FDA uncovers big foul-ups at Ranbaxy plant

When Ranbaxy Laboratories started shipping generic Lipitor in April from its Mohali plant, it was supposed to mark a turnaround for the company, which has been trying to dig out from under a mountain of regulatory problems. But new reports show inspectors found rampant problems there last year, explaining why the agency this week announced an import alert against the plant.

According to documents cited by The Hindu, FDA inspectors found toilets without running water and discovered a drug tablet that appeared to have a human hair sticking from it. Others had oil spots on them. And plant managers were not getting to the root cause of the problems. The Mohali plant now joins two other Ranbaxy plants in India to be banned from exporting drugs to the U.S. It leaves India's largest generic drugmaker with only a plant in New Jersey approved to serve the U.S., a market that had accounted for 40% of its sales.

Quality and manufacturing problems at the two other Ranbaxy plants had been well-documented for years. The company in May agreed to a $500 million payment and pleaded guilty to three felony charges to settle regulatory matters tied to its facilities in Paonta Sahib and Dewas. But analysts thought Mohali was different. Problems there began to publicly surface last year when ground glass got into the API for generic Lipitor and Ranbaxy had to stop production and recall 41 lots of the drug. That devastated a big sales surge that had been powering Ranbaxy revenues in the U.S.

Follow-up inspections last year uncovered a long list of other quality and sanitation issues. During a visit in August 2012, inspectors concluded a black fiber embedded in a tablet was likely "tape remnants on the nozzle head of the machine or a hair from an employee's arm that could be exposed on loading the machine," The Hindu reports, citing what appears to be a Form 483 that it received. It said Ranbaxy did not analyze the fiber to figure out the source and find a fix. It also failed to do chemical analysis on tablets with black spots from what was later determined to be oil to make sure there was not some other contamination of the drug. The newspaper reports that investigators found toilets and hand-washing facilities without running water and no signs or procedures to remind employees to "wash hands with soap and water after toilet use and prior to gowning."

Ranbaxy on Tuesday said it would review the FDA findings and take the necessary steps to resolve the concerns as quickly as possible. The news of the ban shaved off about 30% of Ranbaxy's market cap, a financial hit that reverberated out to its majority owner Daiichi Sankyo. Shares in the Japanese company fell 6.8% on the news Tuesday. According to Bloomberg, it was the biggest one-day drop in stock price in more than two years for the Japanese drugmaker, which paid $4.6 billion for control of Ranbaxy in 2008, days before problems surfaced.

- here's the Hindu story
- see more from Bloomberg

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