Updated on 29 May 2013
The former shareholders and owners of Ranbaxy, the Singh family, reacted strongly to Daiichi's comments. Mr Malvinder Singh, said in a statement that, "The comments made by Daiichi Sankyo regarding concealment and misrepresentation are false and baseless. Daiichi Sankyo purchased the Singh family's interests in Ranbaxy in 2008 after a long negotiation process, as is typical of deals of this magnitude, and after conducting full due diligence on the affairs of Ranbaxy."
Even as Daiichi plans to recover the $500 million that it paid in fines from the company's former promoters, Ranbaxy stocks have taken a beating since the settlement was made. On the closing of May 24, 2013, Ranbaxy stocks, which trade under the symbol RBXZF in US-based NASDAQ, recorded prices of $8.45 and also recorded stock value of $7.80 (Rs390.30) per share in the Bombay Stock Exchange.
Meanwhile, the Indian health ministry has ordered the Drugs Control General of India (DCGI) to examine all the dossiers and drug applications on the basis of which approvals had been granted to Ranbaxy. "The regulator will evaluate all documents to see whether there has been any compromise in safety, quality, efficacy, or even in submitting data for seeking approvals," a statement from the ministry said.
The Ranbaxy issue has threatened to complicate things for the other drug manufacturers from India, who currently hold a strong foothold in the US. India has the largest number of US FDA approved manufacturing plants outside of the US and the country's top five pharmaceutical companies contribute to 50 percent of the US market revenue. India, which gained popularity for cost effective, high quality drugs, today exports generics worth over $300 million in over 200 key markets in the US, Europe, Asia and Africa.
Will the Ranbaxy controversy hamper the growth of other Indian firms in the US? Let us know what you think in the comments section below.