Ranbaxy to pay heavily for future US violations

Ranbaxy Laboratories will have to perpetually be on its toes, as the ‘consent decree’ it signed with the US Food and Drug Administration (USFDA) last month stipulates financial penalties that could run into several millions of dollars for any future flaws. The consent decree filed by the US Department of Justice, on behalf of USFDA, with the district court at Maryland, contains a lengthy list of “liquidated damages provisions” agreed by Ranbaxy. The decree, meant to resolve all pending regulatory issues with USFDA, stipulates that all Ranbaxy facilities that manufacture medicines for the US market can be covered under this “decree” in case of future violations. The existing current good manufacturing practice (CGMP) and data integrity issues are linked to Ranbaxy’s Paonta Sahib, Batamandi and Dewas, facilities, as well as CGMP issues at Ranbaxy Inc’s wholly owned subsidiary, Ohm Laboratories’ facility in Gloversville, US.

Ranbaxy has also agreed to relinquish any 180-day marketing exclusivity that it might have for three pending generic drug applications. The firm has further agreed to relinquish any 180-day marketing exclusivity it may have for several additional generic drug applications if it failed to meet certain decree requirements by specified dates. The company has not disclosed the details of its three potential candidates, whose exclusivity depends on the speed with which Ranbaxy meet the decree requirements. The consent decree signed on December 20 contains liquidated damages provisions to cover many potential violations of the law and the decree. Thus, Ranbaxy has agreed to pay $15,000 in liquidated damages for each day of violation of 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. Announcing the signing of the decree, Ranbaxy had separately disclosed its decision to make a provision of $500 million in connection with the investigation by the US Department of Justice, towards settlement of all potential civil and criminal liability.

Under this agreement, once Ranbaxy achieved compliance with the data integrity requirements, a third-party expert must conduct audits of the facilities to confirm that compliance is being maintained. 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. In addition, the consent decree prevents Ranbaxy from manufacturing drugs for introduction to the US market and for the President’s Emergency Plan for AIDS Relief Program at the Paonta Sahib, Batamandi, Dewas, and Gloversville facilities until drugs can be manufactured at such facilities in compliance with US manufacturing quality standards. Ranbaxy’s Paonta Sahib, Batamandi, and Dewas, India facilities have been on FDA import alert since 2008 and Ranbaxy had closed its Gloversville facility.