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news.Ranbaxy Laboratories has agreed to pay $39.75m to resolve allegations concerning its participation in the Texas Medicaid Program.
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Under the settlement agreement, the company will pay the amount in a series of tranches through August 2015.
The litigation is related to how the company has historically reported pricing data to Texas Medicaid for certain drugs, which is believed to violate the Medicaid Fraud Prevention Act.
The Texas state attorney general had filed a lawsuit alleging the company reported false or inflated prices and failed to disclose or concealed discounts to the state Medicaid program, according to Reuters.
According to reports, the State of Texas has brought nearly identical claims against virtually every other major pharmaceutical manufacturer in the US.
The company believes that it fully complied with all relevant laws, but had reached a settlement to avoid the distraction of litigation.
In April, Sun Pharma entered into a definitive agreement to acquire Ranbaxy Laboratories in an all-stock transaction totalling equity value of $3.2bn.
Currently, Ranbaxy is in the middle of this merger process, which is subject to customary closing conditions and expected to be completed by the end of fiscal 2014.