Further, an amount of Rs 170 million is recognised as a possible refund liability (as a reduction from revenue) arising out of the company's decision to recall the said product," Dr Reddy's said in a regulatory filing.
Dr Reddy's CEO Erez Israeli in a recent investor call said the company's North America generics recorded sales of $202 million for the quarter and declined by 1 per cent year-over-year and 14 per cent on a sequential quarter basis.
The sequential decline was primarily driven by certain issues impacting the quarter such as provisions related to nationwide recall of Ranitidine product due to NDMA impurities limits following FDA's caution note regarding the same, he said.
"We now have completely suspended the sales of Ranitidine OTC and Rx product (prescription). And, logistics-related challenges leading to temporary disruption in supply, which has been addressed since. We expect the sales run rate to normalise from Q3 onwards," the official said.
NDMA is classified as a probable human carcinogen (a substance that could cause cancer) based on results from laboratory tests.
NDMA is a known environmental contaminant and found in water and foods, including meats, dairy products and vegetables.