FDA ban leads to job losses at Ranbaxy, Wockhardt
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Mumbai: R anbaxy Laboratories Ltd and Wockhardt Ltd have fired a combined 65 employees, roughly 5% of their shopfloor workforce, and are likely to let go of more after being punished by the US drug regulator for non-compliance with prescribed manufacturing standards, three people familiar with the situation said.
While Ranbaxy sacked 45 employees, Wockhardt axed 20, the people said on condition of anonymity. Those asked to leave include production heads, quality and sanitary control officers and operators who were found to be responsible for most of the shortcomings observed by the US Food and Drug Administration (FDA).
As the companies take corrective action and try to become compliant with FDA standards, more jobs are in the firing line at both Ranbaxy and Wockhardt, the people said. Many technical and non-technical employees would also be put on specialized training suggested by consultants who advised them on the compliance process.
Ranbaxy’s four export-oriented manufacturing plants—located in Paonta Sahib and Batamandi in Himachal Pradesh, Dewas in Madhya Pradesh and Mohali in Punjab—have been banned by the FDA from exporting their products to the US after inspections found them to be flouting manufacturing standards. Two Wockhardt production facilities in Aurangabad district of Maharashtra also faced similar punitive action.
To be sure, the dismissals make up a just a small fraction of the workforce of the two companies. Ranbaxy employs about 14,600 at home and abroad and Wockhardt has about 7,900 people on its rolls. The firings are both a punitive action for lapses by employees that led to the import bans and part of a restructuring exercise to induct new employees and improve manufacturing standards.
Ranbaxy and Wockhardt did not officially respond to e-mailed queries on the development sent on Tuesday.
“There were some 45 employees at various levels responsible for production at the first two factories of Ranbaxy (who) lost jobs soon after these plants got the import alerts from the US FDA, and a few more people were also removed from the rolls of the company while it began the corrective measures,” said one of the people cited above.
Ranbaxy’s Paonta Sahib, Batamandi and Dewas facilities have been under the FDA import alert since September 2008. Its factory in Mohali was hit by the import ban last month. The bans had a significant financial impact on the pharma company, controlled by Daiichi Sankyo Co. Ltd of Japan, which had to stop exports of some 30 products from the Himachal Pradesh and Madhya Pradesh factories, and indefinitely delay shipments of many new products from these plants and the Mohali unit. The company has initiated remedial measures at all these plants under a consent decree it signed with the FDA in January 2012.
Wockhardt fired the 20 employees after its plant at Waluj in Aurangabad received import alert in July, said a person familiar with the compliance process at the company. “A few more, who are responsible of the shortcomings at these plants will be asked to leave,” he said.
Both the companies have hired independent consultants to help them emerge from the regulatory bind and follow the FDA’s current good manufacturing practices (cGMP).
“The root cause of the non-compliance issues at most of these Indian units were found to be related to human errors, and the most effective solution to these issues are not only the technology upgradation or automated systems but, more importantly to train their people to bring in a new quality culture into the manufacturing of medicines,” said a cGMP consultant, who is working with one of the affected companies in India.
“Changing the attitude of the management as well as the employees towards achieving this quality perception is the target, although it will lead to loss of jobs for many who can’t change,” added this consultant.
The FDA cited several instances of cGMP violations directly linked with behavioural issues, including misconduct in maintaining records to personal hygiene and carelessness during the manufacturing process.
“We...we will set things right. Ranbaxy today is a different company,” Ranbaxy’s managing director and chief executive Arun Sawhney said in a previous interview in the context of the FDA action.
“The entire board of Ranbaxy is completely reconstituted and as far as the operation level is concerned, there is no one in my current management team that occupied a key position way back in that period,” when the violations took place, Arun Sawhney said in the context of the FDA action at its facilities in an earlier interview.