Dr. Reddy’s to pay out $5M to settle federal lawsuit over child safety packaging

Indian drugmaker Dr. Reddy’s agreed to pay $5 million to settle claims it distributed prescription drugs in the U.S. with packaging that wasn’t tested for child safety.

In its suit against Dr. Reddy’s, the U.S. Justice Department alleged that in 2011 the company’s engineers knew that packaging for four drugs it manufactured wouldn’t meet requirements it be child resistant. The company then began to discreetly alter the packaging and sell the products with untested packaging, the suit claimed.

The settlement was contained in court documents filed in federal court in New Jersey and comes a little more than a year after the U.S. Consumer Product Safety Commission referred the case to the Justice Department, Reuters reported.

In a statement reported by the news service, Dr. Reddy’s said that while it disagreed with the allegations it agreed to the settlement to avoid prolonged litigation.

“Dr. Reddy’s is not aware of any reports that any child gained access to these products as a result of the packaging or that any of the products caused children harm as a result of the packaging,” the company said, adding that products with the packaging at issue have not been distributed since June 2012.

As part of the settlement, Dr. Reddy’s agreed to develop and maintain a program to ensure it remains compliant with consumer protection laws and ensure information is reported to the CPSC.

In late November, Dr. Reddy’s was named in a securities class-action lawsuit in the U.S. for alleged violation of federal securities laws. Earlier this year, Korea’s Mezzion filed a lawsuit against Dr. Reddy’s in New Jersey state court alleging the company repeatedly represented to Mezzion that it was compliant with FDA regulations while it was not.