Feds say Ranbaxy faked data

Ranbaxy Laboratories found itself in hot water with the feds late last week, just days after announcing its merger deal with Japanese giant Daiichi Sankyo. U.S. investigators and the FDA apparently have been probing the Indian generics maker for months, investigating whether it fabricated data and made false claims to get drugs approved for U.S. sale. Now, Justice has filed a motion in Maryland federal court alleging that Ranbaxy forged some documents, and the government is demanding that the drugmaker turn over the documents for verification.

According to the Star-Ledger, the government alleges that Ranbaxy plant officials used raw ingredients from unapproved sources, fabricated in-house test data to meet FDA standards, and tried to hide those fabrications from FDA inspectors. This "pattern of systematic fraudulent conduct," the feds claimed in the Maryland motion, resulted in generic drugs that didn't contain the right amount of active ingredients. Ranbaxy's stock fell almost 11 percent on the news, to its lowest point in seven years.

Ranbaxy says it's working with the authorities. And according to a press statement issued yesterday, it "strongly denies the allegations" set forth in the Maryland motion. Moreover, the deal with Daiichi remains on track [1], the statement says. (A Daiichi exec told the Financial Times that it's "keeping close eyes" on the probe.) Ranbaxy is planning to file a response today in court.

- see Ranbaxy's statement [2]
- read the Star-Ledger story [3]
- check out the coverage [4] in the FT
- find the article [5] in India's Business Standard

Related Articles:
Daiichi Sankyo acquires Ranbaxy in $4.6B deal [1]
Overseas drugmaking goes unsupervised [6]
Probe reveals convoluted supply chain [7]