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Generic drug manufacturer to pay $500m in fines

WASHINGTON — A subsidiary of India’s largest pharmaceutical company has agreed to pay a record $500 million in fines and penalties for selling adulterated drugs and lying to federal regulators in a case that is part of an ongoing crackdown on the quality of generic drugs flowing into the United States.

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

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As part of the settlement, Ranbaxy agreed to pay more than $2.65 million to the Massachusetts Medicaid program, according to state Attorney General Martha Coakley’s office.

The settlement concludes a years-long federal investigation into Ranbaxy’s manufacturing deficiencies. The Food and Drug Administration had earlier barred from the company from importing more than 30 different drugs made at factories in India and struck a deal that required the company to ensure that data on its products is accurate and to improve its drug-making procedures.

The subsidiary of Ranbaxy Laboratories Limited admitted making and selling impure drugs at two sites in India. Prosecutors said the batches of adulterated drugs, whose strength, purity, or quality differed from specifications, included generic versions of an antibiotic and other medications to treat severe nodular acne, epilepsy, and nerve pain.

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It is not known whether the problems with the drugs led to any health issues. The problems were largely revealed by a whistle-blower in a federal lawsuit. The federal allegations against the company make no claims that the drugs harmed anyone.

The company admitted to a wide range of deficiencies, including improperly storing drug samples waiting to be tested, continuing to sell a drug even after it had failed purity tests, and waiting months to voluntarily recall medication that it knew would not maintain its expected shelf life.

Ranbaxy also admitted making false statements to the FDA in 2006 and 2007 annual reports about dates of tests. In some cases, the tests were done months after the company said they had been performed. Or the tests were done on the same day — or within days of each other — rather than months apart, the prescribed interval.

The firm cooperated with the inquiry, which it said involved actions from years ago, and expects ‘‘future growth in the US and around the world.’’

‘‘While we are disappointed by the conduct of the past that led to this investigation, we strongly believe that settling this matter now is in the best interest of all of Ranbaxy’s stakeholders; the conclusion of the DOJ investigation does not materially impact our current financial situation or performance,’’ Ranbaxy chief executive Arun Sawhney said.

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