India's Largest Generic Drugmaker Ranbaxy Pays $500 Million to Settle Systemic Generic Drug Manufacturing Fraud

India's Largest Generic Drugmaker Ranbaxy Pays $500 Million to Settle Systemic
                       Generic Drug Manufacturing Fraud

PR Newswire

WASHINGTON, May 13, 2013

Stein Mitchell Muse & Cipollone LLP Announces Largest Generic Drug
Whistleblower Settlement in History

WASHINGTON, May 13, 2013 /PRNewswire-USNewswire/ -- Stein Mitchell Muse &
Cipollone LLP announced today that Ranbaxy Laboratories Limited ("Ranbaxy"),
India's largest generic drug manufacturer, has agreed to pay $500 million to
the United States and individual States to resolve allegations by the law
firm's client, Dinesh S. Thakur, that Ranbaxy falsified drug data and
systemically violated Current Good Manufacturing and Laboratory Practices
resulting in substandard and unapproved drugs. The groundbreaking settlement
is the largest of its kind against a generic drug manufacturer under the qui
tam provisions of the False Claims Act ("FCA").

Today's settlement was due to the extraordinary efforts of whistleblower
Dinesh Thakur. As a former Ranbaxy Director and Global Head, Research
Information & Portfolio Management, Mr. Thakur learned of Ranbaxy's wrongdoing
and reported the findings to company management who failed to correct the
problems. In 2005, Mr. Thakur left the company and reported the fraud to
government authorities. For the next eight years, he worked to expose and
document the complex and well-hidden fraud.

With the assistance of his counsel Andrew M. Beato and Bob Muse of Stein
Mitchell Muse & Cipollone in Washington, DC, Mr. Thakur filed a whistleblower
lawsuit in 2007 under the FCA detailing Ranbaxy's violations. Filed in the
United States District Court for the District of Maryland (Civ. No.
1:07-cv-00962-JFM), the lawsuit alleges that Ranbaxy caused false claims for
payment to be submitted to government healthcare programs for numerous
adulterated drugs. The FCA's qui tam provisions allow whistleblowers to report
fraud on a government program with the protection of a court-ordered seal and
confidentiality, and receive a percentage of the amount recovered in a
successful case.

Mr. Thakur's lawsuit, which was joined by the Department of Justice and
participating States, alleges wide-ranging manufacturing violations in
Ranbaxy's facilities in India and the United States, including inadequate
testing to ensure that the drugs were safe, effective, free of
cross-contamination, and manufactured in compliance with their approved
specifications. Moreover, Mr. Thakur alleges that Ranbaxy falsified
information about the drugs, including backdating tests and submitting false
data where no tests were performed. The pervasive violations are alleged to
have adulterated dozens of generic drugs purchased by government healthcare
programs such as Medicare and Medicaid, as well as generic antiretroviral
drugs purchased by the United States under the President's Emergency Plan for
AIDS Relief.

As a result of today's $500 million settlement, the government will obtain
approximately $350 million in civil penalties and $150 million in criminal
penalties. Mr. Thakur will receive 21 percent of the federal and participating
Medicaid States' civil recoveries. Ranbaxy USA, Inc. has entered a plea of
guilty to six felony counts in a criminal information filed by the United
States, including introducing into commerce adulterated or misbranded drugs.

Andrew Beato, head of the False Claims Act and Whistleblower Practice Group at
Stein Mitchell Muse & Cipollone and counsel to Mr. Thakur, stated that "This
case was fueled by the extraordinary courage of Dinesh Thakur. Without
expectation of gain and at great risk, he reported the fraud to ensure that
patients' health was not compromised by the quality of Ranbaxy drugs." Mr.
Beato said that "Nearly 80 percent of the generic drugs taken by American
consumers trace to overseas manufacturing facilities. These drugs must comply
with FDA quality and manufacturing requirements. The settlement today is a
significant step toward achieving that outcome. The message is clear that
there are severe consequences if a company breaks the rules and takes
shortcuts that sacrifice drug quality in pursuit of profit."

The settlement resolves a sweeping, multi-year investigation by numerous
government agencies including the DOJ and FDA to uncover and document
deficient current good manufacturing and laboratory practices affecting the
quality of Ranbaxy's generic drugs. It is the capstone to numerous legal
actions against Ranbaxy growing out of the eight-year investigation started by
Mr. Thakur's disclosure of the problems to the government in 2005. These legal
actions include (1) a 2007 FDA raid on Ranbaxy's United States offices, (2)
FDA's imposition of its Application Integrity Policy on Ranbaxy plants in
India due to pervasive data falsification in 2009, (3) FDA's banning of more
than 30 Ranbaxy drugs from entering the United States, (4) numerous FDA
warning letters for manufacturing violations, and (5) the entry of a Consent
Decree and permanent injunction prohibiting Ranbaxy from introducing into
interstate commerce drugs made at various facilities in India and the United

Bob Muse, a partner at Stein Mitchell Muse & Cipollone, commented that "This
high-profile case is a strong reminder of the power of the FCA and exemplifies
the important role whistleblowers play in the public-private partnership to
prevent government fraud. It is another confirmation that people who report
fraud even beyond our borders can expect to be treated fairly and in a manner
that encourages them to come forward."

The settlement today reflects the extraordinary efforts of the United States
Attorney's Office for the District of Maryland, DOJ, FDA's Office of Criminal
Investigations, HHS, TRICARE, USAID, and State Medicaid Fraud Control Units to
ensure the quality and safety of generic drugs.

Stein Mitchell Muse & Cipollone LLP successfully advocates on behalf of
businesses and individuals in whistleblower and complex civil litigation,
arbitration and transactional matters, as well as criminal, administrative,
and congressional investigations. As a premier nationally-recognized
litigation firm based in Washington, DC, our attorneys practice before federal
and state courts and agencies nationwide. Our experienced, tested litigators
and seasoned investigators work with leading forensic accounting and subject
matter experts to deliver winning results for our clients. Visit our website

Andrew M. Beato (
Bob Muse (
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Stein Mitchell Muse & Cipollone LLP
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