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The serious allegations have sent Ranbaxy shares plummeting to a 7-year low close
New Delhi - The United States Food and Drug Administration (US FDA) has accused India's largest generics drug maker, Ranbaxy Laboratories, of forging and concealing documents relating to an investigation into the quality of the company's drugs sold in the US market and has filed a motion in the district court of Maryland seeking documents from the Indian firm.
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Ranbaxy depends on the US market for 25 percent of its sales and the ongoing investigation is expected to sully its image in the market. Ranbaxy had global sales of $1.61 billion last year, including $386 million in the US.
The US Government has alleged that officials at Ranbaxy's plant in northern India had used raw pharmaceutical chemicals from unapproved sources, fabricated in-house test data to meet US FDA standards and attempted to conceal the fraud from FDA inspectors.
The "pattern of systemic fraudulent conduct," the government said in papers filed in district court, left an untold portion of the tablets and capsules made by Ranbaxy "subpotent, super potent or adulterated."
"The government has reason to believe that these violations have resulted and continue to result in the introduction of adulterated and misbranded products" into the US market, federal prosecutors said. The prosecutors have urged the court to force Ranbaxy to turn over an internal review of its manufacturing operations in India.
The charges are also expected to jeopardize the $4.6 billion acquisition agreement between Ranbaxy and its acquirer, Japanese drug firm Daiichi Sankyo.
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