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RI to get $291,000 in adulterated drug settlement

PROVIDENCE, R.I. (AP) -- Rhode Island is expected to get $291,000 as part of a multistate settlement with an Indian pharmaceutical company accused of selling adulterated drugs.

Attorney General Peter Kilmartin on Tuesday announced the state's portion of the $500 million settlement with Ranbaxy that resolved federal criminal and civil complaints.

He said the company's conduct led to false or fraudulent claims being submitted to Rhode Island's Medicaid program. The state's settlement money will go to the Medicaid program.

"With Medicaid being one of the greatest costs to states, it is imperative that each dollar is spent properly, and not diverted by providing substandard medications to unknowing providers and patients," Kilmartin said in a statement.

The complaint alleged the company knowingly manufactured, distributed and sold 26 generic drugs whose strength, purity or quality failed to meet U.S. Food and Drug Administration standards.

The medications included an acne drug, drugs for epilepsy and nerve pain and an antibiotic.

Ranbaxy CEO and managing director Arun Sawhney said in a statement the company is "disappointed by the conduct of the past" that led to the investigation but that it believes settling the matter is in the best interest of its shareholders.

Under the settlement Ranbaxy agreed to pay states and the federal government $350 million in civil damages and penalties to resolve allegations of poor manufacturing practices. The total includes $267 million for Medicaid programs and $83 million to other federal health care programs.

Kilmartin's office said Ranbaxy USA also has agreed to pay $150 million in criminal fines and forfeitures. And federal prosecutors say Ranbaxy's guilty plea represents the largest ever financial penalty against a generic drug company for drug safety violations.