Written By: Nirmalya Dutta | Updated : June 10, 2013 10:06 AM IST
Indian drug giants Ranbaxy Laboratories is facing an existential conundrum with Japanese owners Daiichi Sankyo, thinking of rechristening the company, perhaps in the hope that a name change will give them a blank slate to work with and erase out the mistakes of the past. But would it be a wise move? Ranbaxy Laboratories, despite the recent incidents, remains one of nation s biggest pharmaceutical companies and is viewed across the world as a torchbearer of Indian generic companies which are celebrated not only in the developed world which wants to decrease the risking of cost of their capitalistic healthcare system but in the developing nations as well which for long couldn t afford drugs until Indian pharmaceuticals came in the picture. Let us not forget that it was Ranbaxy s global standing and pharma might that made the Japanese owners Daiichi Sankyo to shell out a staggering $2.4 billion to buy a 34.8% stake and then a further $4.6 billion to acquire a total majority of 63.92%.
Experts believe a name change is not unwarranted unless there s compelling evidence that situation is beyond repair. Ranbaxy is after all not the first pharma company to be caught with their hand in the cookie jar. Global giants like Johnson and Johnson, Pfizer and Merck have all paid penalties, learned from their mistakes and moved on.
Experts believe that any name-changes should have been carried out when Daiichi Sankyo bought the company in 2008. Most global pharma companies actually keep the name of their generic divisions separate. For example Novartis generic division is called Sandoz. Daiichi too decided to keep the identity of the acquired drug company s name separate from its own. Changing the name also would be a big mistake considering how well-known the brand is in India.
Two Ranbaxy Laboratories manufacturing facilities under scanner
The DCGI has ordered the inspection of manufacturing facilities Dewas in Madhya Pradesh and Paonta Sahib in Himachal Pradesh making this the formal action by government after the drug maker pleaded guilty in the US. A team including senior officials of the rank of deputy drug controller and assistant drug controller would leave on Monday to inspect the facilities at Dewas and Paonta Sahib to check if the company follows good manufacturing practices under domestic law, said an official. Ranbaxy pleaded guilty to seven criminal and civil charges related to drug safety, fudging data and manufacturing adulterated drugs.
The Ranbaxy story till now
The Ranbaxy episode started in September 2008 when the USFDA issued two Warning Letters to Ranbaxy Laboratories and import alert for generic drugs produced at two different plants. However, in June 2008, Daiichi Sankyo, a major Japanese company had procured a majority in Ranbaxy in a deal believed to be worth $4.6 billion dollar. A fortnight ago, Ranbaxy offered to pay a $500 million fine for selling adulterated drugs and pleaded guilty to seven criminal counts including fudging of data, intention to defraud and failing to report that its drug didn t meet specifications. Since then a lot of dirty linen has been washed in public with the Japanese company accusing the Singh brothers the former owners of Ranbaxy of concealing and misrepresenting critical information regarding the USFDA investigations. Malvinder Singh, the former Chairman however eschewed all guilt and claimed the Japanese company had mismanaged the company. He said, There was no misleading Daiichi approached us when they came, US FDA investigations were on. They knew about it and it was public information. So there was nothing that was hidden. Whatever they wanted and asked for was shown to them. They did a due diligence. Who would risk $5 billion without a due diligence?
Meanwhile the Drug Controller General of India (DCGI) Dr GN Singh said that all the approvals given to Indian drugs manufactured by Ranbaxy Laboratories were in order. As per the laws, there was no indication of any company violating the Indian laws, including Ranbaxy. However, Dr Singh admitted that all matters including approvals in the past would be examined again. Dr Singh added that appropriate action would be taken and a special team would be set up to examine the case. They would send officials to the US if the situation demands it. My most important concern is to assure the safety and efficacy of the drugs in India and action will be taken as per the Drugs and Cosmetics (D&C) Act, not just against Ranbaxy but other companies also if found guilty, Dr Singh told Pharmabiz.
Recently, Jaslok Hospital became the first one to ban Ranbaxy drugs and Apollo Pharmacy the country s biggest drug retail network alsosuspended the sales and procurement of Ranbaxy drugs until further investigations. Meanwhile the Indian Medical Association asked the Drugs Controller General of India (DCGI) to investigate the quality of drugs sold by Ranbaxy Laboratories in India.
The Ranbaxy issue evoked a strong response from the government which said that the country has proven international quality standard capabilities . India enjoys a unique position of low-cost manufacturing and the highest quality medicine, the best of both the worlds , the statement added. It invited global importers to visit factories to satisfy themselves of the quality of production of drugs . There s a school of thought which believes that all the complaints about generic medicines originate from Big Pharma with big brands unhappy with the growing use of cheap generics, as developed nations fight to lower healthcare costs. Also read: India vs Big Pharma.
