Dangerous Drug Maker to Pay $500M in Federal Fines

A generic drug manufacturer has pleaded guilty to a host of federal felony drug safety violations and will ultimately pay approximately $500 million in both criminal and civil fines – the largest settlement involving a generic drug maker, according to the U.S. Justice Department.
The settlement includes $350 million for civil claims and $150 million for criminal penalties.

Our Rock Hill personal injury lawyers understand that the defendant, Ranbaxy, has admitted not only to the sale of substandard drug products in the U.S., but also lying to federal regulators with the U.S. Food & Drug Administration regarding its manufacturing practices at two Indian factories.

In all, the company pleaded to three felony counts related to the production of those drugs, which failed to meet minimum federal safety standards, as well as four counts of making materially false statements.

Five years ago, the company was barred from producing some 30 different drugs in the U.S. after the FDA discovered the manufacturing deficiencies, as reported by the company’s former director and global head of research information. That individual is entitled to some $50 million for having been a whistleblower. He was later quoted as saying that administrators for the drugmaker were well aware of the serious and widespread problems at the factories. Yet, they failed to take any sort of corrective action, which the whistleblower said left him no choice but to take his knowledge to authorities.

The dangers were first reported eight years ago, and it’s taken this long to hold Ranbaxy accountable. The firm is a subsidiary of a Japanese pharmaceutical company called Daiichi Sankyo.

The company later admitted that it had utterly failed in its responsibility to conduct thorough tests for quality and safety or a number of the drugs it produced, including generic versions of a number of common medicines used to treat epilepsy, high cholesterol, nerve pain and bacterial infections.

For example, one of the drugs the company manufactured was gabapentin, a critical drug used to treat epilepsy patients. During the summer of 2007, the company conceded that testing had revealed the presence of unknown impurities and that the shelf life of the drug was unreliable. However, the company waited several months before alerting federal authorities – potentially putting thousands of lives at risk in the meantime.

While a statement from Ranbaxy officials indicated an eagerness to move on from this “past issue,” the reality is that problems have continued to plague the company. Most recently, in November, the company had to stop production of the generic version of Lipitor, used for high cholesterol patients, after it was revealed that glass particles were present in medications that had been distributed to U.S. patients. As it turned out, cracked glass lining at another Indian factory was to blame.

While we are certainly pleased that this case represents some modicum of accountability for past actions, what this case really did was shine a light on how little federal oversight that U.S. regulators have on drugmakers whose productions are primarily located overseas. In fact, inspections of foreign drug factories only occur about once every dozen years or so, compared to every other year for sites here in the U.S.

Contact our Rock Hill personal injury lawyers at Lee Law Offices today by calling 800-887-1965.

Additional Resources:
Generic Drug Maker Pleads Guilty in Federal Case, May 13, 2013, By Katie Thomas, The New York Times

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