The US drug regulator Food and Drug Administration (FDA) has banned all drug imports from the Mumbai based mid-cap drug company Ipca Laboratories due to non-compliance in manufacturing standards.
The company informed the stock exchanges today that it has received "a communication from the USFDA stating that all the drugs manufactured from the Company's active ingredient (API) manufacturing facility at Ratlam (Madhya Pradesh), SEZ Indore (Pithampur) and Piparia (Silvassa) will be henceforth refused admission into the United States, as these facilities failed to comply with cGMP (current Good Manufacturing Practces)".
The company had revenues Rs 3178.87 crores in 2016-17, of which Rs 1561.74 crores were from exports. About one-fifth of the companies revenues come from the US and South American market. Following the announcement, IPCA's shares fell to its one year low on today's trading to close at Rs 471.7 per share, losing over 8 per cent.
After the ban on Ranbaxy's (which merged with Sun Pharma) three manufacturing facilities at different stages a few years ago, this is the first time the US drug regulator has resorted to banning imports of all drugs manufactured by an Indian company. Company's like Sun Pharma and Aurobindo are also facing compliance issues with the US FDA.
In February 2016, USFDA had issued a warning letter to all three manufacturing units situated at Ratlam, SEZ Indore and Piparia. In April, last year, the Switzerland-based Global Fund, which financially supports various disease eradication programmes, had decided not to source malaria drug from the company after the FDA warning letter.