$500 million US ‘settlement’ by Ranbaxy2 min read . Updated: 14 May 2013, 03:55 PM IST
Ranbaxy settles alleged civil violations of the False Claims Act with all 50 states in the US and District of Columbia
Mumbai: India’s largest drug maker by sales Ranbaxy Laboratories Ltd said on Tuesday that the US department of justice (DoJ) has concluded its investigation on data integrity and manufacturing processes at certain Ranbaxy facilities in India. The investigation was related to charges of non-complaince to drug manufacturing quality norms and related data falsification in filings to the US Food and Drug Administration which occurred at least six years ago. Following these charges, the US drug regulator had in 2008 banned products from two manufacturing facilities of Ranbaxy in India from being sold in that country.
Under the terms of the final settlement agreement, Ranbaxy and its affiliates have agreed to settle alleged civil violations of the False Claims Act with all 50 states in the US and the District of Columbia. Separately, one of the company’s US subsidiaries, Ranbaxy USA Inc., has agreed to plead guilty to violations of the Food, Drug and Cosmetic Act and other criminal statutes. Ranbaxy’s payments related to both the civil and criminal settlements total $500 million.
On 20 December 2011, Ranbaxy announced that it had signed a consent decree with the US Food and Drug Administration, under which it committed to further strengthen procedures and policies to ensure data integrity and to comply with current good manufacturing practice. In anticipation of the settlement with the DoJ announced on Tuesday, Ranbaxy had said at that time its intention was to make a financial provision of $500 million related to expected costs associated with resolving the DoJ investigation.
The financial provision Ranbaxy established in December 2011 will be sufficient to cover all material financial obligations under the agreement, said a statement from Ranbaxy, which is currentlyowned by Japanese drug maker Daiichi Sankyo Group.
“Today’s announcement marks the resolution of this past issue," said Arun Sawhney, chief executive officer and managing director of Ranbaxy, in a Tuesday statement.
“We are pleased to continue bringing safe, effective and quality medicines to market for the benefit of consumers in the US and other parts of the world. While we are disappointed by the conduct of the past that led to this investigation, we strongly believe that settling this matter now is in the best interest of all of Ranbaxy’s stakeholders," he said.
The company added that the conclusion of the DoJ investigation does not materially impact its current financial situation or performance.
On Tuesday, Ranbaxy’s shares ended at ₹ 455.50 apiece on BSE, up 3.63% from previous close, while India’s benchmark Sensex Index rose 0.16% to 19,722.29 points.