US decree puts India’s Ranbaxy on the ropes
NEW DELHI - Agence France-Presse
A staff member checks batch numbers of medicines produced by Ranbaxy, the disputed Indian generic drugs giant, at a shop in Mumbai in this file photo. AFP photoIndian drugs giant Ranbaxy faces a tough road ahead after U.S. authorities imposed stiff conditions to settle a long legal battle over manufacturing safety violations at its plants, analysts say.
Ranbaxy shares hit a 10-month low on Jan. 27 after the U.S. Justice Department filed a so-called consent decree in court requiring “fundamental changes” to the firm’s operations, calling it “groundbreaking in its international reach”.
U.S. prosecutors accused the company of making “adulterated, potentially unsafe” drugs for its crucial U.S. market.
The decree requires Ranbaxy to stop selling drugs to American consumers made at three of its Indian plants and one U.S. factory until it cleans up its act.
The agreement provides for “very stringent and punitive measures,” Bino Pathiparampil, vice president of Mumbai’s IIFL Capital, told CNBC. “They will have a long period struggling before they come out of the woods.”
New Delhi-based Ranbaxy, which has factories in seven countries and made the first generic version of top-selling cholesterol buster Lipitor, has grown by selling cheap copies of branded drugs that have gone off-patent, and through challenges to patents owned by Western companies.
But U.S. authorities allege the firm took short cuts along the way, falsifying data, failing to prevent contamination of medicines, keeping inadequate records and not making sure drugs remained potent until their expiry.
Ranbaxy neither accepted nor denied the allegations in the consent decree, which was agreed by the two sides in late December, but the details were only made public last week when it was filed in a U.S. state court.