Ranbaxy: Cutting Corners or Falsely Accused?

While the U.S. has the world's most expensive prescription drugs, we have the world's cheapest generics: once that patent goes away, it goes away. But the generic drug business is still very profitable, and it's viciously competitive. One of the biggest players is India's Ranbaxy (RBXZF.PK), now in the process of being acquired by Japan's Daiichi Sankyo (DSKYF.PK). They compete hard at every step of the process, from fighting patent cases in order to make drugs go generic more quickly, right down to price and distribution to pharmacies.

But it looks like they've been pushing it a bit too hard. The FDA has banned the import of thirty Ranbaxy-made drug substances after uncovering what they say are bad practices at three of the company's plants in India. And this comes on top of another investigation, an even more serious one, looking into whether the company out-and-out falsified data during the drug approval process.

The company seems to be co-operating with the first investigation, but they're fighting back hard on the second one - which makes sense, because that's the one that can really get them in trouble. Ranbaxy, for its part, seems to have suggested that some big-pharma rivals are behind the accusation. I doubt that myself, although it's not impossible - but neither is it impossible that the charges have something behind them. U.S. companies have found themselves in big trouble over such issues, too.

Overall, what Ranbaxy and the other Indian drugmakers have to fear is ending up in the same public opinion category as the Chinese companies, who have had one quality scandal after another. It's going to be a long time before they lose their bad reputation, and the Indian firms definitely don't need to throw away what they've built up. Look for Ranbaxy to try to clear its name as fast and as publicly as possible.

Comments

[andyn:]

You are right, looks like something is fishy here. All these things came out AFTER Daichii's offer. hmmmm have to wonder

2008 Sep 18 09:26 AM