Caraco plant in Detroit being shut down by Sun Pharma

A Caraco Pharmaceutical Laboratories plant that the FDA had U.S. marshals secure 5 years ago is getting the old heave-ho. Owner Sun Pharmaceutical will close the Detroit facility by the end of June and lay off about 180 workers.

The Indian drugmaker announced the closure Friday without specifying the number of employees affected. It only said that they will get more than what their severance would entitle them to and that it intends to transfer production to other facilities.

But according to the Detroit Free Press, 178 people are still working at the plant. That is 60% less than the more than 450 that worked there before the plant ran afoul of the FDA in 2009. The Detroit plant and one in nearby Wixom were cited by the FDA in a warning letter in 2008. The company had to recall metformin pills for diabetes that fell on both sides of the size specification and were contaminated with metal scrapings, the warning letter said. The FDA said Caraco had poor control of its raw materials and a possible formulation error. 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, got to work on remediation and in 2012, the FDA closed out the warning letter.

Sun Pharma Managing Director Dilip Shanghvi

Sun bought Caraco in 1997 to better establish itself in the U.S. Sun has grown significantly since then and will get much larger, and its U.S. presence more pronounced, with its $3.2 billion buyout of its deeply troubled compatriot Ranbaxy Laboratories. Sun and Japan's Daiichi Sankyo, which owns controlling interest in Ranbaxy, announced the deal last month, saying they expect to be able to close by the end of the year.

Ranbaxy has a big presence in the U.S. with 5 FDA-approved plants, but four of its plants in India are currently unable to sell in the U.S. because the FDA has 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 Ranbaxy plants 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.

- here's the statement
- read the Detroit Free Press story