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Ranbaxy Pleads Guilty to Manufacturing Adulterated Drugs

By Zachary Brennan , 15-May-2013
Last updated on 15-May-2013 at 10:00 GMT

In the largest US generic drug safety settlement ever, Ranbaxy USA has agreed to pay $500m after pleading guilty to manufacturing and distributing adulterated drugs, according to the US Justice Department settlement agreement .

The company plead guilty to three felony FDCA (Federal Food Drug and Cosmetic Act) counts and four felony counts of knowingly making material false statements to the US FDA.  

The generic drugs at issue were manufactured at Ranbaxy’s facilities in Paonta Sahib and Dewas, India. The firm agreed to pay a criminal fine and forfeiture totaling $150m, as well as civil claims for $350m.  The announcement of the $500m penalty and the US FDA consent decree first came in 2011 .

In addition to the fines, Ranbaxy USA admitted to manufacturing and releasing batches of adulterated drugs that were produced at its Paonta Sahib, India, facility in 2005 and 2006, including its branded generic form of isotretinoin used to treat severe recalcitrant nodular acne, the epilepsy and nerve pain treatment gabapentin, and the antibiotic ciprofloxacin.  

The company also acknowledged that the FDA’s inspection of this facility in 2006 found incomplete testing records and an inadequate stability program.

The FDA’s inspections of the company’s Dewas facility in 2006 and 2008 found incomplete testing records, an inadequate stability program, and significant cGMP deviations in the manufacture of certain APIs (active pharmaceutical ingredients) and finished products, according to the DOJ.   

In 2003 and 2005 the company was informed of cGMP violations by consultants it hired to conduct audits at the Paonta Sahib and Dewas facilities, the company admitted.   

Dinesh Thaku, former Director of Project & Information Management at Ranbaxy that helped to uncover the fraudulent practices, said in a statement , “It took us eight years to help government authorities unravel a complicated trail of falsified records and dangerous manufacturing practices that threatened to compromise the quality and safety of Ranbaxy drugs.”

Moving Forward

Ranbaxy said in a statement on Monday that the violations and fines are the conclusion of a past investigation.

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,” Arun Sawhney, CEO & Managing Director of Ranbaxy said. “Ranbaxy has successfully launched several generic products recently and is well-positioned for future growth in the U.S. and around the world.”

Recently the company experienced manufacturing issues with its Lipitor generics that caused it to halt production at a New Jersey facility. The company said some of the batches could contain small glass particles.

Last August, the company pulled 27 ANDAs for drugs previously made at three Indian facilities included in a 2012 consent decree with the FDA.

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