Dose of bitter pills, few booster injections for pharma sector in 2013

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SummaryDomestic firms coming under increased scrutiny of global regulators, resulting in Ranbaxy paying a record USD 500 million fine, and drugs becoming cheaper in India thanks to a new pricing policy marked a roller-coaster year 2013 for the pharma industry.

Domestic firms coming under increased scrutiny of global regulators, resulting in Ranbaxy paying a record USD 500 million fine, and drugs becoming cheaper in India thanks to a new pricing policy marked a roller-coaster year 2013 for the pharma industry.

The Indian pharma sector, estimated to be around Rs 1.5 lakh crore, recorded single digit growth for the first time in several years on account of deeper price cuts under pricing policy and selective boycott of companies by the retailers.

For the multinationals, it was a year to raise concerns over India's patent regime as Novartis' patent for cancer drug Glivec was rejected by Supreme Court, while patent for GSK Pharma's popular breast cancer drug, Tykerb was shot down by the Intellectual Property Appellate Board (IPAB).

It was also a year when the government decided not to lower FDI in existing pharma companies to 49 per cent despite concerns from many quarters over the increased takeovers of Indian firms by foreign companies.

Interestingly, the other highlight of the year was the overseas acquisitions made by domestic firms such as Dr Reddy's and Cipla.

In a big blow to domestic drug makers, including Ranbaxy Laboratories and Mumbai-based Wockhardt, the US health regulator (USFDA) continued its strict vigil over manufacturing standards, resulting into warning letters and ban of imports of drugs from their facilities.

The year will be remembered for Ranbaxy Laboratories' agreement to pay USD 500 million (around Rs 3,092 crore at current exchange rate) to US authorities after pleading guilty to felony charges over violation of manufacturing norms at its plants in Dewas in Madhya Pradesh and Paonta Sahib in Himachal Pradesh.

This was the culmination of a case that began in 2008 when the USFDA had banned the import of 30 generic drugs manufactured by the company at the two plants.

The trouble for the Gurgaon-based firm didn't end there though, as its third plant at Mohali was put under import alert by the USFDA in September which banned import of drugs manufactured there.

Ranbaxy was also in the news for another wrong reason as it was among nine firms which were imposed a total fine of 146 million euros by the European Commission for delaying market entry of cheaper generic versions of Danish company Lundbeck's branded citalopram, a blockbuster antidepressant.

Another domestic major, Wockhardt also had a rough time in 2013 dealing with regulatory and compliance issues. The company's manufacturing facilities at Waluj was pulled up by USFDA

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