)
In Mohali Industrial Area Phase VIII-B, about 15 km from Chandigarh city, a service lane branches out. Here, the signage includes the names of Ranbaxy, Godrej, Tata Infotech and Shapoorji Pallonji.
According to a Daiichi Sankyo official this reporter met outside the Ranbaxy plant, a five-member team from the Japanese parent is currently on a visit to the facility, to tighten processes and implement good manufacturing practices. Asked about the duration of the visit, the official said, "It is an indefinite visit…it depends on the work we are brought for."
The dosage manufacturing facility received FDA's approval in October 2011 and started supplying one of the company's most prized products, the Lipitor generic, to the US in early 2012. It was recently barred from the American market after the regulator, during an inspection last year, identified serious manufacturing shortcomings at the plant. The regulator also extended a consent decree on Ranbaxy's other two Indian facilities-in Paonta Sahib and Dewas, to the facility here.
Ranbaxy did not allow this reporter to enter the premises here. A detailed e-mail questionnaire on the facility to the company didn't elicit any response.
Two security personnel guard the main entrance to the factory. One can see employees stepping out of the facility for a smoke every now and then, as smoking had recently been banned within the factory premises.
A huge plot of land opposite the Ranbaxy facility has been bought by a hospitality major. According to the security guard on this plot, the situation at the Ranbaxy facility was quite different a few months ago. "Ek-ek shift mein challis-challis security hoti thi…achanak se sab ki chutti kar di. Sirf 12-14 bache hai ab. Sunte hai dawaion mein ghapla hua hai (Each shift had 40 security guards…suddenly, all were removed. Now, merely 12-14 are left… heard there was a scam in the medicines)," he said.
This, however, wasn't verified by the company.
At a tea stall in the vicinity, employees from other companies said the Ranbaxy staff had stopped engaging with others. "There are strict instructions. They do come out often, but do not engage much with us," said one such employee.
| US FDA observations |
|
A number of Ranbaxy employees Business Standard had approached refused to talk. Some said there was a strict gag order and only those who were designated could provide information. An employee with the manufacturing department agreed to speak, albeit after much persuasion. "The motivation level is down. Though the company is taking steps to put things on the right track, the situation continues to be uncertain," he said.
Ranbaxy has officially maintained it isn't downsizing. In the recent past, it has engaged consultants such as Mercer and Boston Consulting Group to benchmark operating standards and staff productivity with industry principles. Sources said the company had recently inducted more Japanese executives to not only ensure compliance and accountability but rebuild its image. It has appointed Koji Ogawa as head of corporate services, and Dale Adkisson as executive vice-president and head (global quality). Both Ogawa and Adkisson are in Ranbaxy's executive team. The team reports directly to the chairman and the board of directors.
Some believe the problem has more to do with internal conflicts at the mid and junior levels. A senior government official, who claimed to have been present in the company's manufacturing compound here for a meeting on one of the days the FDA was inspecting the plant in December 2012, said he suspected foul play. "I am a diabetic and I went to the toilet in the same facility a number of times but did not spot any such problem as has been highlighted by the US regulator. I very well remember the water was running fine in the toilets," he said.
The FDA authorities had, in a Form 483 issued to Ranbaxy's Mohali facility, said during its inspection, it had found the toilet facility adjoining one of the change rooms "did not have running water for hand washing and toilet flushing. The water supply was reportedly turned off during maintenance and inadvertently let off". The Form 483 issued by FDA at the conclusion of an inspection, to notify the company of objectionable conditions also stated there was no procedure at the facility to direct employees to wash hands or feet with soap after using the toilet.
While the FDA found deviations and contamination in the form of the presence of black fibre, suspected to be hair from an employee's arm, and black spots on tablets, which could be machine oil, etc, the government official, privy to manufacturing practices, said such circumstances were "strange". "I personally feel there is foul play. I understand if there is presence of small glass particles because it is possible during manufacturing, though it isn't permissible. But how can a hair or machine oil contamination happen? It is not possible without human intervention," he said, stressing Ranbaxy's facility was one of the best in the country and compliant with international standards.
A former Ranbaxy executive involved with the construction of the factory said Rs 250-300 crore was spent to build the plant.
After the company's two key manufacturing factories at Paonta Sahib (in Himachal Pradesh) and Dewas (Madhya Pradesh) recorded FDA import alerts in 2008, the company had to shift many of its key product applications to its US facility, Ohm Laboratories. Since this led to capacity constraints at Ohm, an expensive manufacturing site, it was thought the new Mohali facility would provide relief to Ranbaxy, as manufacturing costs are far lower in India.
In December 2012, chief executive and managing director Arun Sawhney had told Business Standard the company planned to expand the Mohali facility in 2014, primarily to meet the increase in demand from the US market. "We will look at adding another block at Mohali in 2014, as we have additional land there," Sawhney had said.
Sources in the know say now, production at the Mohali plant has slowed drastically. A contractor involved with painting the industrial floor said, "For the past few months, our contracts have come down significantly. Production has reduced. So, why would they give us work," he asked.
During the September quarter, the company recorded an exceptional cost of Rs 69.5 crore, primarily due to stock write-off at Mohali. After the September earnings were announced, Sawhney told investors the existing capacity was sufficient for business requirements.
On condition of anonymity, an analyst said, "The company has only one facility (US-based Ohm Laboratories) catering to the American market and the management is saying there is no capacity constraint. This indicates demand has fallen, which may reflect badly on their revenues." Sawhney, however, indicated the facility might supply to other countries.
