Ranbaxy Production Scandal Costs $500 Million

Ranbaxy Production Scandal Costs $500 Million

May 14th, 2013 // 3:55 pm @

Latest FDA and cGMP Compliance News

After a year when it entered into a consent decree for serious cGMP violations, Ranbaxy Laboratories has now agreed to pay $500 million to settle both criminal and civil issues that were related to the manufacturing problems. The Department of Justice has called this the biggest financial penalty ever paid by a generic pharmaceutical manufacturer for violations of the FD&C Act.

Ranbaxy US has pleaded guilty to 3 felony counts of violating the FD&C Act, and four felony counts of making false statements to FDA. The criminal fine is $130 million, and also a forfeiture of $20 million. The drugs that caused the cGMP violations were made in India.

The deal with FDA and DOJ also requires the company to settle a lawsuit that was filed for $350 million by a whistleblower for causing several healthcare programs to overpay for some drugs. The whistleblower was the former Ranbaxy director and global chief who left the company in 2005. Her name is Dinesh Thakur.

Thakur discovered in 2005 that Ranbaxy made fake drug data and violated cGMPs and GLPs in a systematic and deliberate way. Ranbaxy management was informed but they refused to correct the problems, she stated this week.

The settlement ends one of the major cGMP manufacturing scandals since 2000. This scandal started five years back when it was made public that Ranbaxy was being investigated by FDA for using raw chemicals from several unapproved sources, faking in house test data to meet cGMP standards, and trying to hide the acts from FDA by faking records.

The allegations that were investigated included faking stability data and bioequivalance data to support several AIDS drugs that were to be delivered to foreign countries. FDA then sent out an import alert and banned imports of thirty Ranbaxy drugs. By that time, the plant in India had failed several FDA audits and Ranbaxy also failed to turn in field alert reports about cGMP problems.

As we can see, trying to mislead FDA can lead to warning letters, consent decrees and worse. Not a good idea.

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