India's largest drug maker Ranbaxy Laboratories [Get Quote] has agreed to pay damages to the Government of Scotland in an out-of-court settlement for alleged price manipulation, along with other drug companies.

Ranbaxy agreed to pay damages of �1,057,500 or about Rs 7.5 crore (Rs 75 million) to the Scottish government as part of the deal, according to a statement hoisted on the Scottish government's web site.

In February 2005, the Scotland Government approached courts in England against Ranbaxy and companies such as Clonmell Healthcare, Generics UK, Goldshield and Norton for allegedly forming cartels to supply generic warfarin, ranitidine and penicillin-based drugs. The other four companies had earlier settled the issue, paying close to � 5.9 million as compensation.

"Ranbaxy (UK) have agreed, on a full and final basis and without admission of liability, to pay �1,057,500 in compensation for settlement of civil claims relating to the supply of Cillins and Ranitidine and to provide co-operation in connection with the continuing civil claims against a number of other companies regarding the alleged price fixing arrangements for a number of generic drugs," the Government of Scotland said in a statement.

A Ranbaxy spokesperson declined to comment on the development.

"The settlement with Ranbaxy is very welcome. I am particularly pleased that they have agreed to provide co-operation in respect of our continuing civil claims," said Cabinet Secretary for Health and Wellbeing, Nicola Sturgeon.

A few months ago, Ranbaxy was absolved by a UK court in similar cases in England. Five companies, including Ranbaxy were accused by the Department of Health in England for alleged price cartels in supply of antibiotics in 1996-2000 period.

The companies also paid compensation close to � 35 million and decided to cooperate with parallel ongoing investigations by the Serious Fraud Office of the UK Government.

An English Crown Court quashed the suit against Ranbaxy UK and declined an application by SFO for permission to appeal to the English Court of Appeal, even SFO has the right to appeal to the court directly.

The Welsh Government is also enquiring into alleged price-fixing for drugs in that country by a group of generic companies, including suppliers such as Ranbaxy.