Daiichi Sankyo-controlled 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 and quality. This is part of the $500 million penalty that Ranbaxy agreed to pay to US authorities, in May, after pleading guilty for not meeting US Food and Drug Administrations’s Good Manufacturing Practices when making drugs at its two facilities.
Idaho had joined several states and the US government in alleging that Ranbaxy products manufactured between April 2003 and September 2010 did not meet USFDA standards and caused Medicaid to pay fraudulent claims. Medicaid is a US health programme for families and individuals with low income and resources. About $266.7 million of the $500 million will go to Medicaid programmes that are jointly funded by federal and state taxes.
The alleged 30 substandard generic drugs were made at Ranbaxy’s factories in Paonta Sahib and Dewas in India.
“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 general fund is the pool of money the legislature uses to fund the state’s share of Idaho Medicaid as well as other programmes,” said the statement.
As part of the settlement with US authorities, Ranbaxy had agreed to pay the states and the federal government $350 million in civil damages and penalties and $150 million in criminal fines and forfeitures.
Ranbaxy had entered into a consent decree with the US federal government to address outstanding “current Good Manufacturing Practice” and data integrity issues at the two manufacturing plants. In 2008, the USFDA had banned the import of 30 generic drugs manufactured by the company.