Glenmark's subsidiary to pay $25 mn to settle a pricing case

Firm will pay $11.25 mn each to US federal govt and Texas state in 16 tranches spread over four years, besides paying $2.5 mn as legal costs

Pharmaceutical major Glenmark today said its US subsidiary will pay $25 million to the federal government there as well as to the Texas state administration to settle a pricing investigation.

The company will pay $11.25 million each to the US federal government and the Texas state administration in 16 tranches spread over four years, besides paying $2.5 million as the cost of litigation.

"Our subsidiary Glenmark Generics Inc., USA has concluded the pricing investigation by the Texas Attorney General, USA. Under the terms of the agreed settlement, there is no admission of liability.

"Glenmark Generics will make a payment in 16 equal tranches of $1.56 million each quarter for next 16 quarters to the state of Texas," Glenmark said in a BSE filing.

Commenting on the settlement, Glenmark President, North America and Global API Business, Robert Matsuk said: "The settlement amount will not materially impact the organisation's cash-flow."

He further said: "We remain committed to continuing our mission of providing our customers with the finest generic pharmaceutical products in the US and complying with all applicable state and federal pricing requirements."

Elaborating on the settlement agreement, the company said: "Glenmark must pay the state of Texas a total of $11.25 million for the state's general revenue fund. Because the Medicaid programme is jointly funded by the state and the US taxpayers, the federal government is entitled to a percentage of the settlement proceeds."

"The federal government's share is also $11.25 million. Additionally, the Texas Attorney General's Office will receive $2.5 million in attorneys' fees and costs," the company added.