Written By: Nirmalya Dutta | Updated : May 22, 2013 10:15 AM IST
Indian pharma has taken a big hit with the Ranbaxy episode raising questions about the efficacy and safety of the billion dollar industry. Indian generic drugs are quite popular in the US and other parts of the world but they may find it hard to secure new contracts. The recent incident saw an ex-Ranbaxy employee claiming that the company falsified data and annual reports submitted to the USFDA.
The company also pleaded guilty to the criminal charges of manufacturing and distributing certain adulterated drugs manufactured at its two Indian facilities and the company agreed to pay a staggering $500 million dollars to resolve false claim allegations. Experts are unanimous that these events will give Indian pharma a bad name and other companies may have to bear the brunt of Ranbaxy s follies. Incidentally, Ranbaxy is no longer an Indian company and is now owned by Japan s Diiachi Sankyo.
Hemant Bakhru, an analyst from a brokerage firm told the Economic Times, Indian companies have been under tight scrutiny since the Ranbaxy scandal broke out in 2008. We have seen that the number of inspections by USFDA has substantially gone up, and there have also been surprise visits by them; so Indian companies have been tightening their norms since then.
The US generic market is estimated to be $90 billion out of which India s share would be somewhere around 6% or $5.4 billion dollars. DG Shah, the Sec General of the Indian Pharmaceutical Association said, Ranbaxy s mistake was that it deliberately hid the fact, this is a lesson that Indian industry must learn. It must avoid this temptation of covering up wrong doing Though warning letters and settlements are not uncommon, what s worrying is that Ranbaxy s follies will tarnish India s image as a safe drug manufacturing country.
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