A Bitter Pill for Ranbaxy? Ranbaxy Laboratories Ltd.

was one of the largest generic pharmaceutical company in India by sales and a top 10 generic company globally. Ranbaxy also reached settlements with the makers of the world's two largest selling drugs - Lipitor and Nexium. This decision allowed for an earlier introduction of a generic formulation in several countries. Ranbaxy also brought out novel drug-delivery systems and was the first Indian company to license a product in this field to Bayer.Ranbaxy got the U.S. legal monopoly on making the generic version of Lipitor, the world's biggest drug. It also made a host of others, such as amoxicillin, the traditional antibiotic given to babies with earaches. A clich in this monopoly is the beginning of the controversy in 2006, when the US FDA issued a warning letter to Ranbaxy for deviations from standard GMP at its Paonta Sahib manufacturing plant in India's Northern state, Himachal Pradesh. subsequently, in 2008, FDA officials halted the US importation of 30 drugs that were produced at two of Ranbaxy's manufacturing units. The story took an interesting turn when whistle blower Mr Dinesh Thakur also former employee of Ranbaxy, alerted the US authorities about the forgery and adulteration taking place within the firm. All of this just when a majority stake in the company was acquired by Japanese Pharma Daiichi Sankyo Company, the third largest pharmaceutical company in Japan. The US Department of Justice (DOJ) placed Ranbaxy under a consent decree in 2012, prohibiting the company from selling drugs manufactured at some of its Indian plants in the US, until their quality could be verified. Ranbaxy was later forced to withdraw its anti-cholesterol drug from the American market after some batches were found to be contaminated with glass powder. Ranbaxy later pleaded guilty to seven federal criminal counts of selling adulterated drugs with intent to defraud, failing to report that its drugs didn't meet specifications, and making intentionally false statements to the government. Ranbaxy agreed to pay $500 million in fines, forfeitures, and penalties -- the most ever levied against a generic-drug company If the charges of the whistle-blower, Dinesh Thakur, are to be believed, Ranbaxy is guilty of not just failing to follow good manufacturing practices as prescribed by the FDA but of outright fraud. The companys actions are a breach of the sacred trust that patients, whether foreign or Indian, place in it when they buy its drugs. The company deserves to be penalised more severely; at its harshest it could even include blacklisting of its drugs pending investigation. The Ranbaxy fraud throws two vital questions to be answered.

First, about the quality and efficacy of drugs produced not just by that company but by the entire pharmaceuticals industry in India. Second, about the consequences for Indias fast-growing generic drugs export industry in which India gained popularity for cost effective, high quality drugs, today exports generics worth over $300 million in over 200 key markets in the US, Europe, Asia and Africa.