National

May 13, 2013 1:43 PM by AP

Drug company agrees to $500 millon penalty

WASHINGTON (AP) - A subsidiary of an Indian pharmaceutical company has agreed to pay $500 million fines and civil penalties for selling adulterated drugs and lying about tests to federal regulators, the Justice Department said Monday.

The guilty plea by Ranbaxy USA Inc. represents the largest financial penalty by a generic drug company for violations of the Federal Food, Drug and Cosmetic Act, which prohibits the sale of impure drugs, prosecutors said.

Ranbaxy, a subsidiary of Ranbaxy Laboratories Limited, admitted that it made and sold impure drugs at two manufacturing sites in India. The batches of adulterated drugs included generic versions of an antibiotic and other medications used to treat severe acne, epilepsy and nerve pain.

The company agreed to a fine and forfeiture of $150 million as well as an additional $350 million penalty to settle civil claims that it submitted false statements to Medicaid, Medicare and other government health care programs.

The company also admitted making false statements to the Food and Drug Administration about dates of stability testing, which detect impurities of a drug and to determinate appropriate storage conditions of it.

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