Sun Pharma's U.S. Sales Hit as FDA Seizes Drugs Manufactured by Caraco

FDA Moves to Strike at Sun Pharma

U.S. Marshals, at the request of the U.S. FDA, have seized all products manufactured by Sun Pharma's U.S. subsidiary, Caraco Pharma's facilities in Detroit, Farmington Hills, and Wixom. According to the FDA, these include both active pharmaceutical ingredients and formulations at the indicated facilities. The FDA directive has come after the latest inspection in May 2009, revealing that the Caraco facilities have continued to fall short of the regulators' current Good Manufacturing Practices (CGMP) guidelines. The action is being taken to rein in the repeated quality problems the FDA has encountered with the firm's manufacturing facilities.

The FDA has also issued a directive to Caraco to immediately stop distribution of all drugs manufactured in these facilities. The seizure will affect several or all of the 33 formulations manufactured by the firm, and may affect sales from key drugs inclusive of generic Norvasc (amlodipine), Coreg (carvedilol), and Ambien (zolpidem). The development is set lead to a short-term "spot"/local shortage of gastric drug choline magnesium salicylate oral tablets, until other manufacturers ship their drugs into the U.S. market.

While the FDA has directed physicians to switch to alternate sources for all the affected drugs and has assured customers that if Caraco drugs do pose a threat of patient safety, further regulatory action would be pursued.

The FDA letter on its Caraco drug seizures can be viewed here.

Outlook and Implications

The move does not bode well for Sun Pharma's image in the United States, and is expected to dampen Sun Pharma's sales. Getting the FDA distribution embargo lifted will be one of Sun Pharma's priorities. However, it should be noted that the firm has other FDA-approved facilities in the United States and India, and drugs from these facilities will continue to be sold on the market. These include its most recent approvals, including injectables such as generic Sinemet (carbidopa plus levidopa), Camptosar (irinotecan hydrochloride), Toradol (ketorolac tromethamine), Lupron (leuprolide acetate) and Norcuron (vecuronium bromide). Caraco accounted for only 0.8% of Sun Pharma's total topline in fiscal year 2008-09.

The FDA action has been building for some time after the regulator first issued a warning letter citing CGMP violations, including cross-contamination of drugs in the Detroit facility, in October 2008. While the firm said it was moving to address these issues within the next 15 days, its Form 8-K filing with the Securities and Exchange Commission (SEC) listed in November revealed that the FDA issues with its facility were still pending. Furthermore, in April 2009, Caraco was among the few generic firms—with Mylan (U.S.) and Actavis (Iceland)—to recall its digoxin tablets in 0.125-mg and 0.25-mg tablet dosage forms, due to varying tablet size. According to the FDA, this recall has also been one of the reasons for its action against the firm (see India - United States: 13 April 2009: Sun Pharma Subsidiary Recalls Digoxin in U.S. Due to Varying Tablet Sizes).

The development underpins the FDA's increased vigilance on quality, efficacy, and adverse-effect reporting by generic firms. This has seen an increase in warning letters being issued to generic drug firms, with Actavis forced to close down its manufacturing facility in Little Falls, New Jersey, while bans have been placed on over 30 drugs from two key Ranbaxy facilities in India, while firms including Cipla (India), Lupin (India), Taro (Israel), and Pliva (Croatia, subsidiary of Israeli firm Teva) all received warning letters in late-2008 and 2009. The FDA's action on Caraco will see firms that have received warning letters take its implications a lot more seriously than before.