Ranbaxy Labs Punished for Defrauding FDA Standards

Last December, the company Ranbaxy Laboratories agreed to pay the government $500 million and accept a consent decree as a result of numerous violations in their manufacturing practices. Under the agreement, Ranbaxy will be unable to produce pharmaceuticals for the United States until it raises the standards of its plants in Indiana and New York. Some of the Indian company’s violations included falsifying records that brought about the production and sale of medications that failed to meet FDA standards; fabricating bioequivalence and stability data to support AIDS drugs paid for by the President’s Emergency Plan for AIDS Relief program and distributed to foreign countries; failing to adequately separate the manufacture of penicillin drugs from non-penicillin drugs in order to prevent cross-contamination; failing to have adequate procedures to prevent contamination of sterile drugs; and inadequate testing of drugs to ensure that they kept their strength and effectiveness until their expiration date. These problems could signify not only the risks to foreign patients, but millions of Americans here at home.

Ranbaxy’s actions were not only negligent; they were also purposeful. The company submitted false data in drug applications including backdating tests and submitting test data for which no test samples existed. For a company to go to such lengths as to disguise its pharmaceutical data, it would appear that the data had to have shown negative results for Ranbaxy bottom-line. Health risks, as well as ethical dilemmas, should have been enough to avoid the fraudulent actions that the company chose. It should also be noted that while the company was being cited for serious manufacturing and reporting problems, the FDA granted an approval in November to sell a generic version of Lipitor. With the amount of problems that this company has produced in trying to adhere to the FDA’s own standards, and the potential for hazardous outcomes, why would the FDA allow this foreign company to continue to market and sell pharmaceuticals in the U.S.? Isn’t this a situations where our government should put its foot down and just say no! Doesn’t this essentially condone continued improper misconduct with respect to how companies approach the development, marketing, and sales of pharmaceutical drugs in the U.S.?

Looking on the bright side, one of the things that will come out of Ranbaxy fiasco is apparent increased scrutiny from the FDA in particular. Although its application was approved for generic Lipitor in November, the company will be subject to outside audits and will need to bring in a third-party expert to do internal reviews. The company will have to revise its reporting to take out any false information and will have to relinquish its marketing exclusivity on several pharmaceutical products. These penalties seem to be well deserved, but the FDA could have done more – this is a case where they really could have made a statement. Instead, Ranbaxy joins the long list of pharmaceutical companies who have engaged in fraudulent and illegal actions and merely get a slap on the wrist while the continue to gouge government payors and consumers as they continue to sell their drugs.

If you know or have information concerning specialty pharmacies that seek reimbursement for drugs that were dispensed off-label to Medicare Part D members, please call Eric Young at the Young Law Group at (800) 590-4116 or email to eyoung@young-lawgroup.com for a free confidential consultation.