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In a major setback for Ranbaxy Laboratories, the US Food & Drug Administration (FDA) has banned the entry of over 30 medicines manufactured by the company at two of its Indian facilities. The regulator has also decided not to grant any new approval to Ranbaxy to sell drugs in the US that are manufactured at these facilities at Dewas (MP) and Paonta Sahib (HP).

Ranbaxy did not quantify the revenue loss arising out of this ban. While there is no consensus on the potential implication on revenues, some industry analysts peg the impact for the next 12 months at 10-15% of projected annual revenues of around $1.7 billion in 2008.

Prabhudas Lilladher’s head of research (pharma) Ranjit Kapadia said, “About 7-8% of the company’s total revenue or a third of the US sales could be affected. The other implication is that other countries importing medicines from the two Ranbaxy facilities could also turn suspicious.” However, the estimate on revenue impact could not be independently verified and is by no means a consensus figure.

In its letters to Ranbaxy, the US drug regulator has cited cross-contamination problems at the Dewas facility and equipment validation and improper maintenance of inspection records at its Paonta Sahib as reasons for its action. “Because of the extent and nature of the violations, FDA today issued an Import Alert, under which US officials may detain at the US border, API and both sterile and non-sterile finished drug products manufactured at such Ranbaxy facilities and offered for import into the US,” said an FDA statement.

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