On January 25, 2012, the FDA announced that it had filed a consent decree of permanent injunction against generic drug manufacturer Ranbaxy Laboratories through the United States Department of Justice. The consent decree will address outstanding current good manufacturing practice (CGMP) and data integrity issues at Ranbaxy’s three India facilities as well as CGMP issues at Ranbaxy Inc.’s wholly owned subsidiary Ohm Laboratories, whose facility is located in Gloversville, N.Y. According to the FDA’s press release:
The consent decree requires that Ranbaxy comply with detailed data integrity provisions before [the] FDA will resume reviewing drug applications containing data or other information from the Paonta Sahib, Batamandi, and Dewas facilities. Specifically, Ranbaxy must:
(1) hire a third party expert to conduct a thorough internal review at the facilities and audit applications containing data from the affected facilities;
(2) implement procedures and controls sufficient to ensure data integrity in the company’s drug applications; and
(3) withdraw any applications found to contain untrue statements of material fact and/or a pattern or practice of data irregularities that could affect approval of the application.
Issues with Ranbaxy began in 2008 when the FDA issued two warning letters to the company regarding generic drugs coming out of two manufacturing plants, in 2009 the FDA announced it had discovered the company had engaged in data falsification on pending and approved drug applications. The decree also provides for liquidated damages;
In addition to a provision requiring Ranbaxy to pay $15,000 in liquidated damages for each day defendants violate the law or the decree at the facilities covered by the decree and an additional sum of $15,000 for each overall violation of the law and the decree, the decree states that: (1) if defendants distribute any drug from the facilities covered by the decree, Ranbaxy shall pay liquidated damages equal to two times the retail value of such drug, not to exceed 10 million dollars in any one calendar year; and (2) if defendants submit an untrue statement in connection with any application they file with [the] FDA, Ranbaxy shall pay up to three million dollars in liquidated damages for each such statement, not to exceed 30 million dollars in any one calendar year.
According to a pharmaceuticals analyst interviewed by the Pakistani Daily Times, the provisions of the consent degree were harsher than anticipated, and some analysts believe it will cost the company upwards of $200 million to implement the terms of the decree. The announcement of the terms of the consent decree caused Ranbaxy shares to fall seven percent shortly following the announcement. The company made US headlines in early December of 2011 when it won approval to sell its generic version of Pfizer’s cholesterol medication Lipitor, the world’s top selling drug. The consent decree does not affect its ability to sell the generic version of Lipitor in the US.