Ranbaxy shares dip as US blocks import of its 30 drugs
New Delhi/Mumbai/Washington, September 17, 2008 (IANS)

Even as Ranbaxy Laboratories Wednesday said it regretted the US regulator banning the import of more than 30 of its generic medicines, the shares of India's largest drugs maker fell in the equities market. The US Food and Drug Administration (FDA) said Tuesday it was blocking the sale of some of Ranbaxy's drugs including the popular antibiotic Cipro and cholesterol pill Zocor, in view of manufacturing deficiencies at two India units.

“Ranbaxy is very disappointed in the action FDA has taken today,” said the $1.61 billion company, which also delivers 59 drugs to the US healthcare system from three factories in New Jersey and New York. “The company has responded to each concern FDA has raised during the past two years and had thought that progress was being made,” Ranbaxy said in a statement, adding it will cooperate with the agency after examining the issue.

“We are, however, pleased that FDA's testing and review led the agency to conclude that there is no reason to question the safety or effectiveness of Ranbaxy's drugs.”

The news resulted in the company's scrip falling by 7.18% on the Bombay Stock Exchange (BSE) at Rs.376.75, which was, incidentally, the steepest fall among the 30 shares that comprise the benchmark sensitive index (Sensex). The scrip had seen a 52-week high of Rs.613.70 and a low of Rs.299.90, data with the stock exchange showed.

In 2007, North America remained the largest market for Ranbaxy with a 26% share, contributing sales worth $ 419 million. Europe was next with $365 million.

According to the FDA announcement, the warning letters and import alert do not apply to the company's other facilities including its three in the US, that of Ohm's Laboratories, two in New Jersey and one in New York. In other words, the ban imposed does not impose blanket US sales by the Indian drugs major but only blocks the import of its generic drugs and pharmaceutical ingredients made at Ranbaxy's Dewas and Paonta Sahib plants in India.

"With this action, we are sending a clear signal that drug products intended for use by American consumers must meet our standards of safety and quality," said Janet Woodcock, director, FDA's Centre for Drug Evaluation and Research (CDER). "The FDA has notified other agencies and health care professionals to make them aware of today's actions so that they can take appropriate action and advise patients as needed."

The blocked drugs include the antibiotics ciprofloxacin and clarithromycin, the antiviral acyclovir, cholesterol-lowering simvastatin and pravastatin, and the diabetes drug metformin.Two FDA warning letters, listing its concerns about deviations from US current good manufacturing practice requirements, suggest the problems at two suspect plants and relate to deficiencies in the company's drug manufacturing process.

This is the second time in less than three years that FDA has issued a warning letter to Ranbaxy. In 2006, FDA had cited Ranbaxy for violations of US good manufacturing practice at its Paonta Sahib facility.

Tuesday's action is separate from a continuing criminal investigation of whether Ranbaxy submitted fraudulent data to the FDA that allowed sale of substandard drugs.

Ranbaxy, which is being acquired by Japan's leading drug maker Daiichi Sankyo, has been vigorously denying the allegation, calling it part of a conspiracy to undermine the company.

The FDA move also could affect a US programme that funds AIDS drugs for Africa, as Ranbaxy is a supplier of low-cost generics. The FDA has notified charities and officials involved in the programme of its concerns about drug quality.

The Ranbaxy warning comes amid mounting concern in the US about the safety and effectiveness of imported drugs. A 2007 report found that FDA inspectors had not visited two-thirds of foreign drug manufacturers and in July, members of Congress began probing whether the FDA knew that Ranbaxy had provided potentially fraudulent information but approved its products anyway.