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Did HIV Generic Drug Maker Falsify Data?
  "prosecutors allege the company falsified data in applications for generic drugs to be sold in the United States and HIV/AIDS drugs distributed in Africa and paid for by the Bush administration's Emergency Plan for Aids Relief."
Ranbaxy denies fraud claim, Daiichi Sankyo deal still on track

15 July 2008
Ranbaxy has responded to the motion filed by the US Department of Justice seeking certain documents from the Indian drugmaker as part of an investigation looking into claims that it falsified data on treatments.
The file put before a court in Maryland claims prosecutors in the USA noted that a "pattern of systemic fraudulent conduct" resulted in a number of Ranbaxy's generic drugs that got onto the market in the USA without meeting the Food and Drug Administration?s standards. However, the Gurgaon-based group has filed a response to the motion and says that it "strongly denies the allegations".
Ranbaxy also noted that "no legal proceedings in the sense of a prosecution have been initiated" and it continues to cooperate with the DoJ in regards to the investigation which has been running for three years. Importantly, the company also revealed that it has agreed to produce the specific documents sought by the motion.
Ranbaxy has previously refused to hand over documents from its US-based consultant Parexel, claiming that the audits were protected by attorney-client and work-product privileges. This stance had substantially slowed down the investigation, the DoJ had claimed.
The Indian firm went on to say that no charges have been filed against the company in the three-year period and the FDA has also gathered over 200 random samples of various drugs it markets in the USA. These products have been independently tested by the FDA, it said, "and were found to be complying with all the specifications". Under these circumstances, Ranbaxy says it "finds that the allegations are baseless".
Fears had been aired that the probe could lead Daiichi Sankyo to consider scrapping its proposed $4.6 billion takeover. However Ranbaxy says that the deal is "binding and final and remains on track".
Daiichi Sankyo also confirmed that it had no plans to pull out of the deal, saying that it was already aware of the DoJ investigation and is monitoring the situation.

Ranbaxy Probe Extends to Africa Drugs
Wall St Jnl
July 15, 2008
WASHINGTON -- Ranbaxy Inc., India's largest pharmaceutical company and among the world's biggest generic-drug makers, faces a U.S. investigation into whether it manufactured substandard generic drugs, including allegations that it made weak or adulterated HIV drugs that were given to thousands of AIDS patients in Africa.
Ranbaxy was paid millions of dollars through U.S. government contracts to provide low-cost antiretroviral drugs under the president's emergency plan for AIDS relief. Investigators at the Justice Department and Food and Drug Administration allege that some of the drugs were poorly made, unstable or impotent. According to court filings and lawyers close to the investigation, Ranbaxy fabricated documents to cover up the substandard products. Ranbaxy shares fell more than 10% Monday in London trading after it issued a statement acknowledging the probe from its Gurgoan, India, headquarters. Details of the inquiry, which haven't previously been disclosed, raise difficult questions for the company in the wake of its recent $4.6 billion sale of a majority stake to Daiichi Sankyo Co. of Japan, and a separate pact with Pfizer Inc. reached in June to license a generic version of Pfizer's blockbuster cholesterol drug Lipitor.
In a filing Monday in federal court in Maryland, Ranbaxy said it is cooperating with investigators and will turn over disputed documents sought by the U.S. The company also said the sale of the company and its licensing agreements aren't affected by the U.S. probe.
In the filing, Ranbaxy acknowledged "some serious allegations concerning compliance with U.S. law" but the filing said that "except for issues that have been fully aired with the government, Ranbaxy knows of no evidence to support these allegations." A company spokesman, Chuck Caprariello, declined to elaborate.
In a July 3 court filing, U.S. investigators said the probe involves "a pattern of systematic fraudulent conduct" including allegations of health-care fraud, contract fraud, false claims and fabrication of documents. The filings were intended to force Ranbaxy to release audits of its plants conducted by a consultant; the company had argued that the audits were privileged. Prosecutors also told the court that Ranbaxy routinely lied to the FDA about the formulation of its generic drugs, which include a version of Zocor, Merck & Co's best-selling cholesterol pill. No formal charges have been filed against the company.
In February 2006, FDA agents inspected a Ranbaxy plant in Paonta Sahib, India, and uncovered quality problems, according to warning letters sent by the FDA to Ranbaxy. Feb. 14 last year, agents of the FDA and Federal Bureau of Investigation raided Ranbaxy's U.S. offices in Princeton and South Brunswick, N.J.

Ranbaxy denies any misconduct
Drugmaker to release audits amid fake data allegations

Tuesday, July 15, 2008
Star-Ledger Staff
The Indian pharmaceutical giant Ranbaxy Laboratories yesterday said it would release internal reports to federal prosecutors, who allege the company knowingly produced and sold generic medicines that did not meet U.S. standards. The drugmaker's shares yesterday fell 10.5 percent to their lowest level in seven years in their first trading in India since the investigation was first reported Saturday by The Star-Ledger.
The shares dropped on fears the investigation could derail plans by the Japanese drugmaker Daiichi Sankyo to pay $4.6 billion million for a controlling stake in Ranbaxy, whose U.S. operations are based in Plainsboro. The Food and Drug Administration could ban imports into the United States from two Ranbaxy plants in India that are targeted in the investigation. The drugmaker, which manufactures drugs at 11 sites around the globe, had global sales of $1.6 billion last year.
"The most important question is credibility. Once that's lost, its hard to get it back," said Steve Brozak, senior analysts at WBB Securities in Westerfield. "This is a systemic flaw. I'm not picking on Ranbaxy, but if you have one unethical player, it brings into question to entire system."
Ranbaxy denied wrongdoing, but the probe highlights growing concerns about generic drugs around the world.
Earlier this year, Actavis Totowa, the U.S. headquarters of the Icelandic generic drugmaker, recalled the heart medication Digitek because it contained "twice the active ingredient." Actavis and FDA have not explained how the pills landed on the market.
Late last year, Ranbaxy voluntarily recalled 73 million doses of a generic version of the pain pill Neurontin. FDA has held up final approval Ranbaxy said its internal audits "will demonstrate that no data manipulation, fraud, or dishonesty occurred" in its regulatory filings with the FDA, according to a response filed late yesterday in U.S. District Court in Maryland. Prosecutors alleged a "pattern of systemic fraudulent conduct" by Ranbaxy, including the fabrication of test data at a plant in northern India and the destruction of documents in an attempt to conceal the ruse from FDA inspectors. Specifically, prosecutors allege the company falsified data in applications for generic drugs to be sold in the United States and HIV/AIDS drugs distributed in Africa and paid for by the Bush administration's Emergency Plan for Aids Relief. Ranbaxy complained yesterday federal prosecutors have not disclosed the scope of the probe.
"The government has chosen not to share such information yet," the drugmaker's seven page court filing said. "If and when the government chooses to share the details of its concerns, Ranbaxy commits to responsibly respond to, and resolve, those concerns."
In a separate statement, Ranbaxy said flatly the "allegations are baseless." In a July 3 court filing, prosecutors said "reliable sources and supporting documents" show Ranbaxy systematically lied about the makeup of its generic drugs, which include a cheaper version of Merck's blockbuster cholesterol pill Zocor. The government alleged Ranbaxy used unapproved ingredients and diluted amounts of ingredients in its drugs.
The FDA approves generic drugs based on scientific evidence they are equivalent to the original medication.
The investigation has been underway for two years and in February 2007, federal agents seized papers and electronic records from Ranbaxy's Plainsboro offices and a manufacturing facility in New Brunswick. The raid followed an FDA inspection at the company's plant in Paonta Sahib, India., In recent months prosecutors and Ranbaxy have sparred over a subpoena for internal audits of Ranbaxy's laboratory and quality control by Parexel, the drugmaker's contractor.
Before yesterday, Ranbaxy argued the audits were protected by "attorney-client privilege," court papers said.
Ranbaxy's U.S. division generated $390 million in sales last year -- about a quarter of the company's revenue -- from the sale of generic high cholesterol, hypertension, anti-infectives, seizure and other medications. It introduced 10 products into the U.S. last year.
A spokesperson for Daiichi, Japan's third largest drug maker, said the company "will not change its stance to press ahead with the deal.

Ranbaxy responds to US FDA charges
2008-07-15 16:31:08 Source : Power Breakfast/CNBC-TV18
Ranbaxy has responded to the US FDA charges. The company has agreed to waive all privileges for audits by Parexel. Parexel International is a clinicalresearch organization that provides services for companies in the pharmaceutical, biotechnology and medical device industries, including consulting and clinical studies.
The US government may withdraw motion if documents are submitted in a month. Charges by FDA is a big negative news for Ranbaxy because almost 25% of Ranbaxy's revenues come from US operations. If the case goes against the company, it may be slapped with high penalty and the supply from Indian units may be suspended.
Along with Parexel, Ranbaxy has submitted thousands of documents to the US FDA. Ranbaxy will address all US government concerns. Based on the audit, Ranbaxy had re-examined the stability data submitted to the US FDA.
Based on Parexel's audits, Ranbaxy made several improvements
in 2007. It informed the Department of Justice about the various audits by Parexel.
Ranbaxy feels that the US FDA and Department of Justice asking for voluntary audits is bad policy. If the government forces companies to disclose voluntary audit reports, companies would stop audits, Ranbaxy feels. Ranbaxy's counsel asserted privilege protection for remaining audits. In late 2007, the FDA told Ranbaxy that it would not act on applications from Paonta Sahib. In April 2008, the company submitted specific audits to FDA and waived privilege. The US government agreed to withdraw motion if Parexel submits documents in a month. There has been no data manipulation, fraud or dishonesty in applications, Ranbaxy clarified. The US Government has not shared details of its concerns with Ranbaxy yet.
On the same, Daiichi has responded by saying that it has not made any changes in the acquisition plans. Daiichi has also informed that it knew that US FDA had investigated Ranbaxy's facilities. They also said that they don't want to comment on Ranbaxy-US FDA development and will follow the matter closely.
Ranbaxy versus US FDA: Timeline
- US FDA inspects Ranbaxy's Paonta Sahib plant in Himachal Pradesh
May 2006
June 2006

- FDA inspection office recommends withholding approval for ANDA, API manufactured at Paonta Sahib
February 2007
- Justice Dept raids US Ranbaxy facilities
September 2007
- US govt serves subpoena to Ranbaxy
- Asks for all documents related to audit study
December 2007
- Ranbaxy seeks approval for Clarithromycin in US
- US FDA seeks more information
July 3, 2008
- Justice Dept moves Maryland district court seeking motion to access privilege records of Ranbaxy's internal audits
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