Sun Says It Addressed FDA Observations at Caraco Factory

Sun Pharmaceutical Industries Ltd. (SUNP) said it addressed Food and Drug Administration concerns about quality-control breaches at a U.S. subsidiary that was shut down by the regulator for three years because of manufacturing flaws.

Sun’s Detroit-based Caraco Pharmaceutical Laboratories Ltd. unit, which said in August 2012 it was allowed to resume drug manufacturing, received notifications from the FDA following inspections in January and May this year, according to filings obtained by Bloomberg via a Freedom of Information Act request. Inspectors noted temperature-control lapses, some improperly sealed containers and a deviation from quality-control procedures.

The observations detailed in the FDA’s two so-called Form 483s are “minor” and the “company responded to these a long time back,” Sun said in an e-mailed response to questions.

Sun, India’s largest pharmaceutical company by market capitalization, joins smaller rivals Wockhardt Ltd. (WPL), Ranbaxy Laboratories Ltd. (RBXY) and Strides Arcolab Ltd. (STR) in receiving observations this year from the FDA over compliance concerns. Indian drugmakers are the second-largest supplier of consumer-ready medicines to the U.S., exporting $14.6 billion of pharmaceutical products in the year ended March.

“Once the FDA finds problems at one facility, they may start looking deeper into other facilities -- that’s the reason it’s important for Sun to resolve this as quickly as possible,” said Ranjit Kapadia, an analyst at Centrum Broking Pvt. in Mumbai. “So these problems don’t spread.”

Sun declined as much as 2.1 percent and traded down 1.2 percent at 603.75 rupees as of 10:59 a.m. in Mumbai, headed for the lowest close since Oct. 4. That compared with a 0.2 percent gain in India’s benchmark S&P BSE Sensex Index.

Heart Medication

The number of inspections of pharmaceutical production facilities in India has more than doubled in the past five years, according to data from the FDA in Silver Spring, Maryland.

Caraco’s most recent Form 483, issued on May 30, contained only one so-called observation. In comparison, a Form 483 issued in July to Mumbai-based Wockhardt listed 16 observations.

Sun’s billionaire founder Dilip Shanghvi expanded into the U.S. generic drug industry with his acquisition of Caraco in 1997. In addition to the heart medication carvedilol, Caraco also makes antibiotics paromomycin and minocycline, and a copy of the anticlotting drug ticlopidine.

Caraco’s Detroit plants made as many as 33 drugs until June 2009, when the FDA ordered production to be stopped and U.S. marshals seized products made at the facility after a series of recalls and “continued failure to meet current Good Manufacturing Practice requirements,” according to an FDA statement at the time.

To contact the reporter on this story: Ketaki Gokhale in Mumbai at kgokhale@bloomberg.net

To contact the editor responsible for this story: Jason Gale at j.gale@bloomberg.net

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