<div><span>Ranbaxy Laboratories did not have many options other than being taken over by another company. <br /><br />It had done much to develop the generics drugs business and was among the few Indian companies that made an impact abroad. <br /><br />But in the last few years, it has severely damaged its own reputation with supply of substandard products and fraudulent practices. <br /></span><div><span><br />The sale of the company by its Indian owners to the Japanese company Daiichi Sankyo did not improve things. <br /><br />Product quality and governance issues combined to erode more than half the worth of the company in a short period.</span></div><div><span><br />Under its own name and address the company would have taken a long time to live down its bad image and get back to good business ways. <br /></span></div><div><span><br />But it has a good portfolio of drugs which can still make business. Sun Pharma has found that opportunity with its acquisition of the company.</span></div><div> </div><div>There is still a lot of scope for the growth of the generics market both in the developed and the developing world. <br /><br />The $ 3.2 billion acquisition of Ranbaxy makes Sun Pharma the world’s fifth biggest generics manufacturer and gives it the size and scale to exploit the potential. <br /></div><div><br />The bigger size and resources make the new company better placed to promote research which is the key to growth but is the weak point of Indian companies.</div><div><br />There is the need for consolidation in all operational areas. <br /><br />The US is the world’s biggest drug market and half of the revenues of Indian drug companies will come from there in the near future.</div><div><br />That makes it imperative that all drug companies follow and implement the stringent standards of quality prescribed by the US Food and Drug Administration (FDA).</div><div> </div><div>So the first challenge for Sun Pharma will be to resolve the regulatory issues in Ranbaxy’s record. Drugs from four Ranbaxy plants are banned in the US. <br /><br />There is the need to get the decisions reversed and establish trust and confidence in the products. <br /></div><div> </div><div>Sun Pharma also had a brush with a regulatory problem last month but it is better placed to handle them.</div><div> </div><div>The cultural and operational issues in the merger, with the combined entity working 47 plants across five continents, will also have to be addressed. <br /><br />A message from the Ranbaxy experience is that compromise on quality never pays but only hurts ultimately. This is a lesson which can be usefully learnt by other companies too in all sectors.</div></div>
<div><span>Ranbaxy Laboratories did not have many options other than being taken over by another company. <br /><br />It had done much to develop the generics drugs business and was among the few Indian companies that made an impact abroad. <br /><br />But in the last few years, it has severely damaged its own reputation with supply of substandard products and fraudulent practices. <br /></span><div><span><br />The sale of the company by its Indian owners to the Japanese company Daiichi Sankyo did not improve things. <br /><br />Product quality and governance issues combined to erode more than half the worth of the company in a short period.</span></div><div><span><br />Under its own name and address the company would have taken a long time to live down its bad image and get back to good business ways. <br /></span></div><div><span><br />But it has a good portfolio of drugs which can still make business. Sun Pharma has found that opportunity with its acquisition of the company.</span></div><div> </div><div>There is still a lot of scope for the growth of the generics market both in the developed and the developing world. <br /><br />The $ 3.2 billion acquisition of Ranbaxy makes Sun Pharma the world’s fifth biggest generics manufacturer and gives it the size and scale to exploit the potential. <br /></div><div><br />The bigger size and resources make the new company better placed to promote research which is the key to growth but is the weak point of Indian companies.</div><div><br />There is the need for consolidation in all operational areas. <br /><br />The US is the world’s biggest drug market and half of the revenues of Indian drug companies will come from there in the near future.</div><div><br />That makes it imperative that all drug companies follow and implement the stringent standards of quality prescribed by the US Food and Drug Administration (FDA).</div><div> </div><div>So the first challenge for Sun Pharma will be to resolve the regulatory issues in Ranbaxy’s record. Drugs from four Ranbaxy plants are banned in the US. <br /><br />There is the need to get the decisions reversed and establish trust and confidence in the products. <br /></div><div> </div><div>Sun Pharma also had a brush with a regulatory problem last month but it is better placed to handle them.</div><div> </div><div>The cultural and operational issues in the merger, with the combined entity working 47 plants across five continents, will also have to be addressed. <br /><br />A message from the Ranbaxy experience is that compromise on quality never pays but only hurts ultimately. This is a lesson which can be usefully learnt by other companies too in all sectors.</div></div>
