Seven years after the first warning in June 2006 from the U.S. Food and Drug Administration (FDA) and five years after the Department of Justice initiated legal proceedings against the company, Ranbaxy is back in the news for the same wrong reasons. Last fortnight it pleaded guilty to felony charges in the U.S., admitting to selling adulterated drugs with intent to defraud, not reporting that its drugs failed to meet specifications and making intentionally false statements to the government. These are serious charges against any company, not to talk of one from the critical industry of pharmaceuticals, whose products are responsible for curing illnesses and ensuring the well-being of humankind itself. In the event, it is indeed surprising that Ranbaxy managed to get away with a fine of just $500 million. If the charges of the whistle-blower, Dinesh Thakur, are to be believed, Ranbaxy is guilty of not just failing to follow good manufacturing practices as prescribed by the FDA but of outright fraud. The company’s actions are a breach of the sacred trust that patients, whether foreign or Indian, place in it when they buy its drugs. The company deserves to be penalised more severely; at its harshest it could even include blacklisting of its drugs pending investigation.

Yet the fact on the ground is that the Indian government has done precious little to either probe or act against the company since the misdemeanour first came to light. As recently as in November, Ranbaxy was forced to withdraw its anti-cholesterol drug from the American market after some batches were found to be contaminated with glass powder. It is a reflection of the state of governance prevailing now that even after this, and Ranbaxy’s admission of guilt, neither the government nor the regulator — the Drug Controller General of India — has announced a probe into the company. Even assuming that Ranbaxy has mended its ways, don’t consumers need reassurance of the same and is it not the government’s responsibility to provide that after suitable investigation? The Ranbaxy fraud raises two vital issues. First, about the quality and efficacy of drugs produced not just by that company but by the entire pharmaceuticals industry in India. We need robust regulation of the sector, including of surprise checks and visits to production facilities to reassure ourselves. Second, about the consequences for India’s fast-growing generic drugs export industry. Ranbaxy-like episodes will not only set back the fortunes of the export industry but also give a handle to multinational pharmaceutical companies — no angels themselves — in their endeavour to push their patented, branded drugs as opposed to the cheaper, generic versions.

More In: Editorial | Opinion