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Ranbaxy shares continue to fall; Canada regulator takes action

Ranbaxy shares continue to fall; Canada regulator takes action
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First Published: Sat, Feb 28 2009. 12 22 AM IST

In a soup: Ranbaxy’s Malvinder Singh. The latest controversy has triggered varied reactions from regulators. Harikrishna Katragadda / Mint
In a soup: Ranbaxy’s Malvinder Singh. The latest controversy has triggered varied reactions from regulators. Harikrishna Katragadda / Mint
Updated: Sat, Feb 28 2009. 12 22 AM IST
New Delhi / Mumbai: Share prices of Daichii Sankyo Co. Ltd and its India unit Ranbaxy Laboratories Ltd continued to fall for the second straight day after a US regulator said India’s top drug maker by sales falsified data on manufacturing standard compliances.
In a soup: Ranbaxy’s Malvinder Singh. The latest controversy has triggered varied reactions from regulators. Harikrishna Katragadda / Mint
Ranbaxy closed 4.80% down at Rs161.80 on the Bombay Stock Exchange on Friday and Daiichi Sankyo fell 5.3% to end at 1,591 yen on the Tokyo Stock Exchange.
The latest development has already triggered varied reactions from other regulators. Also, India’s drug industry association has expressed concern that this could mean slower drug approvals for other pharma firms.
Ranbaxy seems to be safe in the UK, for now. The country’s Medicines and Healthcare Products Regulatory Agency (MHRA) told Mint it was aware of the Food and Drug Administration’s report, and the US regulator’s concerns appear to have arisen from an associated Batamandi plant in Paonta Sahib, Himachal Pradesh, which does not supply products to the UK.
“The Paonta Sahib site has been visited on a number occasions in the past by MHRA. As recently as October 2008, the site was inspected by MHRA inspectors in collaboration with inspectors from a number of other EU member states and MHRA partners,” MHRA press officer Florence Palmer said in an email. “In view of the MHRA findings at Paonta Sahib and at other Ranbaxy sites, we have no evidence to suggest that there are any data verification concerns, and hence, products will continue to be imported and marketed.”
Ranbaxy’s UK sales was $38 million (Rs193 crore) in 2008.
Health Canada, that country’s drug regulator said on Thursday that Ranbaxy Canada had already agreed to hold all drugs coming into the country from the Paonta Sahib factory.
“Following Health Canada’s request, Ranbaxy Canada has quarantined all products imported into Canada from the Paonta Sahib site. Health Canada continues to review all information to determine if there is a risk to health or whether further regulatory action is required,” said spokesperson Alastair Sinclair in an email in response to queries from the Canadian Press. Mint’s emails and calls to Health Canada remained unanswered.
Ranbaxy declined to comment on the development. “Ranbaxy had sales of $54 million in Canada in 2008, which is 3% of overall sales. So, it is not a very big market in the overall scheme of things,” said an analyst who did not want to be named. He added that if Ranbaxy is asked to stop sales in Canada, the firm’s inventory intended for that country would have to be written off.
Meanwhile, the Indian industry feels cause for concern.
Most of the top Indian drug makers are aggressively filing generic drug applications, or the abbreviated new drug applications (ANDAs), for registrations in the US and European markets.
“We had feedback from many of our members that the FDA has tightened scrutiny of their documents, and the regulator is not ready to accept their explanations at face value since the document forging charges on Ranbaxy surfaced,” said Dilip G. Shah, secretary general, Indian Pharmaceutical Alliance, an industry body that represents top Indian drug makers.
Indian companies have been experiencing delays in FDA approvals of generic drug applications, though the reasons cannot be directly linked to the Ranbaxy issue. In the last two quarters, the pace of regulatory approvals for drugs in the US has become slower due to a multifold increase in number of applications and limited expansion in resources and people in the department, among other reasons. “The average drug approval process time in the US has now extended to 30-36 months from the earlier 16-17 months,” Shah said.
Whether the Ranbaxy issue will have an impact on the industry, will be “very difficult to say, though seems unlikely since the scrutiny is (already) tight,” an official of Sun Pharmaceutical Industries Ltd, India’s largest drug maker by market value, said on condition of anonymity.
He added that “with the US FDA opening offices in India, which is in the long-term interest of our country, we expect to see a gradual improvement in approval time”.
FDA, which is investigating a manufacturing standards non-complaince case against Ranbaxy, had on Wednesday issued a statement that it is halting review of new drug applications of Ranbaxy involving the Paonta Sahib plant because it had evidence of data falsification.
radhieka.p@livemint.com
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First Published: Sat, Feb 28 2009. 12 22 AM IST