and the University of Southern California. The student, Supap Kirtsaeng, helped pay for his education by selling textbooks that his friends and relatives had bought in Thailand at low prices and shipped to him.

A publisher of some of the textbooks, John Wiley & Sons, sued Mr. Kirtsaeng for copyright infringement, and it won $600,000 in the lower courts. In a 6-to-3 decision, the Supreme Court threw out that award and ruled that imported copyrighted goods were subject to the same rules as goods bought in the United States: owners of particular copies can do what they like with them.

In legal jargon, the court applied the first-sale doctrine to copyrighted materials from abroad. Under that doctrine, buyers of books, records and other copyrighted goods may lend or sell them as they wish.

The decision will have consequences for all manner of products, including books, records, art and software. Industry groups had told the justices that a decision permitting copyrighted foreign goods to be sold in the United States would limit their ability to sell materials more cheaply in developing markets and result in higher prices overall.

The case turned on a phrase in the Copyright Act, which limits the first-sale doctrine to works “lawfully made under this title.” The lower courts said that textbooks manufactured outside the United States could not have been made under American law and so remained subject to the control of the owner of the copyright.

Justice Stephen G. Breyer, writing for the majority, said the phrase was not concerned with geography. He said he doubted “that Congress would have intended to create the practical copyright-related harms with which a geographical interpretation would threaten ordinary scholarly, artistic, commercial and consumer activities.”

Much of his opinion concerned the potential consequences of a contrary ruling, one that he said “could prevent a buyer from domestically selling or even giving away copies of a video game made in Japan, a film made in Germany or a dress (with a design copyright) made in China.”

He buttressed the point by surveying supporting briefs from libraries, used-book dealers, technology companies and museums, all of which warned that allowing copyright suits over goods imported from abroad would have pernicious consequences. Libraries could be barred from lending foreign books, the briefs said, and museums from displaying foreign art.

In their own briefs, Wiley and its allies discounted this “parade of horribles” as unrealistic. Justice Breyer responded, “We are not so sanguine.” The possible practical problems of ruling the other way, he said, “are too serious, too extensive and too likely to come about for us to dismiss them as insignificant — particularly in light of the ever-growing importance of foreign trade to America.”

An aside in a 1998 decision suggested that the court would rule differently on Tuesday, but Justice Breyer said the court was free to ignore a statement made in passing. “Is the court having once written dicta calling a tomato a vegetable bound to deny that it is a fruit forever after?” he asked.

Chief Justice John G. Roberts Jr. and Justices Clarence Thomas, Samuel A. Alito Jr., Sonia Sotomayor and Elena Kagan joined the majority opinion.

Justice Ruth Bader Ginsburg, joined by Justice Anthony M. Kennedy and, for the most part, Justice Antonin Scalia, dissented, saying the majority’s “bold departure from Congress’s design” was “stunning.” She added that there were many ways to address “the anticipated horribles” that Justice Breyer had outlined.

“It should not be overlooked,” she wrote, “that the ability to prevent importation of foreign-made copies encourages copyright owners such as Wiley to offer copies of their works at reduced prices to consumers in less developed countries who might otherwise be unable to afford them.”

In the class action case, Standard Fire Insurance Company v. Knowles, No. 11-1450, the court unanimously ruled that plaintiffs’ lawyers cannot avoid the requirements of a federal law that allows some kinds of class actions to be moved from state to federal court by promising to accept less money than the class might be owed.

The law, the Class Action Fairness Act of 2005, allows defendants to move some big class actions out of state courts thought to be hostile to business interests as long as the proposed class has more than 100 members, at least one of them is from a different state than a defendant and the amount at stake is more than $5 million.

The case concerned the Standard Fire Insurance Company, which is based in Connecticut and was accused in a proposed class action filed in Arkansas of failing to make full reimbursements for property damage claims. The plaintiffs’ lawyers stipulated that they would limit to $5 million the amount sought by the lead plaintiff and the class he sought to represent.

Justice Breyer, writing for the court, said the tactic would not work. “Stipulations must be binding,” he wrote. But, he said, “a plaintiff who files a proposed class action cannot legally bind members of the proposed class before the class is certified.”