The US subsidiary of Glenmark Pharmaceuticals Ltd (GPL), Glenmark Generics Inc., USA, has entered into a settlement with the State of Texas, US, under which it would pay $25 million spread over a period of 16 quarters (four years) to the state.
The subsidiary would make a payment of $1.56 million dollar in each quarter for 16 quarters which it said “will not materially impact the organisation's cash flow”.
In a filing with the stock exchanges, GPL said its US subsidiary had concluded the “pricing investigation” by the Texas Attorney General, USA.
According to the terms of the settlement reached, GPL said “there is no admission of liability”. Robert Matsuk, President, North America and Global API Business, Glenmark, said “the settlement amount will not materially impact the organisation's cash flow”. He expressed the company’s commitment to “continuing our mission of providing” customers with the “finest generic pharmaceutical products in the US and complying with all applicable state and federal pricing requirements”.
Under the settlement reached, Glenmark must pay the State of Texas a total of $11.25 million towards its general revenue fund. As the Medicaid programme was jointly funded by the State and US taxpayers, the federal government was entitled to a percentage of the settlement proceeds and, hence, it would also get $11.25 million. Moreover, the Texas Attorney General's Office would receive $2.5 million in attorneys' fees and costs, the statement added.
Shares of GPL are trading at Rs 876, a gain of Rs 31.60. The stock had initially touched a high of Rs 901.20 on the BSE before ceding some of its gains.