Ranbaxy USA agreed last week to pay a staggering $500 million in fines, forfeitures, and penalties to settle claims brought under the False Claims Act and related state law – the largest generic drug safety settlement to date. According to the Department of Justice, in reaching the settlement, the generic drug manufacturer pleaded guilty to felony charges related to the manufacture and distribution of certain adulterated drugs made at two of its manufacturing facilities in India.
The whistleblower in the case, Dinesh Thakur, will receive more than $48 million under federal whistleblower laws. Dinesh Thakur had been Raxbury’s director of research information and project management when he learned in 2004 of massive adulteration and testing problems with several of Raxbury’s generic drugs. In 2007, well after he blew the whistle internally, he filed a confidential whistleblower complaint that described how the company “fabricated and falsified data to win FDA approvals.”
This case highlights what might be just the tip of the iceberg with respect to alteration, testing, and regulatory oversight problems in the generic drug industry. According to CNN, more than 80% of active pharmaceutical ingredients for all U.S. drugs currently come from overseas, as do 40% of finished pills and capsules. But only 11% of foreign drug manufacturing plants are inspected compared with 40% of domestic drug manufacturing plants. This is just one of the many reasons why whistleblowers like Mr. Thakur are so instrumental to keeping patients and the public safe.
C.R. Bard Inc. has agreed to pay $48.26 million to resolve claims that it knowingly submitted false Medicare claims for brachytherapy seeds used to treat prostate cancer. Allegations against Bard included claims that, from 1998 to 2006, the company provided illegal kickbacks to customers and physicians to induce them to buy its seeds. The alleged kickbacks came in the form of grants, guaranteed minimum rebates, conference fees, marketing assistance, and free medical equipment that Bard paid to doctors who used the seeds to perform treatment for prostate cancer.
C.R. Bard will also pay an additional $2.2 million and agreed to take numerous remedial steps and to enhance its corporate compliance program to prevent similar illegal conduct from occurring in the future.
Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder announced last week that 89 people, including 14 doctors and nurses, have been charged in separate Medicare scams spanning eight cities. Collectively, the alleged scams resulted in approximately $223 million in fraudulent Medicare payments. The charges stem from the joint efforts of the Justice Department and the Health and Human Services Department to crack down on Medicare fraud by allocating additional money and staff to fight Medicare fraud and creating strike forces in certain “fraud hot spots” around the country. Miami has long been known to be one such “fraud hot spot,” as was the case in the latest arrests, with 25 of the people charged in Miami. Nearly 20 people, including two doctors, a physician's assistant and two therapists, were charged in various scams in Detroit, and 13 arrests were made in Los Angeles.
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