Pharmaceutical manufacturer in India to pay Ohio $3.8 million

Company introduced adulterated drugs into interstate commerce, resulting in false or fraudulent claims being submitted to Ohio's Medicaid Program.
Norwalk Reflector Staff
May 17, 2013

Ohio Attorney General Mike DeWine announced that Ohio has joined with other states and the federal government in a $500 million dollar settlement to resolve civil and criminal allegations against a pharmaceutical manufacturer in India. 

Investigators said Ranbaxy, a generic pharmaceutical manufacturer based in Gurgaon, India, introduced adulterated drugs into interstate commerce. As a result, false or fraudulent claims were submitted to Ohio's Medicaid Program.

The total portion of the settlement amount recovered by Ohio is $3.8 million.

"The knowing manufacture and distribution of adulterated drugs with the intent to defraud or mislead presents a serious risk to public safety, and it is also a very costly crime," DeWine said.  "Medicaid reimbursed for millions of dollars of medications that were potentially ineffective or unsafe."

The investigation resulted from whistleblower action filed in the United States District Court for the District of Maryland under the federal False Claims Act.  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 the 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 dollars in civil damages and penalties to resolve civil allegations of poor manufacturing practices in two Indian manufacturing plants.  $266,729,715.10 of this amount will go to the Medicaid programs, which is funded jointly by the states and the federal government.

The remaining $83,270,284.86 is designated for other federal health care programs affected by Ranbaxy's conduct.

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 dollars in criminal fines and forfeitures.

Ranbaxy entered into a consent decree in January 2012 with the federal government to address outstanding current good manufacturing practice (cGMP) and data integrity issues in the two Indian manufacturing plants at issue.  These provisions include a wide range of actions to correct its violations and to ensure that the violations do not occur again. 

A team from the National Association of Medicaid Fraud Control Units (NAMFCU) conducted the settlement negotiations with Ranbaxy on behalf of the states.