A federal court in New Jersey, U.S. has imposed a $5 million penalty on Dr. Reddy's Laboratories Ltd. for distributing prescription drugs not in child-resistant packaging.
“Dr. Reddy's failed to ensure that children were protected from potentialy harmful prescription drugs,” the acting assistant attorney general of the U.S. Department of Justice’s Civil Division Chad Readler said, according to a statement posted on DOJ’s website. “The government will continue to take seriously alleged violations of laws meant to protect consumer safety,” he added.
The district court has also entered a permanent injunction to prevent the Hyderabad-based drugmaker from distributing the improperly packaged drugs.
The court was acting on a complaint that Dr. Reddy’s failed to comply with the Poison Prevention Packaging Act and the Consumer Product Safety Act, the U.S. justice department release said. The U.S. Consumer Product Safety Commission also alleged that Dr. Reddy's knowingly violated the CPSA with respect to household oral prescription drugs in blister packs that were not child resistant as required by the law. The complaint added that Dr. Reddy's distributed such drugs despite being previously warned by its own employees that they had not been tested for compliance and could fail the PPPA's child test protocols.
Dr. Reddy's also failed to notify the CPSC immediately that its products were not compliant, according to the charges.
While Dr. Reddy's has agreed to settle the matter, it has not admitted to violation of the law, the release added. However, under the voluntary agreement with the court, Dr. Reddy's will now implement a program to ensure compliance with the two laws.
“The injunction further requires Dr. Reddy’s to maintain internal controls and procedures designed to ensure timely, truthful, complete, and accurate reporting to the CPSC as required by law,” the media release said.
Earlier in the day, shares of Dr. Reddy's in India had closed 1 percent up. In the U.S. shares were trading 1.36 percent higher at 12:30 pm, even after the DOJ's injunction.