Generic drug maker Ranbaxy USA Inc., pleaded guilty to drug safety violations and will be responsible for paying $500 million in criminal and civil fines, according to the Department of Justice (DOJ). The fines will resolve claims that the manufacturer sold inferior drugs and made false statements to the U.S. Food and Drug Administration (FDA) about manufacturing practices at two factories in India. This announcement was made by the DOJ on May 13, 2013. This settlement is the largest drug settlement to date involving a generic drug manufacturer and drug safety.
Ranbaxy USA Inc., is a subsidiary of Indian generic pharmaceutical manufacturer Ranbaxy Laboratories Limited. The entities listed in the settlement include: Ranbaxy, Inc., Ranbaxy Pharmaceuticals, Inc., Ranbaxy Laboratories, Inc., Ohm Laboratories, Inc., and Ranbaxy USA, Inc. (collectively “Ranbaxy”).
Criminal Fine and Forfeiture.
Ranbaxy admitted to not conducting proper safety and quality tests of several drugs manufactured at two of its plants in India, according to the DOJ. Under the settlement the company pleaded guilty to three felony counts of violating the federal drug safety law. Ranbaxy agreed to pay $150 million in criminal fines and forfeitures.
False Statements Made to FDA.
According to the DOJ, Ranbaxy also pleaded guilty to four felony counts of knowingly making false statements to the FDA in annual reports. To settle civil claims under the False Claims Act and related state laws, Ranbaxy agreed to pay $350 million. This fine was to resolve false claims that were submitted to government health care programs such as Medicare, Medicaid, TRICARE and the Department of Veterans Affairs. The settlement was entered into by all 50 states, the District of Columbia and the federal government.
Florida Will Receive $3 Million from Settlement.
According to the Florida Attorney General (AG), Florida will receive more than $3 million as a result of the settlement. AG Pam Bondi stated that the Medicaid Fraud Control Unit (MFCU) will not allow Florida taxpayers to pick up the tab for pharmaceutical companies that manufacture, distribute and sell adulterated pharmaceutical drugs.
Example of Florida’s Civil Forfeiture Act.
This is an example of Medicaid fraud through the use of adulterated and “counterfeit” drugs, as well as the use of Florida’s Civil Forfeiture Act in a Medicaid case. To learn more on civil forfeiture and defending against seizures of property, click here for a previous blog.
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What do you think of this settlement agreement? Please leave any thoughtful comments below.
Department of Justice. “Generic Drug Manufacturer Ranbaxy Pleads Guilty and Agrees to Pay $500 Million to Resolve False Claims Allegations, cGMP Violations and False Statements to the FDA.” Department of Justice. (May 13, 2013). From: http://www.justice.gov/opa/pr/2013/May/13-civ-542.html
Meale, Jenn. “Attorney General Bondi Enters $350 Million National Settlement with Ranbaxy Resolving Adulterated Drug Claims” Florida Office of the Attorney General. (May 14, 2013). From: http://www.myfloridalegal.com/newsrel.nsf/newsreleases/505E50CA109D827885257B6B006BA668
Settlement Agreement between the State of Florida and Ranbaxy Laboratories Limited. Case No. 10-05-01. (May 14, 2013). From: http://www.thehealthlawfirm.com/uploads/Ranbaxy%20Settlement%20agreement.pdf
About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.
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