Ranbaxy Settles False Claims Allegations for $500M; Whistleblower to Get $48.6M
In the largest drug safety settlement of its kind to date, generic drug manufacturer Ranbaxy USA Inc. pleaded guilty to felony charges relating to the manufacture and distribution of adulterated drugs, as well as violation of the False Claims Act, the U.S. Department of Justice announced this week. Ranbaxy agreed to pay a criminal fine and forfeiture amounting to $150 million and another $350 million for the False Claims Act violations.
Ranbaxy admitted to distributing certain batches of adulterated drugs made at two of Ranbaxy’s manufacturing facilities in India, including Sotret, an acne medication; gabapentin, a drug used to treat epilepsy and nerve pain; and ciprofloxacin, a broad-spectrum antibiotic. Under the federal Food, Drug, and Cosmetic Act (FDCA), a drug is adulterated if the methods used in, or the facilities or controls used for, its manufacturing, processing, packing, or holding do not conform to, or are not operated or administered in conformity with, current Good Manufacturing Practice (cGMP) regulations. Ranbaxy acknowledged that Food and Drug Administration (FDA) inspections found incomplete testing records, inadequate stability programs, and cGMP deviations in the manufacture of certain active pharmaceutical ingredients and finished products.
Ranbaxy also failed to file timely “field alerts” to the FDA for batches of drugs that had failed certain tests. Ranbaxy admitted to making false, fictitious, and fraudulent statements to the FDA regarding the dates of stability tests and failed to conduct stability tests at prescribed intervals, resulting in unreliable test results regarding the shelf life of the drugs.
The United States contends that Ranbaxy knowingly caused false claims to be submitted to Medicaid, Medicare, the Department of Veterans Affairs, and other federally funded healthcare programs.
The suit was originally filed by Dinesh Thakur, a former Ranbaxy executive, under the whistleblower provisions of the False Claims Act. The False Claims Act allows a private citizen with knowledge of fraud to sue on behalf of the government and share in the recovery. Thakur will receive approximately $48.6 million from the federal share of the settlement amount.
The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments. We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud. Read more about our expertise in False Claims Act cases and how you can take action.