USFDA pulls up Ranbaxy, Strides Arcolab for norm violation

Written by Press Trust of India | New Delhi | Updated: Sep 17 2013, 03:55am hrs
The US health regulator has pulled up Ranbaxy Laboratories and Strides Arcolab over violation of manufacturing norms, posing challenges to their exports to the world's largest pharmaceuticals market.

While Ranbaxy's Mohali plant in Punjab has been slapped with an import alert barring drugs produced there from being imported into the US, a sterile manufacturing facility at Strides Arcolab's subsidiary Agila Specialties has been issued a warning letter.

This is the third Ranbaxy plant, after units at Dewas (Madhya Pradesh) and Paonta Sahib (Himachal Pradesh), that has received the US import alert. For Strides Arcolab, the warning letter could have implications for the Rs 5,168 crore takeover of Agila Specialties by US-based Mylan Inc.

Ranbaxy shares plunged today, making investors poorer by Rs 5,855 crore. The stock ended at Rs 318.85 on the BSE, down 30.27 per cent.

According to information on the US Food and Drug Administration website, the import alert on Ranbaxy's Mohali plant dated September 13 covers all 'drugs and drug products' produced by the company at the facility.

While the FDA did not specify details, it said "detention without physical examination may be appropriate when an FDA inspection has revealed that a firm is not operating in conformity with current good manufacturing practices."

"We have so far not received any communication from the USFDA on this subject. We are seeking information from the USFDA in this regard," a Ranbaxy spokesperson said.

The Mohali plant produces oral solids in dosage form, according to the company's website. The US is Ranbaxy's largest market, with sales of Rs 770 crore in the quarter ended June 30.

In May, Ranbaxy pleaded guilty to "felony charges" related to the manufacture and distribution of certain 'adulterated' drugs made at two units in India and agreed to pay USD 500 million to US authorities as a penalty.

This followed a series of actions by the US authorities and the FDA, which in 2008 banned the import of 30 generic drugs produced by Ranbaxy at its Dewas and Paonta Sahib plants for violation of manufacturing norms.

Strides Arcolab said the FDA issued a warning letter against sterile manufacturing facility 2 of Agila Specialties at Bangalore.

While the company said it was "committed to work collaboratively and expeditiously with the US FDA to resolve concerns cited in the warning letter in the shortest possible time," market observers raised concerns over its impact on the sale of Agila to Mylan.

Comments from Mylan could not be obtained as an e-mailed query remained unanswered. According to Strides Arcolab, the USFDA had inspected the facility in June, resulting in the issuance of 'Form FDA 483' with observations. Strides responded by implementing corrective actions.

Meanwhile, the company said the USFDA has cleared Agila's oncology facility at Bangalore, which was inspected recently.

"This facility has cleared the inspection with "Zero 483 status," Strides said.

Earlier this month, the government approved Mylan's Rs 5,168 crore deal to fully acquire Agila Specialties from Strides. The companies had announced the deal in February.

The Bangalore-based firm has eight USFDA approved sterile manufacturing facilities. Strides Arcolab shares closed at Rs 869.10 on the BSE, down 3.45 per cent.