Arizona and 37 other states have reached a $40.75 million settlement with GlaxoSmithKline and SB Pharmco Puerto Rico Inc. related to the sale of drugs that were allegedly adulterated because of substandard manufacturing processes.

In a complaint filed today along with the settlement agreement, Arizona Attorney General Tom Horne alleged that GlaxoSmithKline and SB Pharmco engaged in unfair and deceptive practices when they manufactured and distributed certain lots of drugs that were improperly manufactured. The drugs involved were Kytril, an anti-nausea drug prescribed to cancer patients; Bactroban (an antibiotic ointment), Paxil CR (the controlled release formulation of the antidepressant drug Paxil), and Avandamet (a combination Type II diabetes drug).

Arizona’s share in the settlement — $1,363,884 — will go into a state fund that pays for consumer-fraud investigations, a spokesman for Horne said.

GSK and SB Pharmco are no longer manufacturing drugs at their Cidra, Puerto Rico, facility, which has been closed since 2009.  As part of the settlement, GlaxoSmithkline and SB Pharmco are enjoined from making false, misleading or deceptive claims regarding the manufacturing of all drugs formerly manufactured at the Cidra facility regardless of where these drugs are now produced.

The state complaints come after GlaxoSmithKline agreed last year to pay $750 million in civil and criminal penalties to settle federal claims related to faulty manufacturing processes at its Cidra plant. Part of that money went to states to cover false claims submitted to Medicaid and other health care programs.

The federal investigation began after a company quality assurance manager reported to the Food and Drug Administration that she had found numerous violations at the Puerto Rico plant, such as a contaminated water system and an air system that allowed for cross-contamination between different products manufactured there.