Making drugs requires ingredients--and that is what Ranbaxy Laboratories has been struggling with since the FDA banned its key active pharmaceutical ingredient (API) plant in January. The ban left the Indian generics maker scrambling to buy APIs from outside suppliers in hopes of still tapping some lucrative drug launches in the U.S.
A source tells Reuters that Ranbaxy is negotiating with two suppliers of the API required to make a generic of Nexium, the AstraZeneca ($AZN) heartburn blockbuster that goes off patent in May. The source declined to identify the potential suppliers. AstraZeneca recently named one company making the Nexium API when it was questioned on the safety of its Nexium. It turns out that until the ban on the Ranbaxy plant, AstraZeneca had been getting some of its Nexium API from the Indian drugmaker.
AstraZeneca spokeswoman Vanessa Rhodes told Bloomberg that the company had been getting some of the API from Ranbaxy and some from Minakem in France before Ranbaxy's ban. Now it is sourcing it from Minakem exclusively. She also said there were no concerns about drugs still on the market made with ingredients from the banned plant, pointing out to Bloomberg that the FDA did not recall any Ranbaxy products and saying that AstraZeneca tested them for safety. "As we would in response to any regulatory action of this sort, we have carried out rigorous quality-control checks to ensure U.S. Nexium meets our quality standards," she said.
Of course, manufacturing a drug takes a production facility as well as ingredients--and Ranbaxy's options there have also been limited. Manufacturing and quality issues led the FDA in September to ban the plant in India where it was expected to manufacture its generic of Nexium. Ranbaxy's two other FDA-approved plants in India have been banned for 5 years for similar issues. That leaves only its Ohm Laboratories facility in New Jersey able to sell product into the U.S.
Sources in January told India's Business Standard that Ranbaxy had petitioned the FDA to allow it to manufacture its generic of Novartis' ($NVS) blockbuster hypertension fighter Diovan there. That is another product for which it has a 180-day exclusive and the FDA has yet to allow other generic drugmakers into the market, although the drug went off patent in September 2012. Ranbaxy would need FDA approval to manufacture its Nexium generic at the Ohm facility, unless it contracted with someone else to manufacture the product for it.
Ranbaxy has struggled with FDA problems for years now, even paying $500 million last year to settle a case with U.S. authorities. According to a Form 483 of the FDA inspection of the Toansa API plant, the drugmaker retested APIs repeatedly until getting results that would allow them to pass required analytics, and then deleted failed tests out of its computer system. Inspectors also reported broken equipment and windows and swarms of flies in the analytics lab.