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More woes for Daiichi as Ranbaxy units stop API shipments

Manufacturing problems continue to gather pace

Ranbaxy

Ranbaxy's manufacturing problems continue to gather pace, with all shipments of active pharmaceutical ingredients (APIs) now suspended at two Indian plants.

The Toansa and Dewas plants are already prohibited from shipping products to the US thanks to an FDA import alert, but the latest announcement suggests supplies to other parts of the world, including Europe, will be interrupted.

Ranbaxy's Toansa plant was issued with a Form 483 indicating violations of Good Manufacturing Practice (GMP) earlier this year and placed under an import alert shortly afterwards, while shipments into the US from Dewas have been restricted since 20009.

At the moment it is not clear if the suspension will lead to medicine shortages and whether Ranbaxy has made arrangements to source API from other facilities.

In a statement to the stock exchange, Ranbaxy said it was investigating "processes and controls" at all its API manufacturing and quality control units, adding it was a voluntary decision that was taken out of "abundant caution".

The company said it has also set up a Quality & Integrity Committee to provide oversight of its manufacturing operations, although observers might question why - with several of its plants now under scrutiny by regulators - this action was not taken some time ago.

"We will resume shipments after reassuring ourselves about the processes and controls at these facilities," said Ranbaxy company secretary Sushil Patawari.

Ranbaxy's parent Daiichi Sankyo issued a longer press release about the suspension, which went on to apologise "to all stakeholders for the inconvenience caused by the further suspension of API shipments this time".

Neither company indicated the likely impact of the suspension on its finances, although Ranbaxy's latest results statement indicated that the import alert from Toansa into the US alone led to a 2.6bn rupee ($42m) charge last year.

In a show of support, Daiichi also said that the Indian pharma company "is one of our most important affiliates", adding that it remains "committed to continuing to offer full support for Ranbaxy to improve quality standards".

Last May, after Ranbaxy was fined $500m by US authorities for GMP violations at its plants, Daiichi filed a lawsuit against former shareholders in the company claiming it had been misled about the extent of the quality deficiencies. The case came to court for initial hearings last November.

Article by
Phil Taylor

25th February 2014

From: Sales

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