By Archi Damania, CNBC-TV18

Ranbaxy has responded to the US FDA charges. The company has agreed to waive all privileges for audits by Parexel. Parexel International is a clinical research organization that provides services for companies in the pharmaceutical, biotechnology and medical device industries, including consulting and clinical studies.

The US government may withdraw motion if documents are submitted in a month. Charges by FDA is a big negative news for Ranbaxy because almost 25% of Ranbaxy's revenues come from US operations. If the case goes against the company, it may be slapped with high penalty and the supply from Indian units may be suspended.

Along with Parexel, Ranbaxy has submitted thousands of documents to the US FDA. Ranbaxy will address all US government concerns. Based on the audit, Ranbaxy had re-examined the stability data submitted to the US FDA.

Based on Parexel's audits, Ranbaxy made several improvements

in 2007. It informed the Department of Justice about the various audits by Parexel.

Ranbaxy feels that the US FDA and Department of Justice asking for voluntary audits is bad policy. If the government forces companies to disclose voluntary audit reports, companies would stop audits, Ranbaxy feels. Ranbaxy’s counsel asserted privilege protection for remaining audits. In late 2007, the FDA told Ranbaxy that it would not act on applications from Paonta Sahib. In April 2008, the company submitted specific audits to FDA and waived privilege. The US government agreed to withdraw motion if Parexel submits documents in a month. There has been no data manipulation, fraud or dishonesty in applications, Ranbaxy clarified. The US Government has not shared details of its concerns with Ranbaxy yet.