Ranbaxy Laboratories calls its plant in Mohali, India, an ultra-modern facility, but FDA inspectors found rampant problems during visits last year. They 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 fallout from those findings has added a new load to the mountain of problems the Indian drugmaker has been trying to dig out from under. It also dropped a heap of issues on Japanese drugmaker Daiichi Sankyo, which bought a majority share in Ranbaxy in 2008 only days before its problems with the FDA first surfaced. The FDA announced Monday it has banned products made at the Mohali plant from the U.S. market, the third Ranbaxy facility to be issued an import alert.
The news of the ban shaved off about 30% of Ranbaxy's market cap, a financial hit that reverberated out to 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 has bought a boatload of trouble with Ranbaxy. In May, Daiichi executives accused unnamed Ranbaxy shareholders of having hidden the company's problems before the sale. It declined to give specifics but said it was "pursuing its available legal remedies." The declaration was made after the Indian drugmaker agreed to a $500 million payment and pleaded to three felony charges to settle regulatory matters with U.S. authorities.
Quality and manufacturing problems at the two other Ranbaxy plants had been well-documented for years, but the FDA in late 2011 approved the Mohali plant to manufacture generic Lipitor for the U.S. market. That launch was to mark a turnaround for the company. But the drugmaker ran into problems fairly quickly when glass got into the API of the drug and Ranbaxy had to stop production and recall 41 lots. 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 cause 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. With the latest import alert, all three plants in India that had manufactured products for the U.S. are now banned from the market. That leaves it with just a facility in New Jersey to serve a market which had provided about 40% of its revenues.