OTC Drugmaker Says BioZone Breached Cold Meds Contract
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Law360, New York (March 20, 2012, 1:38 PM ET) -- An over-the-counter drug manufacturer sued BioZone Laboratories Inc. in Maryland federal court Monday, alleging the research and development company breached its contract by providing worthless cough and cold drugs that failed to meet government standards.
Aphena Pharma Solutions – Maryland LLC paid BioZone several hundred thousand dollars to develop 14 private-label over-the-counter cough and cold products — equivalent to drugs like Robitussin or Nyquil — which Aphena would manufacture, package and sell to national chain drugstores and supermarkets, according to the complaint.
Although BioZone claimed it would ensure the drugs conformed to product specifications and would oversee regulatory compliance, an Aphena audit of BioZone discovered the company had neither sufficient experience nor expertise designing cough and cold products and was not meeting U.S. Food and Drug Administration regulations for the product development packages Aphena paid for, the suit says.
After the audit, Aphena recalled all of the drugs manufactured using BioZone's methods and formulations, preventing Aphena from fulfilling contracts it had entered to sell the drugs and leaving idle manufacturing and packaging lines in which Aphena invested for the new products, according to the complaint.
Aphena is asking for actual consequential and incidental damages from BioZone for its alleged misconduct as well as punitive damages and damages for harm to reputation and loss of goodwill, according to the suit.
Looking to manufacture private-label OTC drugs for the first time, Aphena received assurances from BioZone that the company could handle
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