Ranbaxy pays $500m to settle FDA fraud charges

Ranbaxy Indian generics giant Ranbaxy has agreed to pay a $500m fine to settle FDA charges of fraud – covering unsafe practices – at two of its factories.

The fine, the largest ever paid by a generic drug manufacturer in the US, comprises $150m for criminal charges and $350m for civil claims.

The offences relate to documents submitted to the Medicare and Medicaid programmes between 2003 and 2010, which Ranbaxy acknowledges made false claims regarding certain products.

FDA inspectors found that drugs manufactured at two Ranbaxy factories in India did not meet safety requirements.

The generic drugs in question included an acne drug (isotretinoin), an epilepsy and nerve pain drug (gabapentin) and antibiotics including amoxicillin.

Ranbaxy manufactured, distributed and sold these drugs when their strength, purity or quality was not that specified by the product literature or the FDA’s approved formulation.

The company acknowledged that inspections of its factories had found evidence of inadequate product testing and record-keeping, as well as deviations from good manufacturing practice.

It also admitted making “false, fictitious and fraudulent” statements to the FDA in annual reports filed in 2006 and 2007 regarding the dates of stability tests conducted on antibiotics.

In 2008, the FDA banned Ranbaxy from selling about 30 drugs in the US. In 2009, it halted reviews of certain Ranbaxy products.

Ranbaxy’s former owners, the family who founded it, have repudiated what it claims are implicit accusations of corruption levelled at it by the company’s present management.

Dinesh Thakur, Ranbaxy’s former Global Head of Research Information and Portfolio Management, will receive $48.6m of the settlement as a whistleblower.