India's Ranbaxy Laboratories has operated for three years under the dictates of a 55-page consent decree intended to keep its manufacturing operations on the up and up. But from a regulatory standpoint, things have only gotten worse: In the last 6 months the FDA has banned two more Ranbaxy plants, leaving it with just one of 5 FDA-approved facilities able to serve the U.S. So the maker of generics will try yet again to put things right so that it can sell more products in its largest market.
Today, Ranbaxy told the Bombay Stock Exchange that its board had set up a new "Quality & Integrity Committee … to assure good governance to all Ranbaxy stakeholders." The company said it was assessing operations at its active pharmaceutical ingredient manufacturing and quality units and that it had decided to halt production at its plants in Toansa and Dewas, two facilities already banned from exporting to the U.S. "This voluntary decision was taken as a precautionary measure and out of abundant caution to better allow the company to assess and review the processes and controls," Ranbaxy said, adding that it will resume production when it is satisfied it has those in order.
It is not unusual for drugmakers to stop production while they do major upgrades at a facility, and many plants, including in the U.S., have done just that after the FDA has handed them a list of issues that need addressing. The plant in Dewas, along with one in Paonta Sahib, were both restricted from shipping to the U.S. in 2008, when Ranbaxy's problems with faking drug data were first uncovered. A plant in Mohali was banned last September and the Toansa API facility in January when inspectors found it retesting products until it got the analytical results it needed and deleting the failed results from computer systems. While they could not ship products to the U.S., they were still selling drugs in Europe and India, and that will now be affected, sources tell Reuters.
Analysts point out to Reuters that if it now has to buy APIs from outside sources, it will affect the drugmaker's margins. But the drugmaker has already seen its earnings swing to a loss, and unless it gets its problems with the FDA patched up, its future profits will be deeply restricted. Japan's Daiichi Sankyo owns a majority share of Ranbaxy. The Indian drugmaker did not say today whether Daiichi Sankyo had recommended the actions, but CFO Manabu Sakai insisted last month that the Japanese drugmaker would do whatever was needed to get Ranbaxy's facilities in line with FDA expectations. He said that while it had already devoted a lot of effort to getting Ranbaxy straightened out, new "drastic measures" were in store.