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FDA raises more concerns about Ranbaxy’s India plants

13 January, 2014

The US Food and Drug Administration (FDA) has raised concerns about the manufacturing practices at a factory owned by Ranbaxy Laboratories Ltd (RANB.NS), the drugmaker said on Monday, sending its shares down to nearly a one-month low.

All of Ranbaxy’s India-based factories are currently banned by the FDA from exporting medicines to the United States, the company’s largest market, after the regulator’s inspection found violation of its so-called good manufacturing practices.

The company, India’s biggest drugmaker by sales, said the FDA had now filed “certain observations” about its Toansa pharmaceutical ingredients plant in Punjab.

Failure to address these concerns would result in the FDA banning all exports to the United States from the factory.

“The company is assessing the observations, and will respond to the FDA in accordance with the agency’s procedure to resolve the concerns at the earliest,” Ranbaxy said in a statement. It did not give further details.

Shares in Ranbaxy, 63.5 per cent owned by Japan’s Daiichi Sankyo Co (4568.T), fell as much as 9.1 per cent on Monday to Rs 421.10, its lowest level in nearly a month, while the main Mumbai market index .NSEI was up 1.1 per cent.

Indian drugmakers are among the world’s biggest producers of cheap generic medicines, as developed nations battle rising healthcare costs and big-selling drugs going off-patent in the lucrative US market.

The rise in demand for generic drugs has led to closer regulatory scrutiny and sanctions imposed on top drugmakers including Ranbaxy and Wockhardt Ltd.

Last September, the FDA imposed an import ban on Ranbaxy’s factory in Mohali, saying it had not met “good manufacturing practices”.

The ban on its Mohali factory came after the company pleaded guilty in May to US felony charges related to drug safety and agreed to a record $500 million in fines.


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FDA raises more concerns about Ranbaxy’s India plants

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