Idaho gets $420,000 from Ranbaxy as part of settlement

The settlement resolves civil, criminal allegations that Ranbaxy introduced adulterated drugs into interstate commerce

The US state of Idaho has said it has received almost $420,000 from drug major Ranbaxy as part of a $500 million settlement that the Indian firm had signed with US authorities.

"Idaho has recovered nearly $420,000 in a legal settlement with pharmaceutical manufacturer Ranbaxy," Idaho Attorney General Lawrence Wasden said in a statement.

The settlement resolves civil and criminal allegations that Ranbaxy introduced adulterated drugs into interstate commerce, and, as a result, false or fraudulent claims were submitted to Idaho Medicaid, it added.

"This settlement reflects our resolve to address losses to the Idaho Medicaid program caused by individuals and companies," Wasden said.

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, the statement said.

"$266.73 million of this amount will go to the Medicaid programs, which are funded jointly by the states and the federal government. The remaining $83.27 million is designated for other federal healthcare programs affected by Ranbaxy's conduct," according to the statement.

Idaho's share of the settlement is $419,914.45. Of that amount, $209,957.22 is restitution, which will be returned to Idaho Medicaid, it added.

"The additional recoveries and interest, totalling $218,462.37, 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 programs," it said.

Additionally, Ranbaxy USA, a subsidiary, pleaded guilty to seven felony counts alleging violations of the US Food, Drug and Cosmetic Act and has agreed to pay $150 million in criminal fines and forfeitures, the statement said.

Ranbaxy had entered into a consent decree with the US federal government to address outstanding "current Good Manufacturing Practice" and data integrity issues at two manufacturing plants.

In May this year, Ranbaxy had agreed to pay $500 million to US authorities after pleading guilty to felony charges over violation of manufacturing norms at its plants in Dewas in Madhya Pradesh and Paonta Sahib in Himachal Pradesh.

In 2008, the US FDA had banned the import of 30 generic drugs manufactured by the company at the two plants.