Generic drug maker Ranbaxy will pay Tennessee more than $5.5 million as part of a $500 million agreement resolving claims the company sold inferior drugs and made false statements about how the drugs were made, Attorney General Bob Cooper announced Thursday, May 16.
Tennessee joined with other states and the federal government in what the Justice Department called the largest settlement in history regarding questionable drug operations involving a generic manufacturer.
The investigation resulted from a qui tam action filed in Maryland under the federal False Claims Act and various state false claims statutes.
The whistleblower’s complaint alleged that Ranbaxy knowingly manufactured, distributed, and sold generic pharmaceutical products whose strength, purity and/or quality fell below the standards required by FDA. The products at issue consisted of 26 generic pharmaceutical products manufactured at its facilities in Paonta Sahib and Dewas, India at various times between April 1, 2003 and September 16, 2010.
Ranbaxy has agreed to pay the states and the federal government $350 million in civil damages and penalties to resolve civil allegations of poor manufacturing practices in two Indian manufacturing plants.
Tennessee’s total share of the settlement is $5,536,033.17.
Additionally, Ranbaxy USA, a subsidiary, has pled guilty to seven felony counts alleging violations of the U.S. Food, Drug, and Cosmetic Act, and has agreed to pay $150 million in criminal fines and forfeitures.
Also, Ranbaxy entered into a consent decree in January 2012 with the federal government to address outstanding data integrity and good manufacturing practice issues to ensure the violations do not occur again.
“We hope this agreement will help improve the safety of drug manufacturing practices throughout the industry,” Attorney General Cooper said.
A team from National Association of Medicaid Fraud Control Units (NAMFCU) conducted the settlement negotiations with Ranbaxy on behalf of the states.