A Bitter Pill for Ranbaxy?

Ranbaxy, one of Indias major Drug makers, has emerged to be a successful contributor towards Indias solid long-term growth of pharmaceuticals industries. India, currently is the world's third-largest in terms of volume and stands 14th in terms of value, in the comparison to the global market. Ranbaxy has moved a step towards achieving the World Health Organization's goal of eradicating malaria by 2050 by its launch of the Synriam which is Indias first domestically developed drug. This drug proves to be more efficient and simpler for the treatment of uncomplicated Plasmodium falciparum malaria, in adults. The companys commitment to increase penetration and improve access to medicines in the globe made them exposed to certain shortcomings. In the wake of 2006, Ranbaxy was tainted with the allegations for not adhering to the good manufacturing practices (GMP) set by the US Food and Drug Administration its Paonta Sahib manufacturing plant in India's Northern state, Himachal Pradesh. The former Ranbaxy executive-turned-whistleblower, Mr Dinesh Thakur, alerted the US authorities about the forgery and adulteration taking place within the firm which led The Indian multinational pharmaceutical company to confess the charges related to drug safety on May 13, 2013 and a fine of $500 million was imposed. To cope up with the demeaning image in the globe, Ranbaxy approved Japanese firm Daiichi Sankyo on June 11, 2008 to acquire a majority stake in the domestic front for over $3 billion (Rs 150 billion). Daiichi currently holds 63.9 percent stake in Ranbaxy. Indian market has been viewed as a market having economic prospects in terms of being a potential contributor of future sales and for significant investment. It is impossible for the foreign companies to ignore such promising aspect of our domestic Market. Although of such prospects, India has to develop its Industry in order that its capabilities are effective to the globe. Indias market is falling back because it is highly fragmented and is extremely price sensitive. Affordable healthcare continues to pose a challenge in the country, even with the number of healthcare initiatives by the Government are launched to improve the situation for Indias vast population. Indian courts and regulatory authorities are very sensitive to pricing

issues in making decisions around intellectual property. Pharma companies coming into India may need to consider a differential pricing. They will need to evaluate access to medicines, a volume-based pricing strategy and take into account gradually increasing per capita incomes to come up with acceptable price levels for their drugs. Global pharma companies will then need to decide how to manufacture their products, and identify and develop strong local partners. These drawbacks needs to be identified, evaluated and correct policies are needed to be outlined, to keep up with the aim of long term growth in this sector.