The voluntary recall of an anti-acne drug is the latest blow to India's pharma industry
Ranbaxy Laboratories is voluntarily recalling a batch of its best-selling anti-acne drug remaining in the US market that was banned earlier by the American regulator, after it failed a dissolution test to assess the efficacy, uniformity and stability of the dosage.
The product figured among the 30 Ranbaxy drugs banned by the US Food and Drug Administration (USFDA) in September 2007, but it had allowed the company to sell those drugs which were already in the market since it was not found to be unsafe.
ET NOW broke the story on Thursday citing the USFDA website that the company's American subsidiary Ranbaxy Pharmaceuticals was recalling 1,303 cartons of Sotret Isotretinoin, each containing 100 capsules of 40 mg, effective June 26.
"Ranbaxy tested the lot in question and found it to be within specifications based on US FDA's testing and recommendations. But given Ranbaxy's commitment to the health and safety of patients, a recall has been initiated to the wholesaler and distributor level," said a company spokesman.
HDFC Securities' vice-president for institutional research Ranjit Kapadia said the resultant financial loss for India's largest drug maker by sales was limited, pegged at around $1 million.
Before the September ban, the drug had sales of around $50 million per year. Ranbaxy got the USFDA nod to market the drug in 2002, and according to reports, it commanded more than one-third of the market in 2007.
This is the third time that Ranbaxy is recalling an established drug, the second time this year.
In 2007, it withdrew 73 million drugs of Gabapentin for exceeding the permissible impurity level, and in April this year, Ranbaxy voluntarily recalled all lots of Nitrofurantoin (Monohydrate/Macrocrystals) 100 mg capsules for non-conformity with the approved laboratory specifications.
The Ranbaxy spokesman said the recall was being conducted with the knowledge of the US FDA, and since it is a Class III recall, the use of the drug is unlikely to cause adverse health effects to patients. Industry experts say consumer litigation are unlikely for such drug recalls.
"FDA has become increasingly strict on drugs imported into the US. So, this action should not been seen in isolation as FDA has been taking action even for food items imported into the country," said HDFC's Mr. Kapadia.
According to another industry observer, the recall proved that FDA is taking additional stringent action to identify and correct even minor deviations with its drugs. Roche, the innovator company, stopped selling its drug Accutane in the US on June 25 due to competition from generics. Besides, it had to pay damages running into $33 million to patients who blamed the drug for bowel disease.
The company scrip closed at Rs 253.50, up 2.14% on the Bombay Stock Exchange on Thursday after ET NOW broke the news.
Ranbaxy has put together a new team to address the ongoing FDA issue and has met with FDA officials three times since January. It has also submitted a corrective action plan to the FDA and is scheduled to meet the regulator soon.
The tiff with FDA continues to hurt Ranbaxy's US sales that account for about a quarter of its $1.5-billion global turnover.