As we’ve been following since January 2012, the DOJ announced yesterday the final settlement with generic drug manufacturer Ranbaxy, bringing to a close the DOJ’s investigation of claims that the company introduced certain batches of adulterated drugs into the U.S. marketplace years ago. Ranbaxy is probably best known for the sale of the generic version of the blockbuster drug Lipitor. The $500 million settlement is being touted as the “largest drug safety settlement to date.”
As part of the settlement, Ranbaxy pled guilty to three felony Food, Drug and Cosmetic Act counts and four felony counts of knowingly making material false statements to the FDA, according to the DOJ press release. According to Rod J. Rosenstein, U.S. Attorney for the District of Maryland, “This is the largest false claims case ever prosecuted in the District of Maryland, and the nation’s largest financial penalty paid by a generic pharmaceutical company for FDCA violations.” As we highlighted in our previous post, the international component of this investigation — all manufacturing facilities at issue were located in India — seem particularly noteworthy and suggest a more aggressive international stance on the part of the FDA. As acting assistant attorney general for the DOJ Civil Division, Stuart F. Delery, stated, “We will continue to work with our law-enforcement partners to ensure that all manufacturers of drugs approved by the FDA for sale in the United States, both domestic and foreign, follow the FDA guidelines that protect all of us.”
Ranbaxy will pay a criminal fine and forfeiture totaling $150 million and civil settlement of $350 million, $231.8 million of which will go to the federal government, $118.2 million to the participating states, and approximately $48.6 to the qui tam whistleblower, a former Ranbaxy executive. Whether the Ranbaxy settlement indicates a growing trend in broad-reaching international enforcement of FDA violations remains to be seen, but it is likely that the DOJ and FDA will continue to work together if these are the results they can achieve. Companies thus should be ever more vigilant in their risk management assessments and consider proactive measures to eliminate, or at least reduce, their exposure to aggressive government FCA actions.

