Ranbaxy's US FDA case may hurt other Indian pharmas

ADVERSE REACTION: The Indian drug major's reputation may be hit due to the controversy

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New Delhi: Pharma major Ranbaxy is in trouble again with US FDA. Two months ago, CEO Ranbaxy had told mediapersons, "In terms of the matter with the FDA and the DOJ, this is nothing new."

Indian Bureau Chief, PharmaNewsAsia.com, Vikas Dandekar said, "In July, the dept of justice had given a 60-day-abeyance to Ranbaxy so that it can furnish some documents and that period comes to end in September. We have to really wait and watch what comes after that."

Now the US FDA has issued two warnings to Ranbaxy for drugs made at two of its plants in India . As a results the US agency says it will refuse to approve any new products till Ranbaxy responds.

This could have far reaching implications for the pharmaceutical industry in general.

This is the second warning from the US FDA in the last three years . But Ranbaxy's new owner Daiichi Sankyo says the deal is still on track. The investors find that a little hard to swallow.

Fundamental Analyst, Phanni Shekhar, said, "Irrespective of whether the Daiichi deal happens or not, we believe that on a more fundamental basis there are stronger concerns in Ranbaxy and we would like to stay clear of that."

Ranbaxy is the only Indian company to be dragged into court by the US FDA.

The big fear amongst the pharmaceutical industry is that India could be smeared by the same brush that got China a bad name in America .The final answers may lie in the legal battles that Ranbaxy will have to fight in court.