US Justice Department settles with Ranbaxy over violations.

Ranbaxy LaboratoriesRanbaxy Laboratories Ltd. (RBXY) made adulterated, potentially unsafe medicines that were illegal to sell, US prosecutors said in a proposed settlement with the Indian drug maker.

Among alleged violations, Ranbaxy failed to sufficiently separate the production of penicillin and non-penicillin drugs and failed to take sufficient steps to prevent contamination of sterilized medicines, the US Justice Department said in a 58-page document filed in federal court in Maryland yesterday.

The settlement specified proposed changes Ranbaxy, based on the outskirts of New Delhi, and must make to settle the three- year-old dispute. The drug maker set apart $500 million to resolve all latent civil and criminal liabilities related to the US investigation, it said last month. The company didn’t admit or deny the allegations detailed in the settlement, which obliged approval by a federal judge.

Tony West, assistant attorney general for the Justice Department’s Civil Division, said in an e-mailed statement “This action against Ranbaxy is groundbreaking in its international reach — it requires the company to make fundamental changes to its plants in both the United States and India.”

West said that “Our commitment to ensuring that the drugs the American people rely on are safe, effective and manufactured according to the FDA’s standards extends beyond our borders.”

According to the statement, the department in collaboration with the Food and Drug Administration uncovered many problems with Ranbaxy’s drug manufacturing and testing in India, and at facilities owned by its US subsidiary.

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