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Ranbaxy pays US$500 million to resolve US litigation Posted 24/05/2013

In what has been hailed as the largest ever settlement of its kind involving a drug safety settlement with a generics manufacturer, Ranbaxy Laboratories (Ranbaxy) pleaded guilty to violations of the Food, Drug and Cosmetics Act (FDCA) and making false statements.

Ranbaxy, which is majority-owned by Japan’s Daiichi Sankyo, pleaded guilty to felony charges and will pay US$500 million in civil and criminal fines under the settlement agreement with the US Department of Justice. The fine includes US$150 million in payments for a criminal fine and forfeiture and US$350 million in payments for civil claims.

Ranbaxy has been under investigation by the US Government since 2008 when good manufacturing practice (GMP) violations were not corrected to the satisfaction of FDA at two Indian facilities in Dewas and Paonta Sahib. Then in early 2009, FDA halted review of drug applications for drugs manufactured at the Paonta Sahib plant, alleging Ranbaxy had falsified data [1].

Issues at the two plants included incomplete testing records and an inadequate stability programme, as well as significant GMP deviations in the manufacture of certain active pharmaceutical ingredients and finished products. Ranbaxy also admitted to making false statements to FDA in annual reports filed in 2006 and 2007 regarding the dates of stability tests. Ranbaxy was found to have conducted stability testing of certain batches of drugs several weeks or months after the dates reported to FDA. In addition, instead of conducting some of the stability tests at prescribed intervals months apart, the tests were conducted on the same day or within a few days of each other.

The company pleaded guilty to three felony counts related to the manufacturing of drugs at the two Indian locations that did not meet safety standards and to four counts of making material false statements.

The fine represents the US’s largest financial penalty paid by a generics pharmaceutical company for FDCA violations, according to US Attorney Rod J Rosenstein. He said that ‘the joint criminal and civil resolution, which reflects many years of work by FDA agents and federal prosecutors, holds Ranbaxy accountable for a pattern of violations and should improve the reliability of generic drugs manufactured in India by Ranbaxy.’

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1.  GaBI Online - Generics and Biosimilars Initiative. Ranbaxy to pay FDA to end impasse on manufacturing ban [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2013 May 24]. Available from: www.gabionline.net/Pharma-News/Ranbaxy-to-pay-FDA-to-end-impasse-on-manufacturing-ban

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Source: US Department of Justice

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