Ranbaxy has been on a rollercoaster ride over the last decade. The drug-maker’s troubles, which began in 2004, when evidence of its fabrication of drug test reports began to emerge, have not ended.
The company’s position in its second largest market, the US, has been severely compromised following a spate of regulatory actions by the US Food and Drug Administration (FDA), which began soon after former employees Dinesh Thakur and Rajinder Kumar blew the whistle on its unethical actions.
Scrutiny and action against the company continue till date and all of its Indian plants are now prohibited from manufacturing for the US market.
The unending saga of regulatory scrutiny, bans and legal suits resulted in the company’s share price losing almost half its value since Japan’s Daiichi Sankyo took over in 2008. As compared to the then share valuation of ₹737 a share, Ranbaxy’s acquisition by Sun Pharma today is valued at ₹457 a share.
In September 2008, just weeks before the $4.6-billion Daiichi-Ranbaxy deal was completed, the US FDA had sent two warning letters and issued an import alert for drugs from two facilities, Dewas (Madhya Pradesh) and Paonta Sahib (Himachal Pradesh) .
Just months later, in February 2009, falsified data and test results in approved and pending applications resulted in another action against the Paonta Sahib plant — the FDA stopped reviewing drug applications from this plant.
Adding to Ranbaxy’s woes, its wholly-owned US subsidiary, Ohm Laboratories, also received a warning letter from the regulator that December.
In January 2012, the US Justice Department filed a consent decree to resolve quality concerns over Ranbaxy’s drugs and other regulatory issues.
This culminated in Ranbaxy pleading guilty on seven federal criminal charges, besides entering into a $500-million settlement in May 2013.
But this was not the end of the company’s troubles. The FDA further issued an import alert against the drug major’s Mohali plant (Punjab) in September 2013.
And finally, in January this year, the FDA imposed an import ban on the company’s Toansa plant (Punjab) in January this year. This, effectively, banned all of Ranbaxy’s Indian plants from manufacturing for the US market.