FDA raids on Ranbaxy, Is Indian Pharma vulnerable outside??

The raids on ranbaxy have understandably led to a debate on the vulnerability of Indian companies in the so called developed world. I came across this beautiful article by Joe C Mathew in Business standard. “Is Indian Pharma vulnerable in US?” He has highlighted the perils faced by Indian drug makers in pursuit of their global dreams not just in developed nations also in developing and under-developed countries.

Mr. Mathew gives some statistics to prove his point.

The accusations they have faced in the last few years range from infringement of patents to outright theft and overcharging on prices. In the process, Indian companies have incurred huge legal expenses. Ranbaxy alone has paid $55 million to its attorneys in the last two years

The collective fight by the companies in US and UK to keep Indian companies at bay is evident by the fact that they have gone to a level of alleging theft, overpricing etc.

And the battle is being fought at various fronts. In 2002, GlaxoSimithKline had initiated legal action against Ranbaxy and Israel's Teva Pharmaceuticals on their generic versions of the augmentin alleging that they used stolen bacteria to manufacture the product.

Ranbaxy had also faced an inquiry in the UK in 2005, after which it was fined $8.8 million by National Health Service in UK as it felt the company had overpriced generic medicines

Now the interesting point is to note how the Indian companies are affected in other developing countries for altogether different reasons.

If there is too much scrutiny in developed countries like the US or UK, it is
lack of clarity in business rules and alleged favouritism towards domestic firms is the problem faced by several companies that set up manufacturing facilities in places like China. Drug major Aurobindo is a recent example of Indian companies winding up their Chinese operations.

In the developing world, especially African countries, it is either the lack of regulation or inadequate rules that hurt the most

In spite all these hurdles Indian Pharma continues to thrive with acquisitions and offering affordable health care. Surprisingly they are also investing in R&D to get a healthy pipeline. This may prove beneficial when most of the global companies’ pipelines are getting dry.