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Has the ghost of Paonta Sahib been laid to rest by drug-maker Ranbaxy, after it agreed to pay $500 million to resolve fraud and criminal charges against it in the US?
Or does the giant step for Ranbaxy, in fact, legitimise quality concerns raised in some export quarters against Indian generic drug makers?
After all, the allegations made by former Ranbaxy employee and whistle-blower in this case, Dinesh Thakur, range from falsifying drug data to indulging in systemic manufacturing violations. Thakur stands to get $48 million, on settlement of this case.
Ranbaxy's Paonta Sahib (in Himachal Pradesh) and Dewas (in Madhya Pradesh) facilities sit at the heart of the company’s regulatory woes in the US, after concerns were raised in 2006. Ranbaxy has since changed hands, after its promoters sold their stake to Japanese drug-maker Daiichi Sankyo for over $4 billion in 2008.
Ranbaxy’s latest settlement is the largest payment by a generic drug-maker in these circumstances, say overseas media reports quoting legal authorities.
Who is Thakur?
The whistle-blower Thakur was then Ranbaxy’s Director and Global Head, Research Information and Portfolio Management.
In his statement after Ranbaxy agreed to settle, he said, “Eight years ago, as the Director of Project & Information Management at Ranbaxy, I discovered that the company falsified drug data and systemically violated good manufacturing practices and laboratory practices. Ranbaxy's management was notified of these widespread problems. When they failed to correct the problems, it left me with no choice but to alert healthcare authorities.”
Further, he adds, “It took us eight years to help government authorities unravel a complicated trail of falsified records and dangerous manufacturing practices that threatened to compromise the quality and safety of Ranbaxy drugs.”
Outlining the challenges in a global market, dependent on international manufacturing and distribution, Thakur says, “approximately 78 per cent of prescription drugs dispensed in the United States are generic, and a growing percentage of drugs – both generic and name brand – is manufactured overseas. This case highlights the need for effective regulation that applies to drugs sold in the United States, regardless where they are manufactured.”
It is a wake-up call for Indian drug-makers, agrees Amit Chander, Partner with Baring India, especially for the next-rung of Indian companies looking to sell in the US market. But it does not taint all Indian generic drug makers, he adds, since there are multinational companies too, who make large settlements with the drug regulator.
While Ranbaxy says it is meeting its obligations with the US regulator, there is no timeframe on when it would start exporting from these two plants to the US. And since there are no patient complaints on the drugs, class action suits may be at bay, for the moment, say lawyers.
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