Ranbaxy’s Investigation

Ranbaxy Investigated for Supply of Substandard Drugs to Africa:

Ranbaxy Inc. the India’s largest pharmaceutical company and one of the world’s biggest generic-drug makers is investigated by US Justice Department and Food and Drug Administration (FDA) to know whether it manufactured substandard generic drugs. Allegations are made that it manufactured weak or adulterated HIV drugs, which were given to thousands of AIDS patients in Africa.

US government paid Ranbaxy millions of dollars under the president’s emergency plan for AIDS relief to provide low-cost antiretroviral drugs for the AIDS patients in Africa. Investigators at the Justice Department and Food and Drug Administration made allegations that some of the drugs manufactured by Ranbaxy were poorly made, unstable, or impotent. Ranbaxy also changed the documents to cover-up the substandard products were found by the court filings and lawyers close to the investigation.

Ranbaxy issued a statement acknowledging the probe from its Gurgoan, India, headquarters because of which its shares fell more than 10% on Monday in London trading. As the details of the inquiry were not disclosed previously it raised the difficult questions for the company of its recent $4.6 billion sale of a majority stake to Daiichi Sankyo Co. of Japan, and a separate pact with Pfizer Inc. reached in June to license a generic version of Pfizer’s blockbuster cholesterol drug Lipitor.

In a federal court filing on Monday in Maryland, Ranbaxy said it is cooperating with investigators and will turn over disputed documents sought by the United States. Ranbaxy acknowledged “some serious allegations concerning of compliance with US law” but the filing said that “except for issues that have been fully aired with the government, Ranbaxy knows of no evidence to support these allegations.” Chuck Caprariello, the company spokesman declined to elaborate. The company also said that US investigations are not affecting its sale of company and its licensing agreements..

US investigators on July 3, court filing said the probe involves “a pattern of systematic fraudulent conduct” including allegations of health-care fraud, contract fraud, false claims, and fabrication of documents. These filings intended to force Ranbaxy to release audits of its plants conducted by a consultant; the company had argued that the audits were privileged.

Prosecution also made the allegations that Ranbaxy routinely lied to the FDA about the formulation of its generic drugs, which include a version of Zocor, Merck & Co’s best-selling cholesterol pill. No formal charges have been filed against the company.

In February 2006, FDA agents inspected a Ranbaxy plant in Paonta Sahib, India, and uncovered the quality problems which were mentioned in the warning letters sent to Ranbaxy On February 14, 2007, Ranbaxy’s US offices in Princeton and South Brunswick, NJ were raided by the agents of the FDA and Federal Bureau of Investigation.