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Manufacturing continues to undercut Ranbaxy

Fallout from generic Lipitor recalls still raining down on generics maker
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Ranbaxy Laboratories says it is back in the generic Lipitor game, having repaired its most recent manufacturing problems at a plant in India. Now it must also restart the process of repairing its reputation as a top generics manufacturer after yet another manufacturing foul-up and surprising analysts with an unexpected quarterly loss.

"I don't have an answer about repairing our reputation, but I can tell you we have received a shipment of the API and we will be manufacturing finished dosage in a day or so," Charles M. Caprariello, Ranbaxy vice president of corporate communications, told FiercePharmaManufacturing. "In the grand scheme of things, first and foremost is we have to prove we can manufacture both the API and the finished dosage, and everyone wants to know when we will be back in the marketplace."

Ranbaxy recalled 41 lots about three months ago after discovering tiny glass particles in an ingredient. It halted production to investigate and, as The New York Times points out, tracked the problem to a cracked lining in a mixing tank at a plant in India. The FDA determined the danger was as minuscule as the particles of glass that were found, but that did not prevent the company from being sued by some consumers claiming injuries.

The cost of lost sales and the recall were bigger than expected. The company today surprised analysts by reporting a $91.3 million loss for its last quarter after setting aside $34.4 million to pay for the recall, Reuters reports. Analysts polled by Reuters had expected a profit of about $26 million. The latest recall tripped the Indian drugmaker about 7 months after its return from FDA banishment from the U.S. market. And it has tripped up on the drug that powered it to a massive first quarter in the U.S. Before the recall it was leading the world in the production of generic Lipitor. After that, its 43% market share in the U.S. fell to about 3%, according to IMS Health stats.

Ranbaxy only returned to importing products to the U.S. in April, albeit under a consent decree, after the FDA approved its generic version of Lipitor for which it had 6 months of exclusivity. Ranbaxy has been embroiled in manufacturing problems since 2008, when the FDA barred 30 products from the U.S. The agency not only found problems with its plants but also determined that the Indian company had faked some data it had sent to the agency.

In early 2012, Ranbaxy and Daiichi Sankyo, the Japanese company that owns controlling interest in Ranbaxy, entered into a 5-year agreement with the Department of Justice and the FDA, part of which required the company to use independent, outside consultants to oversee its operations and report regularly to the agency. It also forfeited the 180-day exclusivity it had for three unnamed products.

CEO Arun Sawhney said today that Ranbaxy has "made good progress on the Consent Decree honoring all our commitments to date."

- read the Reuters story 
- here's the restart announcement 
- more from The New York Times (sub. req.)
- and the earnings report

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