$500 million penalty, WASHINGTON (AP) — A subsidiary of India's largest pharmaceutical
company has agreed to pay a record $500 million in fines and penalties
for selling adulterated drugs and lying to federal regulators in a case
that is part of an ongoing crackdown on the quality of generic drugs
flowing into the U.S.
Federal prosecutors said Monday the guilty plea by Ranbaxy USA
Inc. represents the largest financial penalty against a generic drug
company for violations of the Federal Food, Drug and Cosmetic Act, which
prohibits the sale of impure drugs.
It concludes a years-long federal investigation into Ranbaxy's
manufacturing deficiencies. The Food and Drug Administration had earlier
barred from Ranbaxy from importing more than 30 different drugs made at
factories in India and, in 2011, struck a deal that required the
company to ensure that data on its products is accurate, undergo extra
oversight from a third-party and improve its drug making procedures.
The subsidiary of Ranbaxy Laboratories Limited has agreed to
plead guilty to criminal charges and to resolve civil claims with all 50
states and the District of Columbia. The company had set aside $500
million to cover potential criminal and civil liability.
It admitted as part of the deal that it sold impure drugs
developed at two manufacturing sites in India. Prosecutors said the
batches of adulterated drugs included generic versions of an antibiotic
and other medications used to treat a severe type of acne, epilepsy and
nerve pain.
It's not known whether the problems with the drugs led to any
health issues. The problems were largely revealed by a whistleblower in a
federal lawsuit filed in Maryland in 2007. The federal allegations
against the company make no claims that the drugs, whose strength,
purity or quality differed from the specifications, harmed anyone.
The company admitted to a wide range of deficiencies, including
improperly storing drug samples that were waiting to be tested,
continuing to sell a medication in the U.S. even after it had failed
purity tests and delaying a voluntary recall of medication that it knew
would not maintain its expected its expected shelf life.
Ranbaxy also admitted making false statements to the FDA in 2006
and 2007 annual reports about dates of tests that are designed to detect
drug impurities and determine appropriate storage conditions. In some
cases, the tests were done weeks or months after the company said they'd
been performed. Or the tests were done on the same day — or within days
of each other — instead of months apart, the prescribed interval.
The company said it fully cooperated with the investigation,
which it said involved actions from several years ago, and expects
"future growth in the U.S. and around the world with a robust pipeline
of important products."
"While we are disappointed by the conduct of the past that led to
this investigation, we strongly believe that settling this matter now
is in the best interest of all of Ranbaxy's stakeholders; the conclusion
of the DOJ investigation does not materially impact our current
financial situation or performance," Ranbaxy CEO and managing director
Arun Sawhney said in a statement.
The company had faced scrutiny in recent years. Apart from the
federal investigation, Ranbaxy in November halted production of generic
cholesterol drug Lipitor while it investigated how tiny glass particles
got into dozens of recalled batches. The FDA determined that the risk to
patients was very low.
The case comes as federal regulators and prosecutors focus
attention on the quality of ingredients of generics and other drugs
manufactured overseas, said Alan Coukell, an expert on drug safety at
The Pew Charitable Trusts. He said the 2008 deaths linked to tainted
heparin, a blood thinner produced in China, served as a "wake up call"
about just how much of the nation's drug supply comes from overseas.
"Over the last few years, the FDA and others have been
increasingly focused on the risks associated with global drug
manufacturing. The agency now has new authority and new resources which
should result in an increased scrutiny on the highest-risk facilities,"
he said.
The company agreed as part of Monday's deal to a fine and
forfeiture of $150 million as well as an additional $350 million penalty
to settle civil claims that it submitted false statements to Medicaid,
Medicare and other government health care programs. About $49 million of
that penalty will go to a former Ranbaxy executive, Dinesh Thakur, who
acted as a whistleblower by filing a federal lawsuit accusing the
company of knowingly submitting false information to the Food and Drug
Administration, prosecutors said.
Thakur said in a statement that the company had been notified of
the problems, and "when they failed to correct the problems, it left me
with no choice but to alert healthcare authorities."
"He was the source, the original source, of the information to
the government that ultimately led to the government's earlier actions,"
said Andrew Beato, one of Thakur's lawyers.
05/13/2013 21:09
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