Caraco announces plans to reduce workforce

DETROIT After ceasing operations at several of its Michigan plants, generic drug maker Caraco Pharmaceutical Labs plans to reduce its workforce.

The Detroit-based pharmaceutical company announced Monday that it would lay off 350 workers in order to save money after voluntarily stopping manufacturing at its plants in Michigan. The company said the layoffs would not affect products distributed in the United States.

U.S. Marshals seized drugs manufactured at Caraco’s Michigan plants on June 25 at the request of the Food and Drug Administration after the company allegedly failed to resolve violations of the FDA’s current Good Manufacturing Practice requirements, which the agency had found during a previous inspection. Caraco said at the time that it expected the cessation of operations to have a “material adverse effect” on the company in the near term.

Caraco also said JPMorgan Chase Bank had forbidden it from drawing on a $10 million line of credit until it resolves the dispute with the FDA, though this would not affect its current financial position.