Updated 5:40 p.m.
A team of Venable attorneys represented drug maker Ranbaxy USA, Inc. in a $500 million settlement with the U.S. Department of Justice, marking one of the biggest drug safety deals ever with a generic drug manufacturer.
Ranbaxy USA, the U.S. subsidiary of Indian generic pharmaceutical manufacturer Ranbaxy Laboratories Limited, pleaded guilty today in federal district court in Maryland to charges rooted in the manufacture and distribution of adulterated drugs made in India. Ranbaxy is India's largest generic pharmaceutical company.
The company agreed to pay a criminal penalty of $150 million in addition to another $350 million to resolve civil claims under the False Claims Act and other state laws. Venable partners W. Warren Hamel, Geoffrey Garinther and Winifred Weitsen represented Ranbaxy.
Hamel is co-chair of the firm’s SEC and white-collar defense practice, and Garinther leads the firm’s litigation division. Weitsen practices in the firm’s SEC and white-collar defense group. Hamel directed a request for comment to the company.
"We are pleased to continue bringing safe, effective and quality medicines to market for the benefit of consumers in the U.S. and other parts of the world," Ranbaxy CEO and managing director Arun Sawhney said in a written statement. "While we are disappointed by the conduct of the past that led to this investigation, we strongly believe that settling this matter now is in the best interest of all of Ranbaxy’s stakeholders; the conclusion of the DOJ investigation does not materially impact our current financial situation or performance."
Assistant U.S. Attorney Stuart Berman, with senior litigation counsel Linda Marks and trial attorney Perham Gorji—both of the Justice Department’s consume protection branch—represented the government in the criminal case against Ranbaxy.
“This is the largest false claims case ever prosecuted in the District of Maryland, and the nation’s largest financial penalty paid by a generic pharmaceutical company for FDCA violations,” Maryland U.S. Attorney Rod Rosenstein said in a statement. “The joint criminal and civil settlement, which reflects many years of work by FDA agents and federal prosecutors, holds Ranbaxy accountable for a pattern of violations and should improve the reliability of generic drugs manufactured in India by Ranbaxy.”
According to the settlement agreement, from April 2003 through September 2010 Ranbaxy allegedly knowingly manufactured, distributed and sold certain drugs that were different strengths and purity and therefore not made according to federal standards. The drugs originated in two of the company's facilities in India. The separate drugs in question were used to treat epilepsy and nerve pain and recalcitrant nodular acne. A third was a broad-spectrum antibiotic.
On the civil side, Ranbaxy will pay $350 million under the False Claims Act over allegations the company caused false claims to be submitted to government health care programs—including Medicaid and Medicare—from April 2003 to September 2010. The federal government gets $231.8 million, and the rest--$118.2 million—is headed for states that are participating in the settlement.
Part of the federal settlement—$48.6 million—is going to whistleblower Dinesh Thakur, a former Ranbaxy executive. Thakur filed a qui tam suit in 2007 in Maryland federal district court. The Justice Department intervened in the case on May 10 for the purpose of a settlement.
Thakur was represented by Stein Mitchell Muse & Cipollone partner Andrew Beato, who wasn’t immediately reached for comment this afternoon.