Removal Of 27 ANDAs WIll Have Negligible Impact On Ranbaxy's Revenues

India’s foremost pharma company, Ranbaxy, has further moved one step ahead on USFDA clearance on its manufacturing facilities.  In the latest development, USFDA has removed the approval of 27 ANDAs of Ranbaxy. These products are no longer marketed by Ranbaxy and the company had made a request to USFDA to withdraw the applications. In fact the company also turned down the opportunity for hearing on this issue. This will have negligible impact on the revenues of Ranbaxy.

Ranbaxy had made the request under a consent decree of permanent injunction which it entered with USFDA in January 2012. As per the decree, Ranbaxy is required not to submit another application for these withdrawn drugs. It is also required not to transfer these ANDAs to another party. What this mean is that the benefits of these products are gone forever for these products. One however should note that the company is not selling these products any more due to the import alert and does not include them in its base business revenues in USA.

This withdrawal is part of the initiatives that Ranbaxy has taken to remove the import ban. First it entered in the consent decree with USFDA. Secondly, it has made provision of USD 500 million which is quite high. Third, Ranbaxy has also hired consultants which are giving valuable inputs to the company. Now with the products removed, Ranbaxy is strictly complying with the USFDA. The company has recently received USFDA approval for its Mohali facility and also has launched the blockbuster Lipitor in the US.

We believe that the company is moving in the right direction. Recently Cadila has received approval for its Moraiya facility after it had received warning letter from USFDA last year. Claris Lifesciences has also received positive feedback from USFDA on its efforts to remove the import ban. Ranbaxy’s efforts may be going in right direction and given the recent USFDA approvals to two other pharma companies, Ranbaxy may not be far from the good news.