On the eve of a trial, Sun Pharmaceuticals has agreed in principle to pay $485 million to settle lawsuits that alleged its Ranbaxy Pharmaceuticals unit misled regulators in order to win exclusive approvals for generic medicines, which delayed competition and forced consumers to overpay for the drugs. The settlement was disclosed in a filing with the Bombay Stock Exchange.
The lawsuits stemmed from a scandal that erupted more than a decade ago after U.S. authorities learned Ranbaxy, which was one of the biggest generic makers, falsified testing data and manufactured drugs that failed to meet safety standards. In 2013, the company, which is now part of Sun, pleaded guilty to felony charges and paid a $150 million penalty, as well as $350 million to settle civil claims.
The episode triggered extensive concerns about the quality of the pharmaceutical supply chain originating in India, which is home to a growing number of generic drugmakers that distribute medicines across the globe. In the U.S., generics had already occupied a growing share of the overall market and today account for roughly 90% of prescriptions that are filled.
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