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Earlier this year, Ranbaxy made headlines after the U.S. Department of Justice announced that the firm pleaded guilty to felony charges relating to selling adulterated drugs and agreed to pay $500 million in a settlement to resolve allegations of false claims, quality violations and false statements to the FDA.
The settlement came after a series of investigations of Ranbaxy plants in Dewas and Paonta Sahib beginning in 2006, that did not however lead to the FDA pulling back drugs already on the market. In February 2009, the FDA imposed an Application Integrity Policy that effectively closed down further drug applications from Ranbaxy.
This week reports, including by Reuters, said that documents suggested that the black fibre embedded in the tablet was likely either “tape remnants on the nozzle head of the machine or a hair from an employee's arm that could be exposed on loading the machine.”
The FDA’s latest decree saw Ranbaxy shares crash 35 per cent at one point on Monday’s trading. The firm gets more than 40 per cent of its sales from the U.S. Ranbaxy was quoted saying that it would review the details of the alert and take “all necessary steps to resolve the concerns,” at the earliest, adding that the FDA conducted inspections at Mohali in 2012 and that since then “the company believes that it has made further improvements at its Mohali facility.”
Even as recently as June 2013 Ranbaxy CEO Arun Sawhney’s had assured that the Mohali plant was meeting regulatory standards, saying on one occasion, “We will resume supplies of atorvastatin for U.S. pharmacies and retail market, manufactured at the Mohali facility over the next few months. We have not done so [till now] because of commercial reasons.”
Neither the U.S. nor the Indian regulators have prosecuted top Ranbaxy officials, including the former owners of the company, brothers Malvinder and Shivinder Singh, who sold the company to Japanese Daiichi Sankyo Co in 2008 for $2 billion.