May 17, 2013. Indian pharmaceutical maker Ranbaxy will pay $500 million to North Carolina, other states and the federal government for selling generic drugs that didn’t meet quality standards, Attorney General Roy Cooper announced today.
“Frauds like this waste taxpayer dollars and potentially put at risk the health and safety of patients,” Cooper said. “Drug makers can’t put profits before patients.”
North Carolina joined with other states and the federal government in an agreement in principle to settle allegations that Ranbaxy sold drugs that fell below the quality, purity and/or strength standards required by the US Food and Drug Administration (FDA). At issue were 26 generic drugs manufactured at company facilities in Paonta Sahib and Dewas, India between April 1, 2003 and September 16, 2010.
As a result of the sub-par drugs, false or fraudulent claims were submitted to government-funded health care programs, including North Carolina’s Medicaid program.
Ranbaxy has agreed to pay the states and the federal government $350 million dollars to resolve civil allegations of poor manufacturing practices in two Indian manufacturing plants. Additionally, subsidiary Ranbaxy USA has pleaded guilty to seven felony violations of the U.S. Food, Drug, and Cosmetic Act and will pay $150 million dollars in criminal fines and forfeitures.
North Carolina’s share of the settlement is $8,745,227.34, which will go toward Medicaid efforts in the state and includes civil penalties which will go to public schools. Medicaid is a joint federal-state program that provides health insurance for the poor.
Ranbaxy also entered into a consent decree in January 2012 with the federal government to correct problems at its plants and ensure that the violations do not occur again. The case resulted from a whistleblower action filed in the United States District Court for the District of Maryland under the federal False Claims Act and various state false claims statutes.
The North Carolina settlement agreement was reached by Cooper’s Medicaid Investigations Division and the North Carolina Division of Medical Assistance.
The MID investigates fraud and abuse by hospitals, doctors, pharmaceutical companies, medical equipment companies, mental health and personal care providers, ambulance services and others, as well as patient abuse and neglect in Medicaid-funded facilities. Over the past decade, Cooper’s MID has recouped more than $500 million and helped to convict hundreds of individuals on criminal charges.