Feds Allege Ranbaxy Lied About Quality of Drugs

Federal prosecutors say the company misled the U.S. about its low-cost meds.

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

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

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

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

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

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

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

In the filing earlier this month, Prosecutors say "reliable sources and supporting documents" show the company systematically lied about the makeup of its generic drugs, which include a cheaper version of Merck's blockbuster cholesterol pill Zocor. The FDA approves generic drugs based on evidence they are equivalent to the original medication. The government alleges Ranbaxy's equivalence data contained "false and fabricated information."

Additionally, the government alleges Ranbaxy uses unapproved ingredients 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 already disclosed parts of the documents to the FDA which it thought would help resolve the warning letter.

Official from the Justice Department and the FDA declined to provide further comment, citing the ongoing nature of the case.