Ranbaxy in hot water with US FDA

Posted by: Frederik Balfour on July 15, 2008

Here is a blog from my colleague Nandini Lakshman in India:
Talk about unfortunate timing. Barely a month after Ranbaxy Laboratories, India’s largest drug maker, entered into a landmark deal to sell out to Japan’s pharmaceutical major Daiichi Sankyo, it now has the U.S. Food and Drug Administration out for blood over Ranbaxy’s alleged concealment and forgery of crucial data to swing an FDA judgment in its favor. To make matters worse, there are also now allegations of selling substandard HIV drugs to AIDS patients in Africa.

Not surprisingly, the company’s shares tanked 10% on Monday, and fell another 14% on Tuesday.

In 2007, it took on Drug giant Pfizer in 17 countries, when it filed for the right to make generic versions of the world’s best selling cholesterol drug Lipitor and later a combination drug Caudet. Pfizer contested the move. In June 2008, the two companies finally settled the dispute, Pfizer allowing Ranbaxy to sell a generic version of Lipitor from Nov 2011.


Whatever the outcome of Ranbaxy’s current controversy, there is tremendous pressure on the company’s deal with Daiichi. Both the companies have pledged to carry the deal through. But my bet is Daiichi’s board must be putting the company’s execs through some pretty rough grilling at the moment. For my colleague Bruce Einhorn’s take on the deal when it was announced, click here.

The company has also struggled with its new drug discovery program and has abandoned plans of hiving off the business. For more on the challenges facing Indian drug makers, please have a look at Nandini Lakshman’s story here.

Reader Comments

Ajit De

July 21, 2008 2:24 PM

The Ranbaxy clampdown has definitely been initiated by competitors, who don't know how to handle this big generics player from India.

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