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US slaps $50m penalty on Indian drugmaker for deleting files

(ATF) An Indian pharmaceutical company has been forced to pay $50 million after pleading guilty to concealing and destroying records prior to a US Food and Drug Administration (FDA) plant inspection, the US Department of Justice announced on March 23.

Prosecutors charged Fresenius Kabi Oncology Ltd (FKOL) with violating the Food, Drug and Cosmetic Act by failing to provide its records to FDA investigators.

The company settled with the US Department of Justice by pleading guilty to a lesser misdemeanour charge plea and sentenced FKOL to pay a criminal fine of $30 million, forfeit an additional $20 million, and implement a compliance and ethics programme.

The charges were related to FKOL’s manufacture of cancer drugs intended for terminally ill patients. FKOL is the Indian unit of German company Fresenius Kabi. The US was investigating the unit over drug purity.

“By concealing and destroying drug manufacturing records, FKOL undermined FDA’s regulatory authority and placed vulnerable consumers at risk,” Acting Assistant Attorney General Brian M. Boynton said in a statement. “Today’s sentence holds the company accountable for its past conduct and seeks to ensure it will fully comply with its obligations to the FDA going forward.” 

According to court documents, FKOL owned and operated a manufacturing plant in Kalyani, West Bengal, that manufactured active pharmaceutical ingredients used in various cancer drug products distributed in the US.


Prior to a January 2013 FDA inspection of the Kalyani facility, FKOL plant management directed employees to remove certain records from the premises and delete other records from computers that would have revealed FKOL was manufacturing drug ingredients in contravention of FDA requirements, US prosecutors said.

The Kalyani plant employees removed computers, documents, and other materials from the plant and deleted spreadsheets that contained evidence of the plant’s noncompliant practices.

“Today’s sentencing reflects our office’s and the department’s commitment to holding accountable companies that disregard FDA regulations, at the risk of consumers’ health and safety,” Acting US Attorney Christopher Chiou said.

“Together with our agency partners, we will continue to ensure that drug manufacturers fully comply with their obligations to maintain the integrity of records and data.”

FKOL is not the first Indian drug manufacturer to fall foul of the FDA this year. In February, US authorities slapped an import order on Shilpa Medicare over its facility in Jadcherla, Telangana.

The US regulator inspected a unit of the company’s facility and found products in violation of the FDA’s laws and regulations. It had already been issued with a warning letter in October 2020.


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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.


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