Ranbaxy to pay $420,000 for sub-standard drugs as part of settlement

Ranbaxy Laboratories, controlled by Japan's Daiichi Sankyo Group, will pay Idaho state in northwestern US nearly $420,000 to settle civil and criminal complaints of selling drugs of inferior strength, purity or quality in a case that dates back "several years".

Idaho had joined several states and the US government in alleging that Ranbaxy products manufactured between April 2003 and September 2010 did not meet US Food and Drug Administration standards and caused Medicaid to pay fraudulent claims.

Medicaid is a US health programme for families and individuals with low income and resources. The alleged 26 sub-standard generic drugs were made at Ranbaxy's factories in Paonta Sahib and Dewas in India.

The company agreed to a $500 million settlement with the federal and state governments. About $266.7 million of that will go to Medicaid programmes that are jointly funded by federal and state taxes.

"Taxpayers expect their tax dollars to be used to pay for a legitimate service," Idaho Attorney General Lawrence Wasden said in a press release. "This settlement reflects our resolve to address losses to the Idaho Medicaid programme caused by individuals and companies."

In an e-mail statement to IANS, Ranbaxy clarified that this was not a new issue. "This amount is part of the $500 million settlement with the US DOJ (Department of Justice), which Ranbaxy announced on May 13, 2013."

On the same day Ranbaxy had said that the investigations pertained to conduct which occurred several years ago, and that the present management had fully cooperated with the DOJ.

It also said that it had since strengthened its data integrity and manufacturing processes to comply with all regulatory requirements, alluding that its drugs made at the two facilities were safe.

Idaho's share of the settlement is $419,914. About half of that will go to Idaho Medicaid as restitution, and about half will go to Idaho's general fund.

The company also pleaded guilty to seven felony counts of violating the US Food, Drug and Cosmetic Act and agreed to pay $150 million in criminal fines and forfeitures.