Indian drugmaker Ranbaxy to pay $620m in US DOJ settlement

REUTERS - Indian drugmaker Ranbaxy Laboratories Ltd pleaded guilty on Monday to felony charges related to drug safety and will pay US$500 million (S$620 million) in civil and criminal fines under the settlement agreement with the US Department of Justice.

The settlement is the largest-ever with a generic drugmaker over drug safety, according to the US government. It includes US$150 million in payments for a criminal fine and forfeiture and US$350 million in payments for civil claims.

The settlement has been in the works for some time. In December 2011, Ranbaxy set aside US$500 million to resolve the potential criminal and civil liabilities related to the investigation by the government into its manufacturing practices and falsifying data.

The company reached a related settlement agreement with the US Food & Drug Administration (FDA) in 2011.

Ranbaxy USA pleaded guilty to three felony counts related to the manufacture of drugs at two Indian locations that did not meet safety standards and to four counts of making material false statements.

In the civil settlement, Ranbaxy has agreed to pay US$350 million to resolve allegations that drugs from the two Indian plants did not meet specifications and that false claims were submitted to US government health-care programmes between April 1, 2003, and Sept 16, 2010.

In 2008, the FDA banned the company from selling about 30 drugs in the United States after it found manufacturing deficiencies at facilities in India. In 2009, the FDA had accused the company of falsifying data and test results in drug applications and halted reviews of drugs made at a plant in northern India.

Ranbaxy, majority-owned by Japan's Daiichi Sankyo Co Ltd, stopped selling drugs to the US markets while it fixed problems with its manufacturing procedures in the United States and India.

The company has also grappled with other manufacturing problems. In November 2012, it recalled some generic Lipitor, known as atorvastin calcium, in the United States after certain batches were found to contain glass particles.

It has since resumed manufacturing.