Feds Allege Ranbaxy Lied About Quality of Drugs

July 14, 2008— -- WASHINGTON (AP) - Federal prosecutors allege that Indian genericdrugmaker Ranbaxy Laboratories deliberately misled the U.S.government about the quality of its low-cost medicines.

The Justice Department is demanding Ranbaxy turn over documentswhich it hopes will prove the company fabricated data to convincethe U.S. government to approve its products.

Prosecutors made the allegations in a motion filed July 3 withthe U.S. District Court of Maryland. The filing asks the court toorder Ranbaxy to turn over the documents.

Ranbaxy called the allegations "baseless," in a statementMonday, but said it would cooperate with the investigation.

Ranbaxy is India's largest pharmaceutical company and claims tobe the 10th largest generic drugmaker in the world.

The government has been investigating Ranbaxy since 2006, whenthe Food and Drug Administration issued a warning letter overmanufacturing violations found at a company plant in India. Ranbaxyofficials have been trying to resolve the issue with U.S.regulators since.

Last year, government officials seized paper and electronicdocuments from Ranbaxy's U.S. headquarters in New Jersey.

In the filing earlier this month, Prosecutors say "reliablesources and supporting documents" show the company systematicallylied about the makeup of its generic drugs, which include a cheaperversion of Merck's blockbuster cholesterol pill Zocor. The FDAapproves generic drugs based on evidence they are equivalent to theoriginal medication. The government alleges Ranbaxy's equivalencedata contained "false and fabricated information."

Additionally, the government alleges Ranbaxy uses unapprovedingredients and diluted amounts of ingredients in its drugs.

Ranbaxy previously argued that the documents were proprietary,according to the court filing. But prosecutors say Ranbaxy alreadydisclosed parts of the documents to the FDA which it thought wouldhelp resolve the warning letter.