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May 14, 2013

LITTLE ROCK – Attorney General Dustin McDaniel announced today that Arkansas, other states and the federal government have reached a settlement with an India-based manufacturer of generic medications over allegations that the company introduced adulterated drugs into the U.S. market.

McDaniel and other attorneys general alleged that the pharmaceutical manufacturer Ranbaxy knowingly manufactured, distributed and sold generic drugs with strength, purity or quality that fell below standards required by the U.S. Food and Drug Administration. Ranbaxy’s actions caused false and fraudulent claims to be submitted to the Arkansas Medicaid program.

The state’s Medicaid program, with federal matching funds added, will receive $5,169,317.09 as a result of the settlement.

“When pharmaceutical companies cut corners to increase their profits, it’s taxpayers who bear the costs of those illegal actions,” McDaniel said. “This settlement restores funding to the Arkansas Medicaid program, and I am grateful for the work done by our Medicaid Fraud Control Unit, other states and the federal government on behalf of Arkansas taxpayers and Medicaid beneficiaries.”

Ranbaxy is accused of adulterating 26 generic pharmaceutical products manufactured at its facilities in Paonta Sahib and Dewas, India, at various times between April 1, 2003, and Sept. 16, 2010.

Ranbaxy USA, a subsidiary of Ranbaxy, has pleaded guilty in federal court to seven criminal violations of the U.S. Food, Drug, and Cosmetic Act.

The total settlement amount was $500 million.

The settlement is based on an action filed in U.S. District Court in Maryland.