FDA orders Ranbaxy to reassess operations

Ranbaxy Laboratories has received yet another missive from a displeased FDA. Dated December 21--but not posted at the FDA website until now--the letter chastises Ranbaxy for lackluster efforts to come up to manufacturing standard--and this in spite of previous warnings from the agency. Focusing on Ranbaxy's Gloversville, NY, plant operated by U.S. unit Ohm Laboratories, the letter also asks Ranbaxy to reassess all its global operations that supply drugs to the U.S.

To no one's surprise, shareholders weren't pleased by this development. The stock dropped as investors worried afresh about the company's regulatory troubles, which have been ongoing for more than a year now.

This particular warning letter was announced by Ranbaxy back on Christmas Eve. But because the actual letter wasn't made public, no one was aware of just how sharp the FDA's language had been until Indian media got a hold of it. "FDA expects Ranbaxy to immediately undertake a comprehensive assessment of its global manufacturing operations to ensure that all sites manufacturing drug for the U.S. market conform to US requirements," the letter states. That's no small request.

Ranbaxy is trying to look on the bright side; it emphasized that the FDA inspected two other Ohm plants in 2009, finding no "material deviation." Those two plants make most of Ohm's products supplied to the U.S., the company said. But on top of other difficulties at Ranbaxy plants in India, the latest warning points to a disturbing trend.

- here's the warning letter
- read the Economic Times story
- get more from the Wall Street Journal

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