The Indian generic drugmaker Ranbaxy, which already operates under an unprecedented consent decree banning sales of many of its products in the U.S., agreed to plead guilty in federal court and pay $500 million to resolve allegations of shoddy factory inspections and poor quality control.
Ranbaxy, which calls itself India's largest drugmaker in financial disclosures, agreed to have its subsidiary Ranbaxy USA plead guilty to seven felony counts of introducing “adulterated” drugs into interstate commerce and making false statements to the Food and Drug Administration. All of the drugs were produced at company plants in Paonta Sahib and Dewes, India, which were also specifically cited in the consent decree, a U.S. Justice Department statement said.
The agreement says the company manufactured numerous drugs between 2003 and 2007 that lacked proper testing to ensure that their active ingredients were as potent as advertised. The company also submitted false test results to the FDA purporting to show that Ranbaxy officials were investigating drug quality and manufacturing specifications.
The company agreed to pay $150 million in criminal sanctions. That's in addition to $350 million in civil penalties under the False Claims Act, which was implicated because the drugs that the company sold to government health programs like Medicare and Medicaid were not legal under the Food, Drug and Cosmetic Act.