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Saturday , January 25 , 2014
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Ranbaxy US travails mount

Mumbai, Jan. 24: In yet another jolt to Ranbaxy Laboratories, the US Food and Drug Administration (USFDA) has barred the company from supplying active pharmaceutical ingredients (APIs) made from its Toansa facility in Punjab.

This is the fourth Ranbaxy unit from India that has been barred by the drug regulator from supplying products to the US. The other three include its Paonta Sahib, Dewas and Mohali facilities.

The USFDA had inspected the unit on January 11. The regulator said it took the step after the inspection of the Toansa facility revealed that it had violated current good manufacturing practices (CGMP).

The investigations revealed that the Toansa staff had re-tested raw materials, intermediate drug products and finished API after those items failed analytical testing and specifications. According to the USFDA, while this was done to produce acceptable findings, these failures were subsequently not reported or investigated.

The Toansa facility is now subject to certain terms of a consent decree of permanent injunction entered against Ranbaxy in January last year.

The decree contains provisions to ensure compliance with CGMP requirements at the Paonta Sahib and Dewas facilities. In September last year, the USFDA added the Mohali facility to the CGMP provisions of the decree. Under the decree, Ranbaxy is prohibited from distributing in the US drugs manufactured using API from Toansa or manufacturing API at the Toansa facility for FDA-regulated drug products.

“We are taking swift action to prevent substandard quality products from reaching US consumers,” said Carol Bennett, acting director of the Office of Compliance in the FDA’s Center for Drug Evaluation and Research.

Reacting to the ban, Ranbaxy said it was disappointed with the FDA action. “This development is clearly unacceptable and an appropriate management action will be taken upon completion of the internal investigation,” said Arun Sawhney, CEO and managing director of Ranbaxy.

Pharmaceutical analysts averred that the development was a major setback for Ranbaxy as it could not make APIs for the Ohm facility (in New Jersey), which was allowed to make generic drugs for the US. It is estimated that the Toansa unit accounts for over 60 per cent of its API requirements. The ban means that Ranbaxy will have to outsource APIs from another manufacturer which could take time, thereby leading to delays.

The US contributes to around 40 per cent of Ranbaxy’s revenues and experts feel that the fresh ban could impact Ranbaxy’s future launches. The Daiichi Sankyo subsidiary was set to launch the generic version of Diovan, the hypertension drug of Novartis AG.

“While we await more clarity from the management on the exact impact on the financials, especially the operating profit margins, the company could trade at a huge discount to its peers,” said Sarabjit Kour Nangra (vice-president-Research, Pharma) at Angel Broking.

Worried over its impact, the Ranbaxy share came under heavy selling pressure at the stock exchanges. On the BSE, the scrip ended with a loss of 19.54 per cent, or Rs 81.50, to close at Rs 335.65.