By Kiran Mazumdar Shaw

The hefty fine that Ranbaxy Laboratories will pay as part of the drug safety settlement in the US threatens to seriously erode its reputation that can take years to regain.

This is particularly sad as Ranbaxy has been a leader and stalwart among Indian generic drug makers that have, over the decades, built a reputation of supplying good quality medicines at reasonable prices to patients globally. This is thus a wake-up call for the Indian pharma industry as a whole.

A failure on our part to set standards of quality and compliance for both products and services that are at par with the best in the world can cause irreparable damage to Indian companies’ long-term business prospects in the US market.

The Ranbaxy issue proves that an isolated case can undo the painstaking gains made in setting high-quality standards in India, which has the most number of FDA-approved plants outside the US.


Quality is not the only issue at stake, we are in danger of losing our hard-earned standing in the West on the crucial issue of respect for intellectual property.

The Glivec ruling, a spate of compulsory licencing cases as well as the recent Merck vs Glenmark case over the Januvia diabetes drug have made overseas pharma innovators wary of doing business in India.

Indian pharma companies need to wake up to the fact that intellectual property plays an important role in building a strong reputation.

A loss of reputation means loss of market share, which we can ill afford in this hyper competitive landscape.

So, Indian companies should not sacrifice long-term value creation for short-term gains by compromising on quality, compliance and IP.

Today, the global drug industry is struggling to bring new drugs to the market. The regulatory environment has become increasingly difficult, and insurers and governments are challenged with rising healthcare costs.

As affordability is now recognised as a critical factor to build sustainable models for healthcare in the context of ageing populations and the need for universal coverage, I believe it is a matter of time before new drug development will also see India take a greater share in the development process.

Already, India has emerged as a preferred innovation partner for contract research and clinical development services for large pharma innovators, thanks to its competitive cost base and a strong scientific talent pool. But India runs the danger of turning the clock back by failing to plug loopholes in its patent protection rules.

India has a unique opportunity to deliver “affordable innovation” to global markets by building excellence across the innovation chain from discovery to product and an equally robust IP regime.


Indian pharma companies need to be surefooted in their approach to quality and IP issues in order to respond to the global needs of affordable healthcare.

We also need to see better harmonisation of the Indian regulatory system with those in the US and Europe. This would allow for the leveraging of each other’s strengths to create affordable innovation.

The US and Europe have a wealth of intellectual property sitting on the shelves, and India can play a huge role in developing and commercialising these assets in affordable ways.

The necessity to bridge the gap between the regulatory environments in India and the West is felt most strongly in the field of biotechnology, which is a high-risk, high-investment, research-intensive field with high entry barriers.

I have built Biocon on a strong foundation of innovation, integrity and quality. For, there are no short cuts to success, and painstaking IPled research and regulatory compliance is the only way to the top.

Indian pharma and biotech companies have put the country on the map and their actions must ensure that this pride of place is kept intact. The industry needs to be responsible for the reputation of India as a responsible pharma partner.

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