FDA/DOJ Ranbaxy Investigation Bleeds Over to Capitol Hill

As widely reported earlier this month, FDA and the Department of Justice (“DOJ”) intensified their investigation of Indian drug company Ranbaxy, Inc.  On July 3, 2008, the government moved to enforce administrative subpoenas directed at Ranbaxy and the company’s consultant, PAREXEL Consulting concerning information about drugs and drug products manufactured at Ranbaxy’s Paonta Sahib, India manufacturing facility.  The motion, filed in the U.S. District Court for the District of Maryland (Southern Division), alleges that Ranbaxy, among other things, falsified documents “that have resulted and continue to result in the introduction of adulterated and misbranded products into interstate commerce with the intent to defraud or mislead.”  Ranbaxy is in the midst of selling a majority stake in the company to Japan-based drug company Daiichi Sankyo for $4.6 billion.  Ranbaxy’s stock took a hit after news of the FDA/DOJ investigation surfaced.

Last week, Ranbaxy responded to the government’s motion and “unconfirmed allegations.”  In a clear attempt to bolster public confidence in the company, Ranbaxy made several commitments “to the Court, the FDA, the DOJ,” and to the company’s “employees, customers, and business partners.”  Among other things, Ranbaxy committed to cooperating with FDA and DOJ in their investigation and states that the company “is in the process of producing requested supporting documentation for its ANDA applications to DOJ.”  Ranbaxy also states that the company “is committed to develop and market high quality generic drug products.  Ranbaxy makes that commitment to its customers, business partners, and employees every day.” 

In addition, U.S. Representatives John Dingell (D-MI), Chairman of the Energy and Commerce Committee, and Bart Stupak (D-MI), Chairman of the Energy and Commerce Committee Subcommittee on Oversight and Investigations, announced late last week that the Energy and Commerce Committee “will soon commence a formal investigation into the Ranbaxy drug approvals and potential violations of GMP regulations.”  Representatives Dingell and Stupak question whether FDA “knowingly allowed drugs suspected of being fraudulently approved and manufactured in gross violation of Good Manufacturing Practices (GMP) to continue being sold by Ranbaxy, Inc., in the United States.” 

By Kurt R. Karst