Consent decree: A ‘tight noose for pharma firms'

P. T. Jyothi Datta Mumbai | Updated on November 13, 2017 Published on December 22, 2011

Less than 2% of companies come out process clean, say industry mavens

It is like working with a tight noose around your neck — that is the rather sinister definition of a “consent decree” given by a drug company executive handling regulatory affairs .

In fact, only two per cent of companies who go through this process come out of it clean, he adds, giving the broad contours of a consent decree and its impact on companies in general.

Drug-maker Ranbaxy's recent announcement that it had signed a consent decree with the United States Food and Drug Administration (USFDA), and that it would take corrective measures, may be seen as light at the end of the tunnel for the company.

But a consent decree with the regulatory agency could go on for five years and less than two per cent come out of it, the senior executive said, without giving further details. Responding to why companies go in for this option, if indeed only two per cent come out clean, he said it was a face-saving option, to tell the world that the company was serious about remedying the situation.

In the past, drug-majors like Schering-Plough, Johnson and Johnson and Eli Lilly have signed consent decrees. But others like Able Labs or Par Labs in the US have had to shut down their plants, he added.

Ranbaxy, had on its part, committed to strengthen procedures and policies to ensure data integrity and comply with current good manufacturing practices. The consent decree is subject to approval by the United States District Court for the District of Maryland, the company said.

And, in a separate development, the company also made a provision of $500 million for investigation by the US Department of Justice — that the company believed was sufficient to resolve potential civil and criminal liability.


When you sign the consent undertaking with the agency there is a “severity and criticality” to the conditions that you have to adhere to, as compared to a “483 observation”, an executive with another drug company, who also handles regulatory affairs, explained. In observations made on the 483 form, the company is let off the hook if it takes preventive measures. But if concerns persist over safety, efficacy and quality of the drugs coming into the country – the US, in this case – a warning letter is issued, he added.

Large drug-companies, with deep pockets, are able to abide by the stringent requirements during this period, but that may not be possible for smaller companies and the clean-up process could result in shutting down plants. Industry-watchers now closely watch if Ranbaxy's Japanese parentage and backing will help the company pull through, and be part of the two per cent who come out clean.

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Published on December 22, 2011
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