Whistleblower who Exposed Fraud by India’s Largest Drug Maker Pockets $49 Million in Settlement

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Early this week, India’s largest drug maker, Ranbaxy, paid a $500 million fine to settle an eight-year-long battle with the U.S. Food and Drug Administration (FDA).

According to a MoneyControl.com report, whistleblower Dinesh Thakur “single-handedly brought drug maker Ranbaxy to its knees before the U.S. FDA.” Thakur had served as the company’s director and global head of Research Information and Portfolio Management from 2003 to 2005, and went on to unravel “the most high-profile generic drug violation case in the U.S. to date.”

Thakur first reported to management in 2005 that falsified data was coming out of the company’s Ponta Sahib and Dewas plants in India, MoneyControl.com reported. But management took no steps to address his exposure of the fraud, so he brought his concerns to the FDA. This led to the filing of civil and criminal charges against Ranbaxy and some senior directors.

With Ranbaxy pleading guilty to felony charges and agreeing to pay the $500 million fine to settle the civil and criminal cases, Thakur will pocket $48.5 million under the whistleblower provision of the U.S. False Claims Act, MoneyControl.com reported.

“It took us eight years to help government authorities unravel a complicated trail of falsified records and dangerous manufacturing practices that threatened to compromise the quality and safety of Ranbaxy drugs,” Thakur said in a statement. “This case highlights the need for effective regulation that applies to drugs sold in the United States, regardless of where they are manufactured.”

These charges in fact have cost Ranbaxy more than $50 million, MoneyControl.com reported. A three-year ban on importing over 30 drugs to the U.S. was imposed on the company. The antibiotics ciprofloxacin, cefaclor and amoxicillin, the acne drug Sotret, and Gabapentin, a compound used to treat epilepsy and certain kinds of nerve pain, are among the drugs cited as failing to meet FDA standards, according to a Bloomberg report.

The company also received no new FDA drug approvals until December 2011, when it signed a Consent Decree. In addition, Ranbaxy forfeited a 180-day window of exclusivity for three of its drugs, which translates into a loss of around $300 million, and surrendered applications on 27 compounds.

The Ranbaxy case has highlighted the fact that drug companies, especially global ones, need to be diligent about data reporting, MoneyControl.com noted.