Fourth Ranbaxy Generics Plant Hit by FDA Ban

27.01.2014 -

Indian drugmaker Ranbaxy Laboratories faces long delays and high costs in launching big-selling generic drugs in the U.S. after products from a fourth plant were banned due to manufacturing violations.

The Food and Drug Administration's sanction is the latest in a series of regulatory rebukes for India's largest drugmaker by revenue since Japan's Daiichi Sankyo took control of the company in 2008, and it deals a further blow to the $12 billion Indian drug industry.

The FDA said Ranbaxy is prohibited from making and selling pharmaceutical ingredients from its facility in Toansa in the northern state of Punjab, "to prevent substandard quality products from reaching U.S. consumers." The ban on Ranbaxy's Toansa plant followed an inspection completed on Jan. 11.

The U.S. regulator had previously barred products from the company's facilities in Paonta Sahib, Dewas and Mohali in India as part of a 2012 consent decree designed to ensure compliance with good manufacturing practices.

Indian drugmakers are among the world's biggest producers of cheap generic medicines. Demand for their products is on the rise in the U.S., where rising health-care costs and more big-selling branded drugs going off-patent are causing shortages.

This has led to closer regulatory scrutiny and sanctions imposed on top players including Ranbaxy and Wockhardt, which has been hit by import bans from both the FDA in the United States and Britain's drug regulator.

The latest ban will cut supply to Ranbaxy's Ohm Laboratories plant in New Jersey, analysts said. Ohm is the only one of the company's facilities that makes generics for the U.S. market following the ban on products from the three FDA-approved plants in India. Ohm draws nearly three-quarters of its ingredients from the Toansa plant, according to some brokerage estimates.

Ranbaxy had been planning to launch a number of generic drugs in the U.S.,  including a version of  Novartis's hypertension drug Diovan, with ingredients from Toansa, a source told the news agency Reuters.

The Indian firm may now have to outsource the ingredients for making generic drugs, resulting in higher costs and delays and hurting its profit margins, analysts said. The FDA action, following an inspection that identified "significant" violations of sound manufacturing practices, could also delay the launch of a generic version of AstraZeneca's blockbuster heartburn and ulcer pill Nexium in the U.S. market.

At the Toansa facility, the FDA said it found that Ranbaxy re-tested raw materials and other ingredients after the items failed analytical testing, "in order to produce acceptable findings;" however, the company did not report or investigate the failures.