The US health regulator has seized all drugs manufactured by Caraco, in which India's Sun Pharmaceuticals holds a majority stake, at its Michigan facilities following repeated violations of manufacturing standards.
The US Food and Drug Administration has seized drug products manufactured by Caraco Pharmaceutical, at the company's Michigan facilities in Detroit, Farmington Hills, and Wixom, the US FDA said on Thursday.
"This action follows Caraco's continued failure to meet the FDA's current good manufacturing practice requirements, which assure the quality of manufactured drugs.
"Through this seizure, the FDA seeks to immediately stop the firm from further distributing drugs until there is assurance that the firm complies with good manufacturing requirements," the statement said.
The FDA seeks to immediately stop Caraco from further distributing drugs until there is assurance that the firm complies with good manufacturing requirements, it added.
Following the seizure of the drugs by the regulator, shares of Caraco plunged 43 per cent at $2.39 on the American Stock Exchange on Thursday.
Caraco in a separate statement said that corrective actions have been made and continual improvements are in the process.
Caraco said: "The FDA has only seized products manufactured in its Michigan facilities. Products distributed by Caraco that are manufactured outside these facilities are not impacted."
In 1997, Sun Pharma acquired a majority stake in Caraco and subsequently, the two companies entered into a technology transfer agreement.
"The FDA's most recent inspection of Caraco, completed in May 2009, found unresolved violations of current GMP requirements. Today's seizure is intended to lead to major changes at Caraco's facilities," the US FDA noted.
Since January 2009, Caraco has initiated voluntary recalls of drug products to protect the public from potentially defective medications.
The recalls involved oversized tablets and possible formulation error, the FDA statement said.
"The FDA will continue to take swift, aggressive enforcement action when firms are identified as being in violation of our manufacturing requirements," FDA acting associate commissioner for regulatory affairs Michael Chappell said.