The New Nation - Internet Edition

The United States Food and Drug Administration (FDA) says it has banned the import of more than 30 generic drugs made by Indian drug firm Ranbaxy, reports BBC

The FDA said the decision was made after it found manufacturing quality problems at two of Ranbaxy's factories in India. The import ban affects some popular generic versions of antibiotics and cholesterol medicines. Ranbaxy says it is "disappointed" with the decision of US drug authorities.

The FDA said the move would not create any shortages of drugs in the United States, which could be obtained from other sources.

In July, US prosecutors had alleged that Ranbaxy, India's largest pharmaceutical company, deliberately lied about the quality of its low-cost drugs, including those for HIV.

The US Department of Justice wanted the firm to hand over key documents relating to drug testing procedures.

'Baseless'

Ranbaxy said it was "very disappointed" with the FDA action. "The company has responded to each concern FDA has raised during the past two years and had thought progress was being made," the firm said in a statement issued on Wednesday. The firm was paid millions of dollars by the US government to provide low-cost HIV drugs for President Bush's emergency plan for AIDS relief, which was set up to help AIDS patients in 120 countries around the globe.

Defending the reliability of its drugs, Ranbaxy had said the US Food and Drugs Administration had tested over 200 random samples of its products and found them "complying with all the specifications".

In June the Japanese pharmaceutical company Daiichi Sankyo agreed to pay more than $4bn (£2bn) for a controlling stake in the firm.

The US government has been investigating Ranbaxy since February 2006 when the FDA issued a warning letter over what it said were manufacturing violations found at a Ranbaxy factory in India.

Since then Ranbaxy has been trying to resolve the issue with US regulators.

Last year, US officials seized documents from Ranbaxy's US headquarters in New Jersey.

In July, Justice Department prosecutors alleged that the company had systematically lied about the makeup of its generic drugs, which include a cheaper version of US drug maker Merck's cholesterol pill Zocor. The FDA will only approve cheaper generic drugs if they can be shown to be equivalent to the original drug.

US investigators had also alleged that Ranbaxy has used unapproved ingredients in its drugs.

Bloomberg adds: Ranbaxy Laboratories Ltd., India's biggest drugmaker, plunged after the U.S. regulator blocked the sale of more than 30 generic medicines made in two factories by the company, because of deficiencies in manufacturing processes.

Ranbaxy, being acquired by Japan's Daiichi Sankyo Co., fell as much as 10 percent to 362.10 rupees in Mumbai trading, the biggest daily drop in more than two months. The stock recovered from the day's low to trade at 374.1 rupees at 1:03 p.m. The regulator's action puts at risk Ranbaxy's sales in the U.S., which contributed 24 percent to revenue last year. The drugs being blocked include generic versions of Bristol-Myers Squibb Co.'s cholesterol drug Pravachol and cephalexin, an antibiotic used to treat bacterial infections.

"There will be near-term pressure on Ranbaxy's earnings because of the U.S. decision,'' said Abhishek Singhal, a Mumbai- based analyst at Macquarie Group Ltd. Still, "Ranbaxy has built up capacity in the U.S. facilities, which can help it offset part of the supply disruptions.''

The Indian company expressed disappointment with the Food and Drug Administration's order and said the agency hasn't given enough time to address the issues raised in the latest letter.

"The company has responded to each concern FDA has raised during the past two years and had thought that progress was being made,'' Ranbaxy, based in Gurgaon, near New Delhi, said in a statement today. ``The company has just received the warning letters that FDA has issued and has not had the opportunity to review those concerns that FDA has determined are unresolved.''

Continued Cooperation

Ranbaxy will continue to cooperate with the agency to resolve the remaining issues, the company said. Ranbaxy supplies 59 drugs to the U.S. market from its three manufacturing facilities located in the nation.

The drugs affected by the FDA's order are from Ranbaxy's plants in Paonta Sahib and Dewas in India, the regulator said.

The agency's letters cite violations, including inadequate sterile-processing operations and record keeping. Drugs made in other Ranbaxy plants aren't being blocked. The products will be blocked until Ranbaxy resolves deficiencies at the plants, according to the FDA.

There is no evidence the Ranbaxy drugs are harmful, though the violations could lead to defective products, Deborah M. Autor, director of the FDA's drug compliance office, said on a conference call yesterday with reporters.

'Import Alert'

The FDA's ``import alert'' barring entry of Ranbaxy drugs isn't related to a U.S. government investigation examining whether the company fabricated data to get its medicines cleared for sale, according to the regulator.

The U.S. Department of Justice is seeking a court order to force Ranbaxy to turn over an audit allegedly showing the Indian drugmaker distributed ``adulterated and misbranded products,'' according to papers filed in a U.S. District Court.

Ranbaxy has denied the allegations and has waived its privilege to withhold the documents.

"Today's actions are clearly warranted based on the extent and the seriousness of the violations uncovered during our inspections of these two sites,'' Autor said. ``The firm is sufficiently out of control that we think an import alert should be put into place until these deficiencies are corrected.''

Daiichi Sankyo, based in Tokyo, agreed in June to acquire control of Ranbaxy for as much as 198 billion rupees ($4.3 billion). The FDA's move will not hinder the company's acquisition, Daiichi said.

"We will continue to pursue the terms we agreed with Ranbaxy,'' Satoru Ogawa, Daiichi Sankyo's spokesman, said by telephone in Tokyo today.

Daiichi Sankyo agreed to buy the 34.8 percent stake of Ranbaxy owned by its billionaire Chief Executive Officer Malvinder Singh and his family, plus a portion of about $1 billion of preferential stock. Daiichi has also offered to buy 20 percent from other shareholders, and aims to complete the transactions by March, the company said when it made the offer.