The Ghost of FDA continues to haunt Ranbaxy. After blacklisting all of its Indian facilities, the FDA (US Federal Drug Administration) has now annulled its
tentative approval to grant Ranbaxy a market exclusivity which latter
had procured for manufacturing generic versions of two off-patent drugs.
This missed opportunity is going to cost Ranbaxy more than $200 million
as per the analysts. FDA has found that the source of these drugs would have been Panota Sahib and Devas facilities that have been blacklisted for
manufacturing lapses and other regulatory non-compliances way back in
year 2008. The other factories at Mohali in Punjab and Toansa in
Himachal Pradesh were blacklisted in last and this year respectively.
There were speculations that the acquisition of Ranbaxy by Sun Pharmaceuticals might allay Ranbaxy’s troubles, but this incident has shattered that hope also.
Ranbaxy was granted a market exclusivity of 180 days after its Abbreviated New Drug Application (ANDA) was accepted by the USFDA with respect to two drugs. An ANDA is basically a tool provided under the Drug Price Competition and Patent Term Restoration Act, 1984
(also called the Hatch-Waxman Act) to allow flow of generic medicines
by granting approvals without conducting duplicative clinical trials.
The drugs involved here are the generic versions of Roche’s antiviral
drug Valcyte and AstraZeneca’s heartburn pill Nexium. Ranbaxy was
supposed to launch Nexicum by the month of May and market it till
November, but that never happened. This made other generic companies
come out of their coffins and demand the revocation of the exclusivity
rights granted to Ranbaxy.
It
is obvious for us to assume that Ranbaxy ought to have delivered upon
its promise to market the generic drug after it procured market
exclusivity rights for 180 days. Other generic manufacturers and general
public was ultimately bearing the cost of this leeway for they still
had to pay high price for the drug which was already off-patent.
Nevertheless, my concern lies on a different platform here. Indian
generic companies have been the target of
USFDA for quite a long time now. The blacklisting of Ranbaxy’s
facilities, however has taken this issue to a whole new level now for
the number of warnings have suddenly surged after the incident. Cadila Pharmaceuticals
was warned by the USFDA for not complying with the quality standards at
its manufacturing factory situated at Akhileshwar in Gujarat this year.
The exact reason was cited as inaction towards consumer complaints
between 2011 and 2012 for unpleasant odours and impurities in its drugs.
Drugs are meant to be unpleasant and assuming that the deft ‘consumers’
identified impurities, why it took USFDA three long years to issue the
warning? Similarly, in the month of July this year, an Ahemadabad based
drug-maker Marck Biosciences was issued a warning because of ‘Unclean Toilets and Decaying Frogs’ found in the facilities.
The
bigger picture here portrays India as a soft target for the US
policymakers and they have left no stone unturned to insert slabs in the
shoes of the Indian Generic spearheads. One of the complainants in the
present Ranbaxy’s case was the Attorney General of Connecticut who urged
FDA to cancel Ranbaxy’s ANDA application. As per the June 2014 issue of
a report
released by CRISIL, the spurge in the number of actions launched by FDA
on Indian drug facilities has nothing to do with a country specific
bias and is aimed at “Boosting the US supply chain”.
It also states that the balance sheet of Indian drugmakers is quite
strong and will continue to remain healthy in the near future also. But
the story of Ranbaxy speaks otherwise. It got acquired by other
companies after its facilities got blacklisted. This year only, a
Bangalore based Pharmaceutical company known as Medreich Ltd. was acquired by Meiji Holdings Ltd., a Japanese company for $290 million. In 2010, US based drug manufacturer Cambrex Corporation purchased 51%
stake in India’s Zenara Pharma. Big companies though don’t get acquired
that easily, but they have to keep shedding their leaves by selling
their shareholdings to offset the losses.
India’s reputation as a reliable drug supplier has been blotted very succinctly
by the US authorities. It may remain the biggest drug supplier to the
United States but will never be able to retain the credibility for its
goods like it was some years ago. It’s true that to some extent the
companies have also been negligent, but the direct interference of a
country’s department into our local periphery and the indifferent
attitude of the Indian Government towards the plight of the Generic
Drugmakers is quite whimsical. It’s time that government must come to
aid these companies or they will be left with no option but to exhibit a
parade in front of the US and Indian premiers this Republic Day with
their flags down to display their plight.
