Amid ongoing quality control problems at its manufacturing facilities, Ranbaxy Laboratories will close one of its biggest global bulk drug production units in Mohali, India, and is now relying on local contractors to supply the products that have been made there, The Economic Times reports.

The move appears to contradict recent statements about outsourcing. Ranbaxy, which is owned by Daiichi Sankyo, has been looking to outsource some manufacturing, but planned to restrict this to small markets. In its latest annual report, the paper notes, the drugmaker indicated it will look to outsource either products or manufacturing capacities, but only in countries outside its top 20 markets. India, of course, is one of its top markets.

So why is this happening? For one, the US Pharmacopeia is upgrading heavy metal standards for pharma manufacturing (see here), which doesn’t come cheap, and by shutting down a facility, Ranbaxy can save money. This also occurs after the FDA banned 30 Ranbaxy drugs and halted approval of new drugs made at two plants in Dewas and Paonta Sahib (see this and this), causing an embarassment for Daiichi, which noted in its latest financial report that anticipated synergies with Ranbaxy may not be achieved if the regulatory problems are not resolved.

To cope, Daiichi recently shook up management (background here). Of course, time is of the essence, because Ranbaxy needs to capitalize on their agreement to sell the first generic Lipitor in the US (see this). There’s no indication Ranbaxy will outsource production of a generic Lipitor, but shifting, not just improving manufacturing, may increase the odds that the drugmaker can tap the US market.