Fourth plant to be affected in India.By Deepak Chitnis
WASHINGTON, DC: Indian pharmaceutical company Ranbaxy has been slammed with another ban of products coming out of one of its factories by the US Food and Drug Administration (FDA).
The plant is the fourth to have been shut down by the US federal agency, which found that it did not meet regulatory standards for quality assurance. The plant in question, located in the northern Punjab town of Toansa, was inspected by the FDA on January 11.
The other three plants that were closed down were located in the towns of Paonta Sahib, Dewas and Mohali, and had warned the company in 2012 to bring its factories up to compliance standards. For its part, Ranbaxy has said that the FDA’s findings are surprising and will warrant investigation into its own management practices.
The company is owned by a Japanese firm called Daiichi Sankyo, of which it is its sole unit in India. The Japanese firm has a 63% stake in the company in a deal worth, in total, about $4.6 billion.
“This development is clearly unacceptable and an appropriate management action will be taken upon completion of the internal investigation,” said Ranbaxy Chief Executive Arun Sawhney in a statement. The company is also expected to show losses of 35%-40% over the next 3-4 quarters, a significant bite from its total revenue, according to Religare Capital Markets vice-president Arvind Bothra.
The FDA has alleged that Ranbaxy employees at the Toansa plant were repeatedly testing certain materials that turned up bad results until they gave good ones, thus permitting the employees to use the materials even if they weren’t necessarily the best ones. Even worse, sticky notes were found on material packages telling employees to alter the findings of tests to allow the materials to be used.
Now, Ranbaxy goods from the factory will not be permitted for sale in the US unless it meets rigorous standards testing, which may involve the use of a third-party inspector to come in and bring everything up to par.