KNOXVILLE, Tenn. (AP) - Two orthopedic clinics serving patients in Tennessee and Virginia have agreed to pay a combined settlement of $1.85 million to resolve claims that they purchased medications overseas at cut-rate prices and then billed the government at much higher rates.

Bill Killian, U.S. attorney for the eastern district of Tennessee, announced the agreement on Friday. Under the settlement, Tennessee Orthopaedic Clinics, which is headquartered in Knoxville, will pay $1.3 million and Kingsport, Tenn.-based Appalachian Orthopaedic Clinics will pay $550,000.

The government said the drugs, used to treat osteoarthritis, were sometimes labeled in foreign languages and there was no guarantee that they had not been tampered with or that they were stored properly.

Tennessee Orthopaedic Clinics released a statement saying that it admitted no wrongdoing in the settlement. The statement says the drugs were manufactured in the U.S., exported by a foreign distributor and later brought back by another distributor.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.