Updated on 29 May 2013
Its majority-stake owner, Daiichi Sankyo that is now crying foul, and intends to sue Ranbaxy's original promoters for willful concealment of information and misrepresenting facts, has itself failed in its due diligence in 2008. So, enamored was this company with Ranbaxy's potential that it erred and Daiichi Sankyo is paying the price for its hurried acts.
One major fallout of all this is that all of India's generics exporters to US will now face closer scrutiny, which in the overall context is actually a good thing. The US FDA's improved GMP monitoring for Indian manufacturers will ultimately ensure high overall quality. However, India's pharma exporters need to brace up for this.
Although the key issue of ethics in business remains, how far can one go to gain competitive advantage? Self-policing is a plausible solution, but stronger accountability for leadership and a punitive action in case of wrongdoing is a must to drive home the point. And this is the responsibility that the Drug Controller General of India (DCGI) should rise up to. DCGI's office is guilty of a mild response on the case, stating that no violation of laws at home turf has happened.
Ranbaxy's damage control exercise is emphasizing on putting in mechanisms to bring in transparency and contain malpractices. The iconic company can emerge stronger from this and the pharmaceutical industry, where such malpractices are likely to be more rampant than we all are willing to believe, should take an alternative view and actively foster a business culture that values ethics and responsible behavior. It's in everybody's interest. Yes, it is in shareholders interest as well!