Pesky manufacturing violations appear to be all that's standing between Ranbaxy Labs and its U.S. launch this week of a generic version of Lipitor, Pfizer's ($PFE) blockbuster cholesterol drug. The regulatory catch the FDA can invoke--that new drug applications filed by a manufacturer having unresolved GMP violations will remain unapproved until those violations are cleared--is the likely impetus of the drugmaker's willingness to settle with the agency.
A report in India's Economic Times states Ranbaxy, a unit of Daiichi Sankyo, has been in talks with the U.S. Justice Department and the FDA concerning a comprehensive deal encompassing a financial penalty, manufacturing remediation and the generic Lipitor approval. An unnamed source in the report described the penalty as $350 million to $400 million.
This story has legs. Ranbaxy's current entanglement with the FDA dates back to at least 2008, when the agency slapped the drugmaker with an import ban on products made at two Indian facilities. Manufacturing defects and alleged falsified data led to an FDA warning letter and culminated in the ban. Daiichi became involved after it acquired Ranbaxy and reported pending settlements never came to fruition.
Given FDA approval of the generic, Ranbaxy is expected to manufacture the drug at its New Jersey plant using API made at its facility in Punjab, India.
Pfizer's Lipitor patent expires this Nov. 30. Ranbaxy and Pfizer generics partner Watson Pharmaceuticals ($WPI) are expected to be the first to market the drug in the U.S., the report said.