US regulator blocks entry of 30 Ranbaxy medicines

NEW DELHI: In a severe setback for Ranbaxy Laboratories, the US Food and Drug Administration (US FDA) has banned the entry in the US of over 30 medicines manufactured by the drug maker at two of its Indian facilities. The regulator has also decided not to grant any new approval to Ranbaxy to sell drugs in the US that are manufactured at its facilities in Dewas (Madhya Pradesh) and Paonta Sahib (Himachal Pradesh).

The US drug regulator has issued warning letters to the drug major where it has cited cross-contamination problems at the Dewas facility and equipment validation and improper maintenance of inspection re-cords at its Paonta Sahib as reasons for its action against Ranbaxy.

���Because of the extent and nature of the violations, US FDA on Tuesday issued an Import Alert, under which US officials may detain at the US border, API and both sterile and non-sterile finished drug products manufactured at such Ranbaxy facilities and offered for import into the US,��� said an US FDA statement.



Ranbaxy did not quantify the revenue loss arising due to this ban. While there is no consensus on the potential implication on revenues some industry analysts peg the revenue impact for the next 12 months at 8-10% of projected annual revenues of around $1.7 billion in 2008 Ranbaxy���s shares fell 6.6% to Rs 379 from Tuesday���s close of Rs 405.90 on BSE.

Prabhudas Lilladher���s head of research (PCG) Ranjit Kapadia said, ���Around 8% of the company���s total revenue or one-third of the US sales could be affected. The other implication is that other countries importing medicines from the two Ranbaxy facilities could also be-come suspicious.��� However, this estimate could be independently verified and is by no means a consensus figure. Angel Broking���s pharma analyst Sarabjit Kour Nangra pegs the revenue implication at only around $30 million

The actual revenue impact will vary on a host of factors such as inventory that has already been shipped to the US, whether the company manufactures these drugs at other manufacturing locations sites and whether it has obtained marketing approvals to manufacture the banned drugs in other facilities.