In yet another blow to Ranbaxy, the US Food and Drug Authority (USFDA) has added Ranbaxy's Mohali plant to the Consent Decree, which was signed by the drug major in January 2012.
The Consent Decree was for regulatory uphaul at its Paonta Sahib and Dewas plants. The Mohali plant had received an import alert from the USFDA earlier on Monday.
The action comes on the back of failure by Ranbaxy to rectify violations almost a year after it was revealed in the audit and will have wider implications, reports CNBC-TV18’s Archana Shukla.
The USFDA statement says it found violations at Mohali in the audits conducted in September and December, 2012. The cGMP violations found have been very significant in nature, including failure to locate these violations and satisfactorily resolve them.
In December 2012, Ranbaxy had to recall certain batches of Atorvastatin supplied from the Mohali plant from the US market. From that point, they have not been supplying the drug from this plant to the US market. Currently, Ohm Labs has been doing it.
They have not got approvals for any drugs, which they have filed from Mohali facility.
Ranbaxy earlier had denied any significant violations at Mohali and stated that all things were in place and that observations made through form 483 was a regular process.
However, the US FDA statement says that the Mohali facility will be subject to the same terms of the consent decree and of permanent injunction entered against Ranbaxy in January 2012.
Hence, Ranbaxy will have to hire an external consultant to conduct thorough inspection at Mohali and chart a thorough a step-by-step process to re-establish cGMP compliance before it can be permitted to supply to US.
Also, none of the new drug filings made from Mohali plant would be considered for approval by USFDA until the consent decree, which now covers all three Indian plants, is completed.
Consent decree was a very strict action which the USFDA had taken for Ranbaxy’s Paonta Sahib and Dewas facilities when they had found significant cGMP violations and data integrity issues at these plants.
With Mohali now being added to the consent decree, the implications would be much wider and remediation would be a long haul. It’s pending USFDA approvals for generic Diovan (patent expired in Aug ’12) and generic Valcyte (which goes off patent on 30th Sept ‘12) is in a state of uncertainty.
It was anticipated that post the regulatory issues at Paonta Sahib and Dewas, these drug filings were transferred to Mohali. Now, concerns would be raised also for Ranbaxy’s ability to monetize its exclusive marketing opportunity for Astrazeneca’s heartburn drug Nexium, which goes off-patent in May 2014.
Investors also need more clarity on the company’s strategies and action plans now in the light of recent developments. On Monday, Ranbaxy in a stock exchange statement had denied any knowledge of the import alert on Mohali.
However, the USFDA statement through much light on the problems that has been plaguing Ranbaxy’s Mohali plant.