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Dr. Reddy's settles US DOJ packaging probe for $5M

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Dr. Reddy's settles US DOJ packaging probe for $5M

Dr. Reddy's Laboratories Ltd. agreed to pay $5 million to settle a probe by the U.S. Justice Department regarding packaging for five blister-packed prescription products.

The India-based company disagreed with allegations that packaging for the medicines violated the Consumer Product Safety Act, but said it chose to settle to avoid unnecessary costs of prolonged litigation. The company and the DOJ agreed to the settlement without any adjudication.

The probe began in 2011 when the DOJ alleged that the company did not follow a law that requires special packaging for drugs to prevent accidental ingestion by children. Instead of notifying the U.S. Consumer Product Safety Commission or the public of the risk its products pose to children, the drugmaker began altering the packaging while continuing distribution of products with untested packaging, Reuters reported, citing documents related to the lawsuit.

Dr. Reddy's said the products in question have not been distributed since June 2012.

As part of the settlement, the company will need to maintain a program to ensure compliance with consumer protection laws.