Ranbaxy puts API supplies on hold

Drug maker says it is overhauling norms at Toansa and Dewas units

Ranbaxy Laboratories has suspended shipments of active pharmaceutical ingredients (API) from two of its Indian factories, at  Toansa (Punjab) and Dewas (Madhya Pradesh) to overhaul manufacturing practices. It has also set up a quality and integrity committee on the board of directors, to assure “good governance”.

This comes some weeks after the US Food and Drug Administration (FDA) forbade the Toansa API factory from supplying any product for the American market. The two factories in question are currently banned from supplying products there, following the FDA decision that they’d breached good manufacturing norms.

At present, Ranbaxy’s four key factories in India are banned from supplying to the US. These are three formulation making factories — at Paonta Sahib (Himachal Pradesh), Mohali (Punjab) and Dewas — and the API one at Toansa, the last to come under the FDA scanner.

According to the company’s annual report for 2012, the API and some other businesses contributed around six per cent to its global consolidated revenue of $2.3 billion for that year. The company also makes a lot of API for captive consumption in its own formulations.

Ranbaxy, owned by Japan’s Daiichi Sankyo, told the BSE exchange on Tuesday, “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. The company will resume shipments after reassuring them about the processes and controls at these facilities”.
 

The company said it was “currently examining processes and controls” at all its API manufacturing and quality units and, therefore, shipments from Toansa and Dewas were temporarily on hold.
 

The latest move is likely to impact supplies to other markets such as the European Union, Australia and India, a company official said. The company spokesperson refused to divulge the names of markets where Ranbaxy was supplying API from Toansa and Dewas.



While detailing the financial performance for the quarter ended December 2013, Ranbaxy’s chief executive and managing director, Arun Sawhney, had told its investors the latest ban on the Toansa factory would have an impact of 10-12 per cent on the company’s total US sales.

The ‘quality and integrity committee’ is to provide oversight on manufacturing and quality operations, systems, organisation and integrity, Ranbaxy stated.

While the company has not faced a similar ban from any other market, after the FDA action on Toansa, the European Commission wrote to the Drugs Controller General of India (DCGI), with some queries on the facility. The Toansa factory also supplies to Europe. DCGI, on behalf of the European regulator, inspects plants in India and gives approval for exporting there.

On Tuesday, the shares of Ranbaxy closed at Rs 365.05 on the BSE, up one per cent from Monday’s close.