Ranbaxy grilled by US Justice Dept over Medicaid drug pricing

Indian generic drugmaker Ranbaxy Laboratories Ltd said today on Wednesday that it was questioned by the US Department of Justice on how it reports pricing data for medicines it sells through Medicaid, the US health programme.

The Justice Department has requested documents and information through what is called a civil investigative demand. The inquiry doesn't allege wrongdoing or propose a fine, the Gurgaon-based company said, adding that it would cooperate with the US authorities.

Ranbaxy is in the process of being bought by Sun Pharmaceutical Industries Ltd. It has been hurt by import bans on four of its Indian facilities and increased regulatory costs. This year it also received a subpoena from the US Attorney for the District of New Jersey requesting documents related to its banned ingredient factory in Toansa.

The state of Texas resolved a Medicaid fraud investigation against Taro Pharmaceutical Industries Ltd., a unit of Sun Pharmaceuticals, for fraudulently reporting of inflated drug prices to the Medicaid programme in August. Sun paid $19.5 million to the state and the federal authorities.

In July, Ranbaxy reported a quarterly loss on a one-time provision of Rs2,400 crore ($39 million) because of settlement talks with the US government, without elaborating on the subject of the talks.

Last year, the drugmaker agreed to pay $500 million to resolve fraud allegations made in a whistle-blower's lawsuit and federal criminal charges that the company sold adulterated drugs while lying about it to US regulators.