Ranbaxy gets third FDA shock with ban on drug exports from Mohali

Sep 17 2013, 03:36 IST
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SummaryThe US Food and Drug Administration (FDA) has banned Daiichi Sankyo-owned Ranbaxy Laboratories’ third plant in Mohali from exporting medicines to the US citing non-adherence to good manufacturing practices, underlining the trend of closer scrutiny of Indian drug makers by American regulators.

The US Food and Drug Administration (FDA) has banned Daiichi Sankyo-owned Ranbaxy Laboratories’ third plant in Mohali from exporting medicines to the US citing non-adherence to good manufacturing practices, underlining the trend of closer scrutiny of Indian drug makers by American regulators. The development comes as a huge setback for Ranbaxy as its two other plants in Paonta Sahib and Dewas are already under a similar ban since 2008. In fact, only a couple of months back, the company in the US pleaded guilty for felony charges related to drug safety and agreed to pay fine of $500 million.

The latest ban saw the company’s shares plunging 30.27% to close at R318.85 on the Bombay Stock Exchange.

Though the Mohali plant does not yet export drugs

to the US, Ranbaxy had plans to export high-yielding products from there.

“Given there are no sales from Mohali, the import alert has no financial impact. However, hopes for approvals for new products from Mohali have been dashed. We understand Ranbaxy had been working with the USFDA on approval for Diovan from Mohali,” HSBC said in a research report.

The FDA action may also delay the launch of other new products by Ranbaxy including a generic version of Roche’s anti-viral Valcyte and AstraZeneca Plc’s blockbuster heartburn and ulcer pill Nexium in the US, analysts said.

Analysts said the move may impact Ranbaxy’s upcoming approval for Diovan, which would have earned the drug maker around $200 million during its six-month exclusivity period. Sources had earlier stated that Ranbaxy has moved its application for Diovan generic to Ohm Laboratories, its wholly-owned unit in the US, after the FDA issued a Form 483 to Mohali (from where the original application was submitted), earlier this year.

“Even if the company moves all prospective approvals to Ohm Labs, they will eventually face a capacity constraint at the New Jersey facility,” said an industry executive who did not wish to be named.

Mohali was expected to manufacture oral solid products for export to the US, EU and other countries. US accounts for more than 40% of Ranbaxy’s sales. During the April-June quarter, it clocked better-than-expected sales of Rs 770 crore in US market.

Ranbaxy, 63.5%-owned by Japan’s Daiichi-Sankyo, said it had not received any communication from the FDA on the import ban against the Mohali factory. “We are seeking information from the USFDA in this regard,” the company said.

With India’s generic drug exports to the

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