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Ranbaxy voluntarily halts production at its Indian API plants

By Dan Stanton , 25-Feb-2014
Last updated on 25-Feb-2014 at 12:34 GMT2014-02-25T12:34:25Z

Ranbaxy voluntarily halts production at Toansa and Dewas API plants

Ranbaxy has temporarily halted all shipments from two API plants currently under a US FDA consent decree, although both the firm and an analyst say a shortage is unlikely.

Today Ranbaxy told the Bombay Stock Exchange (BSE) it is ”examining processes and controls” at all of its API and quality units and has temporarily put on hold shipments from both the Toansa plant and another facility in Dewas, India.

“This voluntary decision was taken as a precautionary measure and out of abundant caution to better allow the Company to assess and review the processes and controls,” the statement continued. “The Company will resume shipments after reassuring them about the processes and controls at these facilities.”

Last month the Toansa plant  was added to the list of Ranbaxy facility banned from exporting APIs to the US under the consent decree issued by the US Food and Drug Administration after it detected quality problems across the Indian drugmaker’s network.

Sarbjit Kour Nanga, an analyst from Angel Broking, told Ranbaxy’s latest production halt was a direct response and designed to give the firm time to rectify problems at both the Tonsa site and the Dewas facility, which was also included in the consent issued in 2012. While shipments had already ceased to the US, Kour Nanga said APIs were, until today, being manufactured for the local market.


Ranbaxy itself was confident the temporary halt in production would not disrupt supply and cause a shortage.

"In 2013, more than 85% of Ranbaxy business was not dependent on APIs from Toansa," a Ranbaxy spokesman told "Ranbaxy has been working on a de-risking strategy during the last few years where many of our APIs have more than one approved source and manufacturing site. This has and will help us in ensuring continuous supply of most of our drug products to the global markets."

Last month Ranbaxy’s parent company – Japan’s Daiichi Sankyo – told that in the US the firm turned to third parties to try and prevent shortages. And that also seems to be the plan in India according to Kour Nanga.

“Most of the work at Toansa has already been outsourced,” she explained, and, as this action was voluntary, “Ranbaxy should have made plans to avoid any shortages.”


Ranbaxy has also this month implemented a ‘Quality & Integrity Committee’ to “help and assure good governance to all Ranbaxy stakeholders,” the filing reported.

“Its primary role is to provide oversight on the Company's manufacturing and quality operations, systems, organization and integrity.”

Ranbaxy’s share price dropped by 2% following the announcement but Kour Nanga said this was neither unexpected nor particularly an issue, and the price has since recovered.

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