Arkansas to Get $5.2M in Settlement with Indian Drug Maker

Attorney General Dustin McDaniel announced Tuesday that Arkansas, other states and the federal government have reached a settlement with generic medications manufacturer Ranbaxy of India over allegations that the company introduced adulterated drugs into the U.S. market.

Per the settlement, the state's Medicaid program, with federal matching funds added, will receive $5.2 million. The total settlement was $500 million.

A statement from McDaniel's office salleged that 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." It said the company's actions "caused false and fraudulent claims to be submitted to the Arkansas Medicaid program."

"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 made at its plants in Paonta Sahib and Dewas, India, between April 1, 2003, and Sept. 16, 2010.