On January 23, 2014, the FDA banned another Ranbaxy Laboratories, Ltd. facility from producing and distributing drugs for the U.S. market. The FDA inspection unveiled serious violations, including misreported and manipulated test findings. Since 2008, the FDA has prohibited four facilities from the major Indian generics manufacturer, and the company has paid $500 million fines, forfeitures, and penalties- the largest amount ever levied against a generic manufacturer- after pleading guilty to “selling adulterated drugs with intent to defraud, failing to report that its drugs didn’t meet specifications, and making intentionally false statements to the government.” To read more about fraud at Ranbaxy, click here.
More than 80 percent of active pharmaceutical ingredients as well as 40 percent of finished drug products come from overseas, highlighting the need for increased FDA efforts abroad to ensure prescription drug safety. The Government Accountability Office (GAO) found in 2009 that regulators inspected only 11 percent of foreign drug manufacturing plants, as opposed to 40 percent of domestic plants. The FDA has worked to bring foreign inspections to the same standards as domestic ones, recently allocating resources to increase their presence in China. However, as noted by the GAO, logistical issues prevent the FDA from conducting thorough and unannounced inspections overseas as it does for domestic manufacturers.
The FDA is currently researching the impact of the most recent Ranbaxy ban on domestic drug supplies. But stories such as Ranbaxy’s can also have a negative effect on consumer confidence and willingness to use generic drugs.