Ranbaxy Laboratories on Wednesday announced that it had signed a consent decree with the U.S. Food and Drug Administration (USFDA) to lift a ban on import of drugs from certain manufacturing plants in India. The immediate fallout of the move will be $500 million payout.
To pay $500 million
Under the consent decree, Ranbaxy has committed to further strengthen the procedures and policies to ensure data integrity and to comply with the current good manufacturing practices.
The consent decree is subject to approval by the U.S. District Court for the District of Maryland. In 2008, the USFDA had banned 30 generic drugs produced by Ranbaxy at its Dewas (Madhya Pradesh) and Paonta Sahib and Batamandi unit in Himachal Pradesh, citing gross violation of approved manufacturing norms. In the same year, the U.S. Department of Justice had moved a motion against the company in a local court alleging forgery of documents and fraudulent practice.
“We are pleased to have resolved this legacy issue with the FDA as we begin the next chapter in Ranbaxy's history. While we were disappointed by the conduct that led to the FDA's investigation, we are proud of the systematic corrective steps we have taken to upgrade and enhance the quality of our business and manufacturing processes,'' Arun Sawhney, Ranbaxy CEO and Managing Director, said in a statement.
Further, Mr. Sawhney said: “With greater clarity around the outlook for our business in the US, we look forward to continuing to serve the U.S. market with safe, effective and affordable products, including our recent launches of Atorvastatin and Atorvastatin-Amlodipine besylate. Importantly, these developments bring greater predictability to Ranbaxy's U.S. operations and allow us to focus all of our efforts on bringing high quality products to market for the benefit of consumers.''
In a related development, Daiichi Sankyo Company and Ranbaxy Laboratories announced a synergistic initiative in Malaysia where Ranbaxy will market innovative products originally discovered by Daiichi Sankyo. Following Singapore, this is the companies' second marketing synergy in the ASEAN region.
Daiichi Sankyo has also announced revision in its earnings forecast and salary cuts for its directors.
Ranbaxy will market Cravit, the synthetic anti-bacterial agent originally discovered by Daiichi Sankyo, in Malaysia from January 1. The product is now commercialised by First Pharmaceutical Sdn Bhd (First Pharma) in Malaysia. Daiichi Sankyo and First Pharma have agreed to transfer the marketing rights of Cravit from First Pharma to Ranbaxy. First Pharma will continue to be Daiichi Sankyo's marketing partner for other products it had in-licensed from Daiichi Sankyo.
