Ranbaxy faces possibility of a permanent injunction in US

The consent decree filed on Wednesday is unprecedented in its scope and requires Ranbaxy to take a wide range of actions to correct its violations and ensure that they do not happen again, said the US Justice Department

Washington: Indian pharma major Ranbaxy faces the possibility of a permanent injunction which requires it to make fundamental changes to its plants both in the US and India and would prevent it from manufacturing drugs at certain facilities in the US, reports PTI.

This follows the US Justice Department’s unprecedented action in filing a ground-breaking consent decree in a court in Maryland at the request of the Food and Drug Administration.

“This action against Ranbaxy is ground-breaking in its international reach—it requires the company to make fundamental changes to its plants in both the US and India,” said Tony West, assistant attorney general for the Justice Department’s Civil Division.

“Our commitment to ensuring that the drugs the American people rely on are safe, effective and manufactured according to the FDA’s standards extends beyond our borders,” Mr West said. 

The consent decree filed on Wednesday is unprecedented in its scope and requires Ranbaxy to take a wide range of actions to correct its violations and ensure that they do not happen again, said the Justice Department.

Among other things, the decree seeks to prevent Ranbaxy from manufacturing drugs for the US market at certain of its facilities until they can do so according to US standards.

Meanwhile, Ranbaxy in a statement in New Delhi said that under the terms of the consent decree, which it signed on 20th December last year, it is committed to further strengthening procedures and policies to ensure data integrity and to comply with current good manufacturing practices.

“Today’s announcement is the next step in the process of finalising our agreement with the FDA to resolve this legacy issue,” Ranbaxy CEO and managing director Arun Sawhney said in the statement.

The consent decree requires Ranbaxy to hire an outside expert to conduct a thorough internal review at the affected facilities and to audit applications containing data from those facilities, withdraw any applications found to contain false data.

It also requires the pharma company to set up a separate office of data reliability within Ranbaxy and hire an outside auditor to audit the affected facilities in the future, the Justice Department said.

These are part of a wide range of actions to correct its violations and ensure that they do not happen again, it added.

Ranbaxy’s Paonta Sahib, Batamandi and Dewas facilities in India have been on FDA import alert since 2008 and Ranbaxy has closed its Gloversville facility. The USFDA had banned 30 generic drugs produced by Ranbaxy at these three units, citing gross violation of approved manufacturing norms.

In the same year, the US Department of Justice had also moved a motion against the company in a local court alleging forgery of documents and fraudulent practice.

The consent decree prevents Ranbaxy from manufacturing drugs for introduction to the US market and for the President's Emergency Plan for AIDS Relief Programme at the Paonta Sahib, Batamandi, Dewas and Gloversville facilities until drugs can be manufactured at such facilities in compliance with US manufacturing quality standards, the USFDA said in a statement.

“Because this company continued to violate current good manufacturing practice regulations and falsify information on drug applications, the FDA took these actions in an effort to protect consumers,” FDA Associate Commissioner for Regulatory Affairs Dara Corrigan said.

The USFDA said Ranbaxy has agreed to relinquish any 180- day marketing exclusivity that it might have for three pending generic drug applications.

The company has further agreed to relinquish any 180-day marketing exclusivity that it may have for several additional generic drug applications if it fails to meet certain decree requirements by specified dates, it added.

The consent decree also contains damages provisions to cover many potential violations of the law and the decree.

“If defendants distribute any drug from the facilities covered by the decree, Ranbaxy shall pay liquidated damages equal to two times the retail value of such drug, not to exceed $10 million in any one calendar year,” USFDA said.

Further, if the company submits an untrue statement in connection with any application filed with the FDA, Ranbaxy shall pay up to $3 million in liquidated damages for each such statement, not to exceed $30 million in any one calendar year, the USFDA added.

Once the consent decree is approved by the court, it becomes a court order with which Ranbaxy must comply or face contempt. “Submitting false data to the FDA in drug applications will not be tolerated,” said Mr West.

“The Department of Justice, in partnership with the FDA, will use all available tools, including civil injunction actions and consent decrees, to ensure the integrity of drug applications and to ensure that all drugs sold in the US meet US standards,” he added.

Through investigation by the department and the FDA, the US government said it uncovered numerous problems with Ranbaxy’s drug manufacturing and testing facilities in India and at units owned by its US subsidiary, Ranbaxy Inc.

These problems included failure to keep written records showing that drugs had been manufactured properly and failure to investigate evidence indicating that drugs did not meet their specifications, the Justice Department said.

The company also failed to adequately separate the manufacture of penicillin drugs from non-penicillin drugs in order to prevent cross-contamination. It also failed to have adequate procedures to prevent contamination of sterile drugs, it added.

Ranbaxy also conducted inadequate testing of drugs to ensure they kept their strength and effectiveness until their expiration date, the department alleged.

 

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Power ministry forwards 12th Plan capacity addition proposal to Plan panel

The power ministry has set a target for adding 76,000 MW of electricity capacity in the 12th Plan (2012-17) and 93,000 MW in the 13th Five-Year Plan (2017-2022). However, the Planning Commission is mulling to fix a target for about 1,00,000 MW of capacity addition in the power sector

New Delhi: The ministry of power is believed to have sent its proposal for addition of 76,000 MW of power capacity in the 12th Five-Year Plan to the Planning Commission, even as the sector battles acute fuel shortages and environmental issues, reports PTI.

The power ministry has set a target for adding 76,000 MW of electricity capacity in the 12th Plan (2012-17) and 93,000 MW in the 13th Five-Year Plan (2017-2022). The ministry is understood to have sent the recommendation to the Plan panel.

“We have finalised 76,000 MW capacity addition for the 12th Plan and 93,000 MW for the 13th Plan... Now the Planning Commission has to approve it,” a power ministry official told PTI.

Planning Commission member BK Chaturvedi had earlier said the Planning Commission may fix a target for about 1,00,000 MW of capacity addition in the power sector.

During this period, an investment of about Rs6 lakh crore is expected in power generation projects.

The government had earlier set a goal for adding 78,577 MW of electricity capacity during the 11th Five-Year Plan, which was scaled down to 62,000 MW by the Planning Commission in its mid-term review, citing environmental and land acquisition hurdles.

However, power minister Sushilkumar Shinde recently said the sector would not be able to achieve even the revised target and may end up adding 52,000 MW during the five-year period to March 2012.

The remaining capacity addition target would be carried forward to the next Plan.

He said the country has achieved about two-and-a-half times the capacity addition witnessed in the 10th Plan.

The power ministry may not be able to meet its target for the 11th Plan due to environmental issues and coal and gas shortages.

Power projects being executed by state-owned hydro-power generation company NHPC, which were scheduled for commissioning during the current Plan, would now start electricity generation in the 12th Plan.

NHPC’s 2,000-MW Subansiri project in Assam and 3,000-MW Dibang project in Arunachal Pradesh are still awaiting environment clearances.

The country’s largest power producer, NTPC, which had set itself a mammoth target of becoming a 75,000 MW company by 2017, is also believed to have brought down this target to 70,000 MW because of scarcity of gas.

 

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Finance ministry for higher excise duty on diesel cars

The oil ministry has argued that the additional amount garnered can be used to make good a part of the loss that fuel retailers incur on the sale of diesel at government-controlled rates. The retailers are expected to incur a loss of about Rs82,000 crore in 2011-12

New Delhi: Diesel car buyers may have to shell out more with the finance ministry considering the imposition of higher excise duty on such vehicles in the upcoming Budget likely to be unveiled sometime in March, reports PTI.

In order to discourage consumption of subsidised diesel by personal vehicle owners, the petroleum ministry had suggested the imposition of higher duty on the purchase of diesel cars to the finance ministry.

“We are working on the proposal to impose higher excise duty on diesel cars,” a senior finance ministry official said.

While the petroleum ministry has been asking for a hike in the excise duty on diesel cars, the heavy industries ministry is opposing the move.

The oil ministry has argued that the additional amount garnered can be used to make good a part of the loss that fuel retailers incur on the sale of diesel at government-controlled rates. The retailers are expected to incur a loss of about Rs82,000 crore in 2011-12.

The higher duty would also prevent ‘dieselisation’ of the economy, it has been reasoned.

The Kirit Parikh Committee on Energy had also suggested a one-time additional excise duty of Rs80,000 on diesel cars, arguing that it would offset the higher excise duty on petrol.

Petrol cars up to 4 metres long and with a 1,200-cc engine capacity and diesel cars up to 4 metres long with a 1,500-cc engine capacity attract 10% excise duty.

In addition, petrol cars longer than 4 metres and with an engine capacity above 1,200-cc and diesel cars more than 4 metres in length and with an engine capacity above 1,500-cc attract excise duty at the rate of 22%, plus Rs15,000.

The diesel price of Rs40 a litre in Delhi is Rs14.57 lower than its imported cost.

Diesel is the most consumed fuel in the country but is sold at a discount to its imported cost. The current diesel subsidy is Rs14.57 per litre and on an annualised basis this amounts to Rs82,000 crore out of the total fuel subsidy, estimated at Rs 136,936 crore in the current fiscal.

Subsidised diesel is the preferred fuel for the transport sector (both trucks and passenger buses) and is also used in irrigation pumps and other agriculture equipment.

Luxury cars and SUVs also run on diesel and so do power generators at malls and telecom towers.

It has long been argued that the rich should not get subsidised fuel. According to oil ministry estimates, 15% of diesel consumption is accounted for by personal cars and SUVs.

As per official figures, in the last 15 years—with the exception of 1996-97 and 2004-05—petrol growth has been generally more than diesel.

However, in April-November 2011, diesel growth stood at 7.4%, as against the petrol growth rate of 4.3%. Similarly, the growth rate of diesel in November 2011 was 16% against November 2010 as compared to a negative growth of -2.4% in petrol.

 

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