Sun Pharma plant feels the heat of FDA import ban

A Sun Pharma plant has joined the growing ranks of Indian operations banned by the FDA for manufacturing issues. Unlike Ranbaxy Laboratories and Wockhardt, two other Indian generics players that have recently felt the sting of import alerts, the Sun Pharma plant is not key to its financial success.

Sun did not say what issues have landed the plant in Karkhadi in Gujarat, India, in hot water with the regulator, but on Wednesday the facility was added to the FDA's import alert list. That means its products, made for human or veterinary use, are not to be allowed into the U.S.

A Sun Pharma spokeswoman told Reuters that the company was working on the issues raised by FDA inspectors. The plant--one of more than two dozen the generic drugmaker has around the world--manufactures antibiotic cephalosporin. But she said it accounts for less than 1% of the company's sales, so the ban would not change its financial picture significantly.

That is not the same for Ranbaxy and Wockhardt, which have both seen the agency ban two of their FDA-approved plants each since May of last year. Wockhardt executives have said the ban of one of its key FDA-approved plants could cost it $100 million. Since then, the FDA has banned a second plant, and some European countries have blocked some of its products as well.

The regulatory picture is also dire for Ranbaxy. With an Indian production plant banned in September, and its main API facility added to the list in January, Ranbaxy has had its U.S. supply operations crippled. Its Toansa API plant supplies a majority of the ingredients for its U.S. approved drugs. It was also relying on its now-banned facility in Mohali to produce first-to-market generics for which Ranbaxy has been approved. Those include two blockbusters, Novartis' ($NVS) heart drug Diovan, which is already off patent, and Nexium, the stomach upset drug from AstraZeneca ($AZN). Ranbaxy now has only a plant in New Jersey which can still make drugs for the U.S. market. It is reportedly negotiating with outside suppliers for the APIs it needs for those two launches and may be seeking approval to make them in the New Jersey facility.

Ranbaxy's problems have been a boon to Novartis, which has had its finances buoyed by the unexpected windfall of Diovan profits since the drug went off patent in 2012. The same may come to pass for AstraZeneca, which will lose patent protection on blockbuster Nexium May 27. Reuters reported a forecast from a Barclays analyst this week that the U.K. company would enjoy a 10-cent boost to its 2014 earnings per share with each month of a generic delay.

The ban of the Sun facility comes only weeks after FDA Commissioner Margaret Hamburg returned from a trip to India where she discussed quality issues with government and industry officials. The country provides about 40% of the generic and over-the-counter drugs U.S. consumers take, and so the FDA has beefed up oversight there with an in-country inspection staff and more diligence. She noted during her trip that many of India's drugmakers have modern facilities with top-notch operations, but she urged regulators there to step up their game to ensure that Indian companies were hitting international expectations.

- read the Reuters story
- here's the import alert

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