Michigan gets $2.3 million in drug fraud settlement
Michigan is expected to receive a $2.3 million share of a $500 million settlement of claims that an India-based pharmaceutical manufacturer distributed adulterated drugs.
Michigan's Attorney General Bill Schuette announced the terms of the deal Thursday.
The complaint says that Ranbaxy knowingly made and sold generic products whose quality and purity didn't meet U.S. Food and Drug Administration standards. Ranbaxy is based in Gurgaon, India.
"Michigan consumers should have full faith in the purity of their medicine and not have to worry about their prescription drugs being sold to them under false pretenses," said Schuette. "The Food and Drug Administration has high standards for a reason and companies that try to take shortcuts put the public health at risk. Patients should never have to wonder if they are getting the medicine they pay for."
The investigation resulted from a case filed in the U.S. District Court for the District of Maryland under the federal False Claims Act and various state false claims statutes. The whistleblower's complaint alleged that Ranbaxy knowingly manufactured, distributed and sold generic pharmaceutical products whose strength, purity and/or quality fell below the standards required by the FDA. The products at issue consisted of 26 generic pharmaceutical products manufactured at facilities in Paonta Sahib and Dewas, India at various times between April 1, 2003 and September 16, 2010.
Ranbaxy has agreed to pay the states and the federal government $350 million dollars in civil damages and penalties to resolve civil allegations of poor manufacturing practices in two Indian manufacturing plants. $266,729,715.10 of this amount will go to the Medicaid programs, which are funded jointly by the states and the federal government. The total portion of the settlement amount recovered by Michigan is $2,387,509.40. The remaining $83,270,284.86 is designated for other federal health care programs affected by Ranbaxy's conduct.
Additionally, Ranbaxy USA, a subsidiary, has pled guilty to seven (7) felony counts alleging violations of the U.S. Food, Drug, and Cosmetic Act, and has agreed to pay $150 million dollars in criminal fines and forfeitures. Also, Ranbaxy entered into a consent decree in January 2012 with the federal government to address issues with good manufacturing practices and data integrity issues in the two Indian manufacturing plants involved in this case. These provisions include a wide range of actions to correct its violations and to ensure that the violations do not occur again.
Attorney General Schuette has now collected more than $80 million for the Michigan Medicaid Program as a result of cases and investigations against major drug manufacturers.
A team from the National Association of Medicaid Fraud Control Units (NAMFCU) conducted the settlement negotiations with Ranbaxy on behalf of Michigan and the states.