US DoJ says Ranbaxy pleads guilty and agrees to pay $500 million in settlements

In the largest drug safety settlement to date with a generic drug manufacturer, Ranbaxy USA, a subsidiary of Indian generic pharmaceutical manufacturer Ranbaxy Laboratories 9BSE; 500359) has pleaded guilty to felony charges relating to the manufacture and distribution of certain adulterated drugs made at two of Ranbaxy’s manufacturing facilities in India, the US Justice Department announced yesterday (May 13).

Ranbaxy, which is majority-owned by Japan’s Daiichi Sankyo, also agreed to pay a criminal fine and forfeiture totaling $150 million and to settle civil claims under the False Claims Act and related State laws for $350 million.

The federal Food, Drug and Cosmetic Act (FDCA) prohibits the introduction or delivery for introduction into interstate commerce of any drug that is adulterated. Ranbaxy USA pleaded guilty to three felony FDCA counts, and four felony counts of knowingly making material false statements to the Food and Drug Administration. The generic drugs at issue were manufactured at Ranbaxy’s facilities in Paonta Sahib and Dewas, India. Under the plea accord, the company will pay a criminal fine of $130 million, and forfeit an additional $20 million.