The US advocacy groups objection is that even after two Ranbaxy plants failed to meet US Food & Drug Administration standards last year, Wal-Mart is still importing and retailing Ranbaxy drugs.
Considering the kind of power consumer advocacy lobbies wield in the US, there are chances that Ranbaxys arrangements with other major US retailers such as Walgreens Co, CVS Inc, The Kroger Co and Rite Aid Corp could also come under pressure.
However, on the face of it, there is nothing illegal about Wal-Mart importing drugs from Ranbaxy as long as the products imported are not manufactured in the two FDA-banned facilities at Paonta Sahib in Himachal Pradesh and Dewas in Madhya Pradesh. Last year, FDA had banned around 30 specific products manufactured by the Indian pharma company at these two locations for falsification of data in applications. However, it had not imposed any blanket ban on the companys products, which made other Ranbaxy products eligible to enter the US and be consumed.
A Ranbaxy spokesperson refused to comment on the issue. However, Ranbaxy supporters in the industry view this as another case of targeting generic companies in the US market, as they are hurting big pharmas revenues.
Ranbaxy sources said the products sourced by Wal-Mart do not belong to the category of banned drugs.
Wal-Mart officials maintained that the company works closely with its suppliers and FDA to ensure that manufacturers comply with US standards and that there is no reason to believe any tainted products reached its store shelves.
The consumer advocacy group agitating against Ranbaxys drugs being stocked by Wal-Mart is the United Food & Commercial Workers Union that claims to have 1.3 million members across the US and Canada. It has alleged that Wal-Mart is stocking Ranbaxy drugs to cut its costs and the purchase should be further scrutinised.
Wal-Mart, which is known for selling products at most competitive rates, is generally accused by activist groups worldwide for cutting costs through questionable means.