Indian pharmaceutical company Ranbaxy has agreed to pay $8.7 million to North Carolina as part of a larger settlement stemming from allegations that the company sold generic drugs that failed to meet federal quality standards.
North Carolina's settlement money will go toward Medicaid and the state's public schools, the office of Attorney General Roy Cooper said Friday.
A number of states, including North Carolina, and the federal government alleged that Ranbaxy sold 26 generic drugs manufactured between April 1, 2003 and Sept. 16, 2010 that fell short of standards set by the U.S. Food and Drug Administration.
Ranbaxy agreed to pay a total of $350 million to the states and the federal government to resolve allegations of poor manufacturing practices. It also pleaded guilty to seven felony violations of federal law and will pay $150 million in criminal fines.
The sub-par drugs meant that false or fraudulent claims were submitted to government health care programs, including North Carolina's Medicaid program, according to the Attorney General's office.
"Frauds like this waste taxpayer dollars and potentially put at risk the health and safety of patients," Cooper said in a statement.