* Says suspension due to review processes, controls
* Sources say suspension to affect supplies to Europe, India
* India regulator inspected Toansa facility two weeks ago
(Adds comments from drug regulator and analyst, details of the
By Zeba Siddiqui and Sumeet Chatterjee
MUMBAI, Feb 25 India's Ranbaxy Laboratories Ltd
, hit by a rash of sanctions by the U.S. regulator, has
suspended shipments of pharmaceutical ingredients from two
plants amid growing scrutiny of its manufacturing processes by
The suspension at the Toansa and Dewas plants, already
banned by the U.S. Food and Drug Administration (FDA) from
shipping products to the United States, Ranbaxy's biggest
market, will hit supplies to other key markets such as Europe
and India, two people with direct knowledge of the matter said.
Worries about quality control in India's $14 billion drug
industry have come to the fore in the past year as plants run by
Ranbaxy and local rival Wockhardt Ltd have been barred
from sending drugs to the United States after falling short of
the FDA's "good manufacturing practices".
Margaret Hamburg, the head of the agency, last week
completed a 10-day visit to India, which supplies about 40
percent of the generic and over-the-counter drugs consumed in
the United States, urging heightened cooperation between Indian
and global regulators.
Indian drug regulators inspected Ranbaxy's Toansa facility
two weeks ago, Ajay Singla, assistant drug controller of
northern Punjab state, where the facility is located, told
Reuters on Tuesday. He said he has yet to receive a report on
Regulators from other countries including India, Ranbaxy's
second-biggest market, have sought clarification on last month's
export ban at Toansa by the FDA, Ranbaxy said earlier this
Ranbaxy said in a statement on Tuesday that it was
"examining processes and controls" at all its active
pharmaceutical ingredients (API) manufacturing units.
"This voluntary decision was taken as a precautionary
measure and out of abundant caution to better allow the company
to assess and review the processes and controls," it said.
It did not give details about the impact of the move. The
sources declined to be named due to sensitivity of the issue.
Without production at the Toansa and Dewas plants, Ranbaxy
will be unable to make pharmaceutical ingredients in-house and
will have to rely on sourcing from other companies for making
generic drugs, which could push up costs, analysts said.
"If they don't supply even captively, which means they will
have to buy from outside, that will impact their margins," said
Surajit Pal, an analyst at brokerage Prabhudas Lilladher.
Shares in Ranbaxy fell as much as 2.7 percent in the early
trading, but recovered later and were trading up nearly 1
percent at 0942 GMT. The stock is down 20 percent since
mid-September when its third plant was hit by the FDA import
STRING OF BANS
Last month, the FDA prohibited Ranbaxy from shipping to its
biggest market any pharmaceutical ingredient made at its Toansa
The ban, which followed similar actions at two plants in
2008 including Dewas and another in September 2013, means
Ranbaxy, controlled by Japan's Daiichi Sankyo Co Ltd,
can no longer export to the United States from India.
Ranbaxy, which makes ingredients at the plants for drugs
used in oncology, dermatology, gastrointestinal and
cardiovascular disorders, generated 36 percent of its sales in
the United States in the quarter ending in December.
India accounted for about 20 percent its sales in
October-December and Europe and the Commonwealth of Independent
States' contribution was 16 percent.
Ranbaxy also said on Tuesday it had set up a committee to
provide oversight on manufacturing and quality operations,
systems, organisation and integrity.
(Editing by Christopher Cushing, Tony Munroe and Matt Driskill)