Drug Manufacturer Agrees to Pay $350 Million to Settle Whistleblower FCA Suit

On May 13, 2013, the U.S. Department of Justice announced that Ranbaxy USA, a subsidiary of an Indian drug manufacturer, will pay $350 million to resolve allegations that the company violated the False Claims Act (FCA) by manufacturing and distributing adulterated drugs. Specifically, by manufacturing and distributing adulterated drugs, Ranbaxy was alleged to have violated the FCA by knowingly causing false claims to be submitted for those adulterated drugs through government programs such as Medicare and Medicaid. The company also pled guilty to felony charges and will pay $150 million in criminal fines. The relator, a former Ranbaxy executive, will receive over $48 million as his share of the recovery.

A drug is considered adulterated if the manufacturing processes used do not conform with current good manufacturing practices (cGMP). It is mandated that drug manufacturers comply with cGMP regulations in the manufacture and distribution of their drugs because those regulations assure that the drugs have the identity and strength, and meet the quality and purity characteristics, which those drugs are purported to possess. Government programs, such as Medicare and Medicaid, will not pay for drugs that are deemed to be adulterated.

This marks the second large FCA settlement involving the manufacture of adulterated drugs. In 2010, drug manufacturer, GlaxoSmithKline, agreed to pay $600 million to settle allegations that its subsidiary manufactured adulterated drugs from a plant in Puerto Rico.

The DOJ press release on the Ranbaxy settlement can be found here: http://www.justice.gov/opa/pr/2013/May/13-civ-542.html.


If you believe you have a Pharmaceutical Fraud Claim, or other False Claims Act claim, contact the Rabon Law Firm for a free consultation.

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