Agreement on Largest Drug Safety Settlement Ever

By Rheingold Giuffra Ruffo & Plotkin LLP

Generic drug manufacturer, Ranbaxy USA, knowingly produced fake drugs at two plants in India and distributed them to the United States. Company officials knew that the fake drugs did not meet shelf-life standards but did not notify the FDA.

Ranbaxy USA is a subsidiary of India’s largest generic drug manufacturer. They have pleaded guilty to seven felony counts and will be paying $500 million in fines and forfeitures to resolve violations of the Federal Food, Drug, and Cosmetic Act (FDCA).

The company fabricated data about its legitimacy so that it met Abbreviated New Drug Applications (ANDA) filed with the FDA. Company officials were knowingly incorporating fabricated data with regulators in order to deceive them and get the drug approved.

Successful fabricated submissions have been found as early as 1998 for drugs such as antibiotics, acne treatments, cholesterol, and hypertension medication. These drugs were continuously distributed between 2005 and 2008 even after being advised by the FDA of problems with the drugs. This eventually led to the Justice Department doing a voluntary recall in 2007.

In 2012, Ranbaxy suspended drug operations. They never admitted civil liability, but instead paid $350 million to settle FDCA claims. As is the case with many other pharmaceutical companies, they successfully bought their way out of accountability.

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