Indian drug major Dr Reddy’s laboratories is under the scanner of the US Department of Justice following a complaint related to the violation of child resistant packaging regulations.
The complaint was filed under the federal false claims act.
The company is also going through an engagement with the consumer product safety commission (CPSC) over the same issue. This engagement took place in May 2012 when Dr. Reddy's Labs was requested by CPSC to provide certain information about the compliance requirements of a few child-resistant blister packs for about six products sold in the US between 2002 and 2011.
Following this, the CPSC in a letter dated 30 April alleged that the company had violated the consumer product safety act (CPSA) and the poison prevention packaging act (PPPA), and must pay civil penalties.
Dr Reddy's, however, has denied all the allegations in a filing with the US Securities and Exchange Commission (SEC).
The filing said: "The company disagrees with the CPSC's allegations and is engaged in discussions with the CPSC regarding its compliance with the regulations. Simultaneously, the Department of Justice (the DOJ) is also currently investigating a complaint related to these issues under the Federal False Claims Act."
In its filing, Dr. Reddy's further stated that an unfavorable outcome could lead to significant liabilities, affecting it adversely. However it also maintained that the current stage of proceedings makes the outcome highly speculative.
