The United States Justice Department has filed a “ground-breaking” consent decree in court for a permanent injunction mandating Indian drug-maker Ranbaxy to adhere to U.S. manufacturing standards and ensure integrity of data at its plants in the U.S. and India.

“This action against Ranbaxy is ground-breaking in its international reach — it requires the company to make fundamental changes to its plants in both the United States and India,” Assistant Attorney General for the Justice Department’s Civil Division Tony West said on Wednesday after it filed the consent decree at the request of the Food and Drug Administration (FDA).

“Our commitment to ensuring that the drugs the American people rely on are safe, effective and manufactured according to the FDA’s standards... beyond our borders,” Mr. West said.

The consent decree is unprecedented in its scope, the Justice Department said.

It requires Ranbaxy to hire an outside expert to conduct a thorough internal review at the affected facilities and to audit applications containing data from those facilities, withdraw any applications found to contain false data, set up a separate office of data reliability within Ranbaxy and hire an outside auditor to audit the affected facilities in the future, the Justice Department said.

These are part of a wide range of actions to correct its violations and ensure that they do not happen again, it added.

Meanwhile, Ranbaxy has committed to further strengthen procedures and policies to ensure data integrity and to comply with current good manufacturing practices.

“Today’s announcement is the next step in the process of finalising our agreement with the FDA to resolve this legacy issue,” Ranbaxy CEO and Managing Director Arun Sawhney said in a statement.

Ranbaxy’s Paonta Sahib, Batamandi and Dewas facilities in India have been on FDA import alert since 2008 and Ranbaxy has closed its Gloversville facility. The USFDA had banned 30 generic drugs produced by Ranbaxy at these three units, citing gross violation of approved manufacturing norms.

In the same year, the U.S. Department of Justice had also moved a motion against the company in a local court alleging forgery of documents and fraudulent practice.

The consent decree also prevents Ranbaxy from manufacturing drugs for introduction to the US market and for the President’s Emergency Plan for AIDS Relief (PEPFAR) Programme at the Paonta Sahib, Batamandi, Dewas and Gloversville facilities until drugs can be manufactured at such facilities in compliance with US manufacturing quality standards, the USFDA said in a statement.

“Because this company continued to violate current good manufacturing practice regulations and falsify information on drug applications, the FDA took these actions in an effort to protect consumers,” FDA Associate Commissioner for Regulatory Affairs Dara Corrigan said.

The USFDA also said Ranbaxy has agreed to relinquish any 180-day marketing exclusivity that it might have for three pending generic drug applications and the firm has further agreed to relinquish any 180-day marketing exclusivity that it may have for several additional generic drug applications if it fails to meet certain decree requirements by specified dates.

The consent decree also contains damages provisions to cover many potential violations of the law and the decree, the USFDA added.

“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 USD 10 million in any one calendar year,” the USFDA said.

Further, if the company submits an untrue statement in connection with any application filed with the FDA, Ranbaxy shall pay up to USD 3 million in liquidated damages for each such statement, not to exceed 30 million dollars in any one calendar year, the USFDA added.

Once the consent decree is approved by the court, it becomes a court order with which Ranbaxy must comply or face contempt. “Submitting false data to the FDA in drug applications will not be tolerated,” said Mr. West.

“The Department of Justice, in partnership with the FDA, will use all available tools, including civil injunction actions and consent decrees, to ensure the integrity of drug applications and to ensure that all drugs sold in the US meet US standards,” he added.

Through investigation by the department and the FDA, the US government said it uncovered numerous problems with Ranbaxy’s drug manufacturing and testing facilities in India and at units owned by its US subsidiary, Ranbaxy Inc.

These problems included failure to keep written records showing that drugs had been manufactured properly and failure to investigate evidence indicating that drugs did not meet their specifications, the Justice Department said.

The company also failed to adequately separate the manufacture of penicillin drugs from non—penicillin drugs in order to prevent cross-contamination. It also failed to have adequate procedures to prevent contamination of sterile drugs, it added.

Ranbaxy also conducted inadequate testing of drugs to ensure they kept their strength and effectiveness until their expiration date, the department added.

The government also determined that Ranbaxy submitted false data in drug applications to the FDA, including the backdating of tests and the submitting of test data for which no test samples existed, it said.

All of these actions constituted violations of the Federal Food, Drug and Cosmetic Act, making many of Ranbaxy’s drugs adulterated, potentially unsafe and illegal to sell in the United States, the Justice Department said.

Last year, Ranbaxy signed a consent decree with the USFDA to lift a ban on the import of drugs from certain manufacturing plants. It had also announced a provision of USD 500 million to settle its case with US Department of Justice.

A consent decree is a settlement of a lawsuit or criminal case in which a person or company agrees to take specific actions without admitting fault or guilt for the situation that led to the lawsuit.

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