Ranbaxy whistleblower pockets $48.5mn for settlement

It was a historic day for Ranbaxy, which settled an 8-year long battle with the US Food and Drug Administration (US FDA) for a massive 500 million dollars. CNBC-TV18’s Archana Shukla takes a closer look at Dinesh Thakur, the man who blew the whistle on Ranbaxy, and kicked off a legal battle that other generic drug makers will take notes from.

Dinesh Thakur single-handedly brought drug maker Ranbaxy to its knees before the US FDA. He was director and global head of Research Information and Portfolio Management at Ranbaxy Laboratories between 2003-2005. He went on to become the man who unraveled the most high profile generic drug violation case in the US to date.
It began in 2005, when he first reported falsified data from Ranbaxy's Ponta Sahib and Dewas plants to the management and when no steps were taken, took his concerns over these falsified records and violations of US Drug manufacturing rules to the US FDA. This led to civil and criminal charges against Ranbaxy and some of its senior directors.
After 8 years, his efforts have been rewarded. With Ranbaxy pleading guilty to felony charges and agreeing to pay a fine of 500 million dollars to settle the civil and criminal cases, Thakur has received a 48.5 million dollar payment under the whistleblower provision in the US False Claims Act. Thakur's identity as the whistle blower was revealed by the US Department of Justice on Monday after the settlement was reached.
Dinesh Thakur, former Ranbaxy employee turned whistleblower says, “ 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. This case highlights the need for effective regulation that applies to drugs sold in the United States, regardless of where they are manufactured.”
The trial has cost Ranbaxy dearly. First came a 3-year import ban in the US for over 30 drugs. During that time, it received no new drug approvals from the US FDA, until December 2011 when it signed a Consent Decree.
As part of the decree, Ranbaxy also forfeited 180-day exclusivity on 3 drugs, which translates into around 300 million dollars in lost opportunity. Ranbaxy also had to surrendered new drug applications on 27 compounds.
Add that to the 500 million dollar fine, and it nullifies any gains from Ranbaxy's blockbuster US launches like Atorvastatin. But the bigger damage is to Ranbaxy's image.
Anmol Ganjoo, Pharma Analyst, Antique Broking says, “It does not speak very highly of the processes that were followed by Ranbaxy. There will be a brand hit as far as the US market is concerned. In case of Ranbaxy, we have seen that typically, there are spill-overs in other markets as well.”
Forget Ranbaxy, Thakur's actions have a greater ramification for the global generic pharma sector. As the Ranbaxy case progressed, it has brought home the fact that companies, especially those that operate on a global scale, need to be extremely careful and diligent with their data reporting. Some also see it as a call for countries like India to adopt a Whistleblower Act that will bring such deficiencies into the limelight.