Ranbaxy to pay $420,000 in US for selling sub-standard drugs

Indian generic drug manufacturer Ranbaxy 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.

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."

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.