"The company intends to make a provision of $500 million in connection with the investigation by the US Department of Justice, which the company believes will be sufficient to resolve all potential civil and criminal liability," Ranbaxy said in a filing to the Bombay Stock Exchange (BSE).
The FDA banned import for generic drugs produced by company's two manufacturing plants in India in 2008 on account of providing falsified data and test results in approved and pending drug applications. In 2009, it halted reviews of all drug applications, citing “Investigations revealed a pattern of questionable data”.
After this agreement with FDA, the company will be able to resume sale of drugs in the US from both banned manufacturing plants in India.
The $500 million (approx. Rs 2,638.74 crore) amount for settling the case is far far higher than the market expectation of $200-300 million. But the amount will be sufficient to resolve all liabilities towards civil and criminal investigation.
“We are pleased to have resolved this legacy issue with the FDA as we begin the next chapter in Ranbaxy's history,” Arun Sawhney, CEO and MD of Ranbaxy said in press release.
At 12:30 pm IST, the scrip of Ranbaxy was seen down by 1.19% or 4.70 points at Rs 390.65. It touched a low of Rs 381.45.