Ranbaxy sets aside $500m for manufacturing penalties
pharmafile | December 22, 2011 | News story | Manufacturing and Production |Â Â Â
Indian drugmaker Ranbaxy Laboratories has set aside $500 million to pay financial penalties levied by the US FDA, resulting from compliance problems at its manufacturing facilities.
The company said however, that it has now brought the plants in Dewas and Paonta Sahib back up to code, raising expectations that the FDA’s three-year-old import ban on products made there might be lifted in the coming months.
Analysts suggested that production and shipping of products made at the two plants is likely to restart in 2013, with a recently-approved facility in Mohali helping to support production efforts in 2012.
The financial settlement is attached to a consent decree, in which Ranbaxy has committed to “further strengthen procedures and policies to ensure data integrity and to comply with current good manufacturing practices.”
The FDA placed its import ban on 30 Ranbaxy products in September 2008 and, following an investigation which uncovered evidence of falsified laboratory testing, ordered the company to undertake a wide-ranging review of its manufacturing network in December 2009.
That review led to the closure of a US plant in Gloversville, New York, which was also under regulatory scrutiny.
“We are pleased to have resolved this legacy issue with the FDA as we begin the next chapter in Ranbaxy’s history,” said Arun Sawhney, Ranbaxy’s chief executive.
“With greater clarity around the outlook for our business in the US, we look forward to continuing to serve the US market with safe, effective and affordable products, including our recent launches of atorvastatin and atorvastatin-amlodipine besylate,” he added.
The rehabilitation of Ranbaxy’s manufacturing network will be particularly welcomed by its parent company Daiichi Sankyo, which acquired the Indian drugmaker in a $4.8 billion deal in 2008, just before news of the compliance issues broke.
Daiichi Sankyo revised its earnings forecast for the fiscal year ending March 2012 down in the wake of Ranbaxy’s announcement, with the inclusion of the consent decree provision as an extraordinary loss. Net income expectations for the year have been cut by 24 billion yen to 26 billion yen ($330m).
Phil Taylor
