The US Food and Drug Administration (FDA) on Thursday seized 33 drugs manufactured by a subsidiary of Indian pharma major Sun Pharmaceuticals at the company's Michigan facilities in Detroit, Farmington Hills, and Wixom.
As news of the raid broke, the Sun Pharma stock plunged 17.59 percent on the Bombay Stock Exchange Friday to Rs1, 070 soon after opening bell.
The company's subsidiary Caraco Pharmaceutical Laboratories, in which the Indian company holds about 75 percent, was raided owing to its "continued failure to meet the FDA's current Good Manufacturing Practice (cGMP) requirements," the US authorities said.
"The FDA is committed to taking enforcement action against firms that do not manufacture drugs in accordance with our good manufacturing practice requirements," said Janet Woodcock, FDA's director of Center for Drug Evaluation and Research.
"Compliance with these standards prevents harm to the public."
This is not the first time the company has come under the regulator's scanner. Last October, the FDA had conducted inspection of its facilities and found "significant deviations from Current Good Manufacturing Practice (CGMP) regulations".
Caraco's drugs were found to be contaminated, even after the company had conducted an internal investigation to determine the cause and taken corrective measures.
Since January, Caraco had initiated voluntary recalls of products to protect the public from potentially defective medications. The recalls followed manufacturing defects, including oversized tablets and possible formulation error.
But the FDA found these measures inadequate. "FDA's most recent inspection of Caraco, completed in May 2009, found unresolved violations of CGMP requirements," an FDA statement read.
Sun Pharma is the second Indian company this year to have faced FDA's wrath. In February, the US drug watchdog had taken regulatory action against Ranbaxy's Paonta Sahib facility in Himachal Pradesh on the ground it had falsified test results.