Tuesday, September 17, 2013
DJ: U.S. Blocks Drug Imports From Ranbaxy Plant in India
MUMBAI--The U.S. Food and Drug Administration said it is blocking imports of medicine made at the newest plant of India's Ranbaxy Laboratories Ltd., again casting doubt on the quality of pharmaceutical products from the South Asian country, the U.S.'s largest supplier of generic drugs.
The FDA issued an import alert Friday for drugs made in Ranbaxy's Mohali plant in northern India. On Monday, the agency said it found "significant" violations of manufacturing rules, "including failure to adequately investigate manufacturing problems" during two plant inspections conducted in September and December 2012.
The agency said Ranbaxy won't be allowed to make drugs for the U.S. at the Mohali site until the company comes into compliance with FDA manufacturing rules. Ranbaxy will be required to hire a third-party expert to inspect the Mohali facility and certify to the FDA that any violations have been addressed and that the company has processes in place to ensure continuing compliance. Analysts said the plant was expected to make a generic version of blood-pressure treatment Diovan, which they added could be a big seller for Ranbaxy.
A spokesman for Ranbaxy said it is requesting information from the FDA. "We have so far not received any communication from the U.S. FDA on this subject," the spokesman said in an email response to queries. "We are seeking information from the U.S. FDA in this regard."
The FDA issued similar alerts against two other Ranbaxy facilities in 2008, saying the company's manufacturing processes didn't comply with the agency's requirements. The FDA has yet to lift the alerts on the two facilities.
Ranbaxy is one of the largest Indian drug makers by sales. It was taken over by Daiichi Sankyo Co. (6640) of Japan from its founders, the Singh family, in 2008, just months before the first alerts were issued.
The latest action doesn't affect Ranbaxy's U.S. sales of a generic version of the popular cholesterol-lowering drug Lipitor. Ranbaxy makes those pills at a plant in New Jersey, a company spokeswoman said. Other drug makers also sell generic Lipitor, also known as atorvastatin.
Apotex Inc. leads the U.S. market for the drug with a 31% share, followed by Mylan Inc. with a 23% share and Dr. Reddy's Laboratories Ltd. with 19%, according to Sanford C. Bernstein analyst Ronny Gal. Ranbaxy, which was among the biggest sellers until a company recall in 2012, now has just 1% of the market.
Last November, Ranbaxy pulled about 480,000 Lipitor bottles for U.S. sale after routine quality checks turned up tiny glass fragments. The company stopped making the drug at its Mohali plant and shifted production to the U.S., the spokeswoman for Ranbaxy said. In late March, Ranbaxy resumed sales in the U.S.
Now at least three of Ranbaxy's eight plants in India are unable to export to the U.S. Among its facilities outside of India, its Gloversville, N.Y., plant received a warning letter from the FDA in December 2009 for manufacturing violations. That facility has since been closed.
Analysts said Ranbaxy had planned to use the Mohali plant to ramp up the production and exports of new generic drugs, which investors had hoped would help bolster the company's revenue.
Ranbaxy earned close to half of its more than $2 billion in revenue for the year ended March 31, 2012, from the U.S., according to the company's most recent annual report.
Shares in Ranbaxy plummeted as much as 35% amid the FDA news on Monday. The stock closed down 30% at 318.85 rupees ($5.04) in Mumbai.
"Mohali, being a new plant, manufacturing wasn't at full scale there, but most of the new drugs by the company were slated to be manufactured there," Sarabjit Kour Nangra, vice president of research at Mumbai-based brokerage Angel Broking Pvt. Ltd., said in a note to clients.
It could take more than six months before restrictions can be removed, said D.G. Shah, secretary-general of the Indian Pharmaceutical Alliance, a trade body.
Ranbaxy's continued failure to meet FDA manufacturing standards was troubling, he said.
"You don't expect a company, which has gone through all this and hired so many consultants to help them improve their processes, to still have these problems," he said.
Ranbaxy was one of the first companies to begin selling generic Lipitor in the U.S. in 2011, after Pfizer Inc. lost market exclusivity for the drug's branded version. Pfizer's Lipitor was once the world's best-selling drug, but its sales have plummeted as it has lost market share to generic alternatives.
The import alert could endanger Ranbaxy's sale of generic versions of Diovan, the blood-pressure medication, and Valcyte, a drug designed to fight infections in AIDS patients. Valcyte also was set to be manufactured in the Mohali facility, according to Edelweiss Research, a Mumbai-based financial-services company. Ranbaxy was expected to file generic-drug applications for Diovan and Valcyte early next year.