Share of Sun Pharmaceutical Industries fell more than 6% intra-day on Thursday on news of a US FDA import alert over its Karkhadi unit in Gujarat.
The Karkhadi unit manufactures active pharmaceutical ingredients (API) and formulations.
The import alert comes just days after the the drugmaker received US FDA approval for its generic schizophrenic drug, risperidone.
The scrip was trading 3.98% lower at Rs 579.95 on the BSE at 10.50 am IST.
The US Food and Drug Administration (FDA) has imposed a ban on imports from generic drugmaker Sun Pharmaceutical Industries's plant at Karkhadi in Gujarat, in the latest quality blow for India's drug sector.
Shares in Sun Pharma, India's biggest drugmaker by value, fell after the FDA's "import alert", which appeared on Wednesday on the agency's website.
An "import alert" results in the detention without physical examination of drugs from firms that have not met so-called good manufacturing practices, according to the FDA website.
A spokesman for Sun was not available for comment.
The Karkhadi plant makes both drug ingredients and formulations, according to Sun's 2013 annual report.
The FDA action against Sun comes amid a rash of regulatory sanctions against Indian generic makers in the last year, triggering concerns about the quality of the medicines supplied by India's $14 billion drug industry to countries including the United States, the biggest market.
The FDA has banned all the India plants of Ranbaxy Laboratories (RANB.NS), India's No.1 drugmaker by sales, due to lapses in production quality. Rival Wockhardt has also been barred by regulators from exporting drugs from some of its plants to the United States and the United Kingdom.
India is second only to Canada as a drug exporter to the United States, where it supplies about 40 percent of generic and over-the-counter drugs.