Another bitter pill for Ranbaxy, now US plant under FDA lens

Form 483 has been issued to the drug maker over Ohm Laboratories in the US

Trouble for Ranbaxy Laboratories seems to multiply. US-based Ohm Laboratories, currently its only facility making medicines for the American market, is also learnt to be under surveillance of the US Food and Drug Administration (FDA).

According to a source, Ohm Laboratories (in the state of New Jersey) was inspected by FDA towards the end of 2012. After this, a 'Form 483' was issued to the company - this is done to notify of conditions which seem to breach the US Food, Drug and Cosmetic (FD&C) Act and related laws.

After the recent FDA red-flagging ('import alert') on Ranbaxy's Mohali (Punjab) facility, the Ohm one was the only FDA-approved facility of Ranbaxy supplying medicines to the US market. The other two key facilities in India, at Paonta Sahib (Himachal) and Dewas (MP), have been under US import alert since 2008. "As it appears, the company has not yet been able to resolve the issues raised by the FDA at Ohm Laboratories," the source said.

OHM ALSO FALLS

• Ohm Labs was inspected by US drug regulator in December 2012
• Ohm is the only facility from which Ranbaxy is supplying drugs to the US
• The US contributed 40% to Ranbaxy's total revenue till 2012
• During 2012, the company clocked sales of Rs 4,968 crore in the US
• Ranbaxy's inability to correct problems at its US factory might rupture its business in the world's largest drug market

A detailed e-mail sent to Ranbaxy, on the status of the FDA Form 483 and corrective measures taken at Ohm Labs, did not elicit any response. Nor did FDA respond to an e-mail query from Business Standard.

For Ranbaxy, the US is a major market, contributing a little over 40 per cent to total revenue till last year, when the company enjoyed 180 days of exclusive marketing rights on its Lipitor generic. During 2012, the company had sales of Rs 4,968 crore in the US, of consolidated sales for the year at Rs 12,253 crore.

Analysts say the market performance is expected to go down, as the company is likely to miss its first-to-file opportunities because of the ongoing regulatory enforcements. Ranbaxy was expected to have made key filings from its Mohali facility, now barred by FDA. These included some of first-to-file products such as Diovan, Nexium and Valcyte, where it could have gained exclusive marketing rights for 180 days.

While stakeholders are hoping the company might have shifted some of these applications to Ohm, the inabiliity of Ranbaxy to correct problems at its US factory might rupture its business in the world's largest drug market. According to Ranbaxy's website, Ohm Laboratories currently manufactures solid dosage forms of analgesics, antibiotics, anti-diarrhoeal, laxatives, antacids and cough & cold remedies.

Ranbaxy's shares had dipped 35 per cent on the BSE on Monday after the Mohali facility got the alert. It closed at Rs 350.50 on Thursday, up 4.9 per cent from Wednesday's close. The scrip has touched a low of Rs 297.25 during the week so far.

DRUG UNIT AUDIT
Some deviations the US FDA's import alert on Ranbaxy's Mohali facility mentions:

• Tablets found to be above the weight limit
• A black fibre embedded in tablets suspected to be either tape remnants on the nozzle head of the machine or a hair from an employee's hand
• Logo erosion & abrasion on surfaces
• No documented follow-up found in the investigation to ensure deviation won't be repeated
• Black spots observed in tablets during compression, likely to have originated from oil in the compression machine
• Dents on capsules. The capsule supplier did not meet physical quality criteria, requiring adjustments to the capsule filling machine
• Unlabelled bottles received by pharmacies
• Visible residual material observed during inspection in the air inlet and exhaust areas
• Routine checking of mechanical equipment not done according to a written programme
• Raw and in-process material storage areas found to be deficient
• Washing and toilet facilities lack hot and cold water
• No directions to employees to wash hands with soap & water after toilet use and before putting on gowns. No direction to employees to wash feet before wearing work sandals issued by factory
• The outdoor well (water source) not fully protected from entry of potentially contaminated water and filth such as rainwater runoff
  

Source: US Food and Drug Administration documents