Caraco Pharmaceutical Laboratories will close a once-troubled plant in Detroit and lay off more than 175 employees. The move comes as Caraco's owner, India's Sun Pharmaceutical, is working on its takeover of Ranbaxy Laboratories, which has a large presence in the U.S. market.
Sun announced the closure today in a statement but didn't specify how many workers were going to be let go. That number is 178, according to the Detroit Free Press. Sun said in the statement that employees will get more than what their severance would entitle them to. The company also said it would transfer production to other facilities. Caraco also has facilities in New Jersey and Ohio.
The 178 individuals still working at the plant are far fewer than the 450 that were employed there before the plant ran afoul of the FDA in 2009. The FDA had cited the Detroit plant and one in nearby Wixom in 2008 with a warning letter that laid out a list of significant manufacturing infractions. A year later, concerned that improvements were not getting made, the agency issued a consent decree and sent U.S. Marshals into the facility to seize $20 million worth of unsold drugs. Sun shut the plants and undertook upgrades and in 2012, the plants returned to action.
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| Sun Pharma Managing Director Dilip Shanghvi |
Sun is in the midst of preparing a whole new future for its U.S. presence. Last month it offered $3.2 billion in stock to take over long-troubled Indian compatriot Ranbaxy Laboratories. Ranbaxy has a big presence in the U.S. and 5-FDA approved plants. Its four FDA-approved plants in India, however, are currently unable to sell here because the FDA cited them for serious manufacturing and testing infractions. Only Ranbaxy's Ohm Laboratories plant in New Jersey is turning out product for the world's largest market.
Sun Managing Director Dilip Shanghvi said getting the four Ranbaxy plants that have been banned by the FDA into compliance is his top priority once the deal is done, even ahead of making cuts to its system to eliminate redundancies. However, he said nothing about cutting back on Sun's existing operations. Sun and Japan's Daiichi Sankyo, which owns controlling interest in Ranbaxy, expect the deal to close by the end of the year.
- here's the statement
- read the Detroit Free Press story