Pharmco Puerto Rico, a subsidiary of GlaxoSmithKline (GSK), admitted it was guilty of the charges relating to the manufacture and distribution of certain adulterated drugs made at a now-closed Puerto Rico facility, the department said.
The resolution includes a criminal fine of $150 million and a civil settlement of $600 million to the federal government and states, it said in a statement.
Four drugs manufactured by Pharmco were deemed adulterated after they did not conform to US safety requirements and did not have the "quality and purity characteristics which it purported or was represented to possess."
The drugs, manufactured at the plant between 2001 and 2005, are Kytril, Bactroban, Paxil CR and Avandamet.
The guilty plea and sentence is not final until accepted by the US District Court in Boston, Massachusetts, the department said.