Ranbaxy Laboratories faces yet another crisis with the US Food and Drug Administration prohibiting it from producing and distributing drugs for the American market from its Toansa facility in Punjab.
This effectively bans all Ranbaxy Laboratories facilities from manufacturing products for the American market, except US-based Ohm Labs.
Ranbaxy is now a subsidiary of Japanese drugmaker Daiichi Sankyo. The Toansa facility has also been brought under the consent decree that Ranbaxy signed with the US regulator in January 2012, whereby it commits to taking corrective measures.
“This development is clearly unacceptable and an appropriate management action will be taken upon completion of the internal investigation,” said Arun Sawhney, Chief Executive Officer and Managing Director of Ranbaxy, while apologising to stakeholders.
However, the company did not clarify the nature of the possible management actions.
The news sent Ranbaxy’s share price tumbling by about 20 per cent.
The stock, which opened at ₹375.45 on the Bombay Stock Exchange on Friday, plunged to a low of ₹334.10 and closed at ₹335.65 .
The US FDA had recently issued a warning to the facility, which produces about 70 per cent of Ranbaxy’s active pharmaceutical ingredients (APIs).
The import alert now bans all APIs made in this plant from the US market. An industry expert said Ranbaxy’s US sales could be hit by as much as 40 per cent over the next three-four quarters since the Toansa plant was the only facility producing these ingredients for that market.
Fourth plant sanctioned This is Ranbaxy’s fourth Indian plant to receive an import alert from the US FDA, with the others being Paonta Sahib in Himachal Pradesh, Dewas in Madhya Pradesh and Mohali in Punjab.
“We are taking swift action to prevent sub-standard quality products from reaching United States consumers,” said Carol Bennett, Acting Director of the Office of Compliance at the FDA’s Center for Drug Evaluation and Research.
According to the US FDA, the Toansa facility inspection (concluded on January 11) found several violations in the basic raw materials as well as in the finished active pharmaceutical ingredients.
The US Food and Drug Administration is also evaluating any potential drug shortage issues that may arise in that country following this action.