Ranbaxy troubles place FDA under fire

Indian drug firm Ranbaxy is facing scrutiny by American federal agencies and lawmakers over allegations that the company falsified scientific evidence to gain US approval for its products.

The company, one of the world’s biggest generic-drug makers, is also under investigation for allegedly attempting to conceal violations of accepted manufacturing practices, and producing substandard generic drugs that continue to be sold.

The US Justice Department filed a motion in a Maryland District Court on 3 July, on behalf of the US Food and Drug Administration (FDA), seeking the legal intervention to obtain records from Ranbaxy. The specific claims under investigation include fabricating bioequivalence and stability data in order to support new drug applications filed with FDA for generic pharmaceuticals.

However, the court documents have got the FDA itself into hot water. The papers indicate the regulator was aware of the allegations against Ranbaxy for 18 months, but ’did nothing to remove the suspect products from the market, or even notify the pharmacists’ of the alleged problems, according to key members of the US House of Representative’s Energy and Commerce Committee.

In a 22 July letter to FDA Commissioner Andrew von Eschenbach, Democratic Congressmen John Dingell and Bart Stupak requested a multitude of documentation from FDA by early August. Dingell heads the committee, and Stupak chairs its Oversight and Investigations Subcommittee.

’Unfortunately, the FDA’s alleged lack of action to remove these suspected products from the market requires this committee to review the pre-market approval inspections of all currently marketed Ranbaxy drugs, as well as any ’for cause’ inspections, to determine if FDA has expended the resources required to justify leaving these suspect drugs on the market,’ write Dingell and Stupak.

FDA spokesperson Chris Kelly says the agency has received the letter from Dingell and Stupak, and will respond to the lawmakers directly.

For its part, Ranbaxy says all its plants are ’compliant’ with current good manufacturing practices and ’produce medicines that meet global norms.’ Furthermore, Ranbaxy says it is in the process of submitting supporting documentation for its new dug applications to the Justice Department and expects this will demonstrate no wrong-doing.

Daiichi deal

The controversy is certainly inconvenient for Japanese pharmaceutical firm Daiichi Sankyo, which announced in June that it had agreed to take a majority stake in Ranbaxy, with a deal valued at up to $4.6 billion. 

Nevertheless, the apparent takeover of Ranbaxy by Daiichi Sankyo seems to be forging ahead. In a 17 July joint statement, the companies reiterated that the agreement is ’binding and final,’ subject to regulatory approvals. Malvinder Singh will continue to lead Ranbaxy as its CEO and Managing Director.

’Daiichi Sankyo, Ranbaxy and the Singh family stand by the deal and confirm that the terms of the deal remain unchanged,’ they state. ’The Share Purchase and Share Subscription Agreement has earlier been unanimously approved by the Boards of Directors of both companies.’

Beyond the problems Ranbaxy is experiencing in the US, the company has also faced prosecution of its UK subsidiary by the country’s Serious Fraud Office (SFO). The legal action resulted from allegations that the company had engaged in price-fixing for some of its penicillin-based antibiotics.

However, Ranbaxy announced on 22 July that the English Crown Court had quashed the eight-year-old case. Price-fixing was not specifically criminalised in the UK until the introduction of the Enterprise Act in 2003 - after the allegations took place. The Court declined an application by the SFO for permission to appeal to the English Court of Appeal, although the SFO has said it will appeal the judgment directly to the Court of Appeal.

Rebecca Trager, US correspondent for Research Day USA

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