Ranbaxy recalls generic Lipitor in US, scrip hit

Nov 24 2012, 01:12 IST
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SummaryRanbaxy Laboratories, already on notice under a US Food and Drug Administration scrutiny for past slippages, seems to have erred again.

Ranbaxy Laboratories, already on notice under a US Food and Drug Administration scrutiny for past slippages, seems to have erred again. The company on Friday said that it is recalling select lots of its most remunerative product, generic versions of Lipitor (atorvastatin calcium) from its most lucrative market — the US. The company said that the recall would lead to a temporarily disruption in supplies.

“The investigation with regard to....this issue (reasons of recall) is expected to be completed within two weeks and thereafter the company expects to resume supplies,” a company spokesperson said. This disruption in supplies for a minimum of two weeks may take a toll on the company’s Lipitor market share of over 45% in the US, which it has gained painstakingly amid fierce competition.

The news saw the company's share price nosedive on the BSE, closing 3.27% down at Rs 496.

While most analysts stressed the need to wait and watch till the reasons for the recall are clear, some fear that if supplies are not resumed swiftly after the specified two weeks, it may adversely impact or delay the ongoing consultation on consent decree that the company has been put under.

A consent decree is a legal agreement between a pharma firm and the US government that contains a series of corrective steps the erring company must implement to avoid litigation by the FDA and to continue to remain in business in the US market. A consent decree is also a court order in itself, which binds the firm to address all listed lacunae within a specified timeline and get these steps verified by independent auditors.

“Ranbaxy Pharmaceuticals Inc is conducting a voluntary recall for atorvastatin calcium tablets, in connection with its 10mg, 20mg and 40mg dosage strengths, packaged in 90s and 500 count bottles and only with respect to certain select lot numbers. The recall does not affect or relate to the 80mg strength. The recall is being conducted at the retail level for such select batches that may contain a foreign substance (small glass particles approximately less than 1mm in size),” Ranbaxy’s US website said.

“The immediate financial impact of this recall on the company could be around $5 million. But it is the imminent loss of market share of this product in the US that is more troubling for the company. Considering there are so many players in the fray with abundant inventory, it wouldn't be surprising to

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