Ranbaxy has pled guilty to felony charges of manufacturing adulterated drugs and making false statements to the FDA. The Indian drugmaker will pay the largest-ever drug safety settlement for a generic manufacturer--$500 million--to put the case to rest.
The FDA began to uncover the problems in 2006 when inspectors found incomplete testing records and an inadequate program to check drug stability at Ranbaxy's Paonta Sahib, India facility. Over the next 7 years, details of manufacturing quality failings dating back to 2003 and untrue statements to the FDA were exposed. Ranbaxy has now agreed to pay $350 million to settle a civil case and a further $150 million for criminal charges. The Department of Justice believes it is the largest settlement of its kind. In 2010, GlaxoSmithKline ($GSK) paid $750 million to settle claims it sold substandard drugs, but most similarly large fines relate to fraudulent marketing.
The case was made possible by a former Ranbaxy director who told authorities what was going on at the firm. U.S. authorities will give the whistleblower, Dinesh Thakur, almost $49 million for his role in the case against Ranbaxy. In a statement, Thakur expressed relief the case is over: "It took us 8 years to help government authorities unravel a complicated trail of falsified records and dangerous manufacturing practices that threatened to compromise the quality and safety of Ranbaxy drugs."
While the Ranbaxy case is now seemingly nearing conclusion, the underlying issues are still as topical as when it began. The FDA is still grappling with the globalization of drug manufacturing and trying to improve oversight of emerging markets with a finite budget. For some, the case against Ranbaxy raises more questions than it answers. Joe Graedon, a pharmacologist and head of consumer website the People's Pharmacy, told The New York Times: "[The FDA] just happened to stumble across the Ranbaxy problem at those two plants in India. Ranbaxy was the biggest and one of the best in India. What about all the smaller ones? What does that say about them?"