Ranbaxy USA Inc., the American subsidiary of Ranbaxy Laboratories Limited, an Indian generic pharmaceutical maker, has agreed to pay $500 million to settle fines related to claims that it made false statements to the FDA about its manufacturing practices abroad and sold substandard medications and pay penalties. The US Justice Department, which announced the terms of this resolution, said that Ranbaxy also pleaded guilty to criminal charges involving federal drug safety violations.
Former Ranbaxy Director (and Global Head, Research & Portfolio Management) Dinesh S. Thankur, who filed the whistleblower lawsuit, is the one who brought forward the allegations that the company violated Good Manufacturing and Laboratory Practices, leading to the making of subpar drugs and the falsification of drug information. He also contends that Ranbaxy submitted false claims for a number of adulterated drugs to government healthcare programs for payment, as well as turned in false information when no tests were conducted while falsifying data about backdating tests.
Thankur alleges that the generic drug manufacturer committed Medicare/Medicaid fraud and pharmaceutical fraud. He said that he was forced to notify healthcare authorities about the violations after his former employer didn’t act when he alerted them to the problems.
The False Claims Act allows a whistleblower to get a percentage of what the government recovers with this type of lawsuit. Of the $500 million, Thankur will receive about $49 million.
Meantime, Ranbaxy’s US subsidiary has admitted to selling impure drugs made at two Indian manufacturing sites. Prosecutors say that the adulterated drugs included generic versions of medications for epilepsy, acne, nerve pain, and an antibiotic. The generic drug maker also admitted to improperly storing drug samples that were to be tested, delaying a voluntary recall of epilepsy drug Gabapentin (the recall would go on to involve over 73 million pills), making false statements to the FDA, and continuing to sell a drug that failed purity testing.
Also, out of the $500 million, $150 million is forfeiture and the criminal fine, with the rest, save for Thankur’s whistleblower settlement, to go to the civil claims submitted by the US government and all the states.
Whistleblower Fraud
If you are aware of a Medicare billing fraud that is being perpetuated against the state of Massachusetts or the federal government, contact our Boston whistleblower law firm right away to ask for your free, no obligation case consultation.
The False Claims Act’s “qui tam” provision lets US citizens sue on behalf of the federal government while entitling them to a percentage of what is recovered. The Commonwealth of Massachusetts has similar legislation for state violations. State and federal acts cover fraud against state and federally funded programs. Tax fraud, however, is not included.
Read the Settlement Agreement with the US Government (PDF)
Ranbaxy case: Whistleblower to get $49 m of penalty money, AP/Hindustan Times, May 14, 2013
Generic Drug Maker Pleads Guilty in Federal Case, New York Times, May 13, 2013
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