$500 Million Penalty: Subsidiary of Indian drug maker agrees to pay

A subsidiary of India’s largest pharmaceutical company has agreed to pay a record $500 million in fines and penalties for selling adulterated drugs and lying to federal regulators in a case that is part of an ongoing crackdown on the quality of generic drugs flowing into the U.S.

Federal prosecutors said Monday the guilty plea by Ranbaxy USA Inc. represents the largest financial penalty against a generic drug company for violations of the Federal Food, Drug and Cosmetic Act, which prohibits the sale of impure drugs.

It concludes a years-long federal investigation into Ranbaxy’s manufacturing deficiencies. The Food and Drug Administration had earlier barred from the company from importing more than 30 different drugs made at factories in India and struck a deal that required the company to ensure that data on its products is accurate and to improve its drug-making procedures.

The subsidiary of Ranbaxy Laboratories Limited admitted that it made and sold impure drugs at two manufacturing sites in India. Prosecutors said the batches of adulterated drugs, whose strength, purity or quality differed from the specifications, included generic versions of an antibiotic and other medications used to treat severe nodular acne, epilepsy and nerve pain.

It’s not known whether the problems with the drugs led to any health issues. The problems were largely revealed by a whistleblower in a federal lawsuit. The federal allegations against the company make no claims that the drugs harmed anyone.

The company admitted to a wide range of deficiencies, including improperly storing drug samples waiting to be tested, continuing to sell a drug even after it had failed purity tests and waiting months to voluntarily recall medication that it knew would not maintain its expected shelf life.

Ranbaxy also admitted making false statements to the FDA in 2006 and 2007 annual reports about dates of tests. In some cases, the tests were done months after the company said they’d been performed. Or the tests were done on the same day — or within days of each other — instead of months apart, the prescribed interval.