FDA ban on Gujarat plant hits Sun Pharma

FDA ban on Gujarat plant hits Sun Pharma

The US Food and Drug Administration (FDA) has banned imports from Indian generic drugmaker Sun Pharmaceutical Industries Ltd's plant at Karkhadi in Gujarat, in the latest quality blow for India's drug sector.

The FDA has imposed a rash of regulatory sanctions on Indian generic makers in the last year, triggering concerns about the quality of the medicines supplied by the $14 billion industry to countries including the United States, the biggest market.

"The FDA is becoming more stringent. It's a learning curve for everyone. You have to invest more," said B&K Securities analyst Rohit Bhat. "Companies will have to pull up their quality parameters."

It was not immediately clear why the FDA imposed the ban on Sun Pharma's Karkhadi plant.The FDA issued an “import alert" against the factory on its website said on Wednesday. The agency defines such a sanction as something that results in the detention without physical examination of drugs from firms that have not met so-called good manufacturing practices.

The ban on the plant underscores growing concerns about the quality of medicines made in India, often referred to as the low-cost “pharmacy to the world,” as demand for generics grows in countries from the United States to Japan.

A Sun Pharma spokeswoman said the financial impact of the FDA ban on US shipments from the plant, which makes antibiotic cephalosporin, would be  “negligible.” 

Sun Pharma also said it had initiated "several corrective steps” to address the FDA's concerns, and kept its guidance for consolidated sales for the fiscal year ending this month.

The Karkhadi plant is one of Sun Pharma's 25 manufacturing plants, of which 11 are in India. Three of those plants, including the Karkhadi plant, are in Gujarat. Shares in Sun fell as much as 6.4 percent on Thursday.

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