Each country has its own regulatory approaches and frameworks for all facets of pharmaceutical regulation.) Each country has its own regulatory approaches and frameworks for all facets of pharmaceutical regulation. Approaches to regulating the importation of medications is no different. In the United States, there are three important factors that aid in the determination of whether other countries can be relied upon as sources from which prescription medications may be imported:
- Whether the safety of the product can be ensured,
- How the import price compares with domestic prices, and
- how importation might affect the exporting country's pharmaceutical market.
China and India are two of the largest countries from which Canada and the United States import pharmaceutical products. The US imports approximately 40% of all over-the-counter and generic drugs produced in India. According to CNN, the United States imports 40% of its medications from India. While China resists, India allows the US Food and Drug Administration (FDA) to conduct inspections.
The FDA has inspected 160 drug plants in India since July 2012, when the US passed the Food and Drug Administration Safety and Innovation Act. These inspections have revealed that some manufacturing facilities in India have produced medications that were adulterated or contaminated, and manufacturing facilities were often filthy or invested with bugs. The FDA investigators also caught some of the Executives at these manufacturing facilities lying to them, which has led to felony charges.
On May 13, 2013, the United States Department of Justice released its statement regarding these charges. In the largest drug safety settlement with a generic drug manufacturer as of May 2013, Ranbaxy USA Inc, a subsidiary of the generic pharmaceutical manufacturer in India, Ranbaxy Laboratories Limited, pleaded guilty to felony charges with respect to the manufacturing and distribution of adultered drugs manufactured at two Ranbaxy facilities in India. Ranbaxy agreed to pay a criminal fine and forfeiture amounting to US$150 million. Ranbaxy also settled civil claims under the False Claims Act in the United States and other State laws for US$350 million. This is the largest false claims case ever prosecuted in Washington with the largest financial penalty ever paid by a generic company. US Attorney for the District of Maryland said that "[t]he 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."
Here is a summary of Ranbaxy's Settlement Agreement:
- Ranbaxy distributed and sold pharmaceutical products in the United States that were manufactured at Ranbaxy facilities in Paonta Sahib, India and Dewas, India.
- Ranbaxy USA, subsidiary of Ranbaxy Inc. incorporated in Delaware, enters a plea of guilty in the US.
- Ranbaxy Laboratories Limited, incorporated under Indian law with headquarters in Guragaon, India, enters a Consent Decree with USA, which alleges that Ranbaxy violated US codes that prohibit (1) the introduction of adulterated drugs into interstate commerce, (2) the delivery of unapproved new drugs into interstate commerce, (3) failing to make required reports to the FDA, and (4) causing drugs to be adulterated while the drugs were for sale on the US market after shipment in interstate commerce, violating the Food, Drug and Cosmetic Act.
- Individual American states entered into separate settlement agreements, referred to as Medicaid State Settlement Agreements because of Medicaid fraud allegations against Ranbaxy and allegedly engaging in (I) knowingly manufacturing, distributing, and selling in interstate commerce, (II) making false statements (including in annual reports to the FDA) about batches, lots, or portions of lots of medications imported by the US from April 1, 2003 to September 16, 2010, in which the (a) strength of medications materially differed from, or the purity or quality of which fell below the strength, purity, or quality which they were represented to possess, or (b) that were manufactured in a way that differed from its approved formulation by the FDA, making these products unapproved new drugs, in violation of the Food, Drugs and Cosmetic Act.
- The US alleges that Ranbaxy knowingly caused false and/or fraudulent claims to be submitted to, or caused purchases by the Federal Health Care Programs.
According to the statement released by the United States Department of Justice, Ranbaxy USA admitted to introducing batches of adulterated drugs that were produced at Paonta Sahib in 2005 and 2006 including:
- Sotret (Ranbaxy's branded generic form of isotretinoin approved to treat severe recalcitrant nodular acne),
- gabapentin (approved to treat epilepsy and nerve pain), and
- ciprofloxacin (used as a broad-spectrum antibiotic).
Ranbaxy was found to have incomplete testing records and an inadequate program to evaluate the stability characteristics of drugs, which were found by FDA inspections in 2006 and 2008. Ranbaxy also admitted to failing to file required FDA reports in a timely manner for batches of Sotret and gabapentin that had failed testing. Ranbaxy was also aware that certain batches of gabapentin were testing out-of-specification, possessed unknown impurities, and would not maintain their expected shelf life, between June 2007 and August 2007. Ranbaxy failed to notify the FDA and waited until October 2007 to voluntarily recall the product.
Furthermore, Ranbaxy admitted to making false, fictitious, and fraudulent statements in its required reports to the FDA in 2006 and 2007 regarding the dates of stability tests conducted on batches of:
- Amoxicillin, and
- Amoxicillin and Clavulanate Potassium.
Ranbaxy reported stability test dates to the FDA which were weeks or months prior to the actual stability testing dates by Ranbaxy. Moreover, rather than conducting the stability tests at prescribed intervals, months apart, Ranbaxy conducted these tests on the same day or within a few days of each other, resulting in unreliable test results and unreliable shelf life expectations. Ranbaxy also admitted that drug samples waiting to be tested were stored for unknown periods of time in a refrigerator, which failed to meet specified temperature and humidity ranges for FDA-approved stability chambers. Ranbaxy failed to disclose this to the FDA.
Since then, the US FDA has imposed a ban on all of Ranbaxy's India-based factories.
*This is Part 1 of a 2-part post. See Part 2: FDA Investigation "Finds Trash Bags of Data"
- U.S. v. Ranbaxy USA, Inc., JFM-13-CR-0238 (D. Md.)
- Regulatory Action Against Ranbaxy by FDA
- Generic Drug Manufacturer Ranbaxy Pleads Guilty and Agrees to Pay $500 Million to Resolve False Claims Allegations, cGMP Violations and False Statements to the FDA
- Ranbaxy Settlement Agreement
- Statement of Facts - Ranbaxy USA, Inc.
- India raises more concerns about Ranbaxy's India plants