The US Food & Drug Administration (FDA) has delivered a double blow to Ranbaxy and the Indian pharmaceutical industry by banning the import of 30 drugs manufactured at Ranbaxy?s plants in Paonta Sahib and Dewas. The ban, imposed after the detection of certain procedural problems in the manufacturing process, will once again raise question marks about the quality of drugs being produced by Indian manufacturers. There will be reluctance on the part of US consumers and doctors to use Indian manufactured drugs even though the FDA has vouched for the safety of the final product. Estimates suggest that in addition to sharp erosion in its stocks, Ranbaxy may lose sales worth around Rs 300 crore, but it has the option of moving the manufacture of these drugs to its other plants, including to those outside India. Also, no first-to-file drugs were manufactured in these two units.
Still, the FDA ban does bring to focus the issue of best practices in Indian pharma. Survival and success in the pharma industry depends on maintaining the most stringent standards?hence the need for Indian firms to meet FDA standards rather than Indian standards, which are not as stringent. From a regulatory policy point of view, there is need to beef up the drugs quality regulator?the Drugs Controller General of India (DCGI). The government has already initiated co-operation with the FDA on new drugs, medical devices, clinical trials, pharmacology and IT. The FDA will also train Indian inspectors. And it?s also working with DCGI to upgrade Indian rules to best global standards. If and when implemented, this may prevent any international embarrassment to Indian pharma?domestic regulators should be able to ensure standards. Ranbaxy should ensure that the factories under a cloud immediately comply with the necessary standards?there can be no compromise on this in a sensitive industry like pharma. Of course, Ranbaxy may have a point in asking why it alone is being singled out?many other Indian firms export drugs to the US and have not faced similar FDA scrutiny. If the US action has anything to do with protectionism by stealth (after Ranbaxy?s post-merger strength), then it must be condemned. On the other hand, if all standards are being met, there will be no ground for action. That?s what Indian pharma needs to aim for.