Third FDA ban on Ranbaxy threatens its US sales

Sep 17 2013, 10:07 IST
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A spokesman at the FDA's Washington headquarters said the agency has been in touch with the company. (AP) A spokesman at the FDA's Washington headquarters said the agency has been in touch with the company. (AP)
Summary'None of the products manufactured at the Ranbaxy Mohali facility are in short supply.'

A third Ranbaxy Laboratories Ltd plant in India has been hit by a US import ban over quality concerns, dealing a blow to the company's turnaround plans and threatening to hurt new launches and sales of medicines to its largest market.

With the latest FDA action, all three Ranbaxy plants in India that are dedicated to the US market, which accounts for more than 40 per cent of its sales, have now been barred from shipping to the United States, a company source told Reuters.

The ruling triggered the worst single-day fall in Ranbaxy's stock, wiping off a third of its market value or $1 billion on Monday, and brokerage downgrades on worries of prolonged delays to high-yielding product launches in the United States.

The US Food and Drug Administration imposed an import alert on the Mohali factory in northern India on Friday, saying the plant owned by India's biggest drugmaker by sales had not met "good manufacturing practices".

The FDA said it has evaluated the drug products that are manufactured at the Mohali facility and determined that it is unlikely the action will cause drug shortages in the US

"None of the products manufactured at the Ranbaxy Mohali facility are in short supply," Erica Jefferson, a spokeswoman for the agency, said.

Two of Ranbaxy's other plants, at Dewas and Paonta Sahib, were hit with the same import alerts in 2008, and are still barred from making shipments to the United States. The company has a total of eight plant locations across India.

The FDA said it inspected Ranbaxy's Mohali facility in September and December 2012 and identified "significant" quality control violations, including a failure to adequately investigate manufacturing problems and failure to establish adequate procedures to ensure manufacturing quality.

Under the decree, Ranbaxy is prohibited from making FDA-regulated drugs at the Mohali facility and introducing them into the United States until its methods, facilities and controls are in compliance with good manufacturing standards.

The company is required to hire a third-party expert to inspect the facility and certify to the FDA that the company is once again in compliance.

Ranbaxy will now have to rely on its wholly owned unit in the United States, Ohm Laboratories Inc, to supply medicine to the world's largest economy, said the source, who declined to be named due to the sensitivity of the issue.

Ranbaxy, in which Japan's Daiichi Sankyo Co owns a 63.5 per cent stake, said it had not received any

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