Ranbaxy’s stock slipped this week after the firm revealed it would be putting $500 million aside to cover any criminal and civil liabilities arising from an investigation by the US Department of Justice into manufacturing violations at a plant in Northern India.
The agreement commits the firm to ramping up its procedures and policies to ensure data integrity and compliance with good manufacturing practice. In 2009, the US Food and Drug Administration said Ranbaxy had falsified data and test results in regulatory applications, and banned the import of many of the firm’s generics. Signing up to this voluntary consent decree, which needs to be approved in court, will potentially allow the firm to resume sales in the USA. Ranbaxy is majority owned by Japan’s Daiichi Sankyo, which has halved its annual net profit forecast as a result of the settlement.
