NEW DELHI : It’s been a year of bitter medicine for Indian pharma companies with fines worth millions of dollars imposed by various foreign regulators, even as they stitched together deals worth billions of dollars, including the high profile Sun-Ranbaxy merger.
On the other hand, the government sought to put controls on drugmakers when it came to pricing of essential drugs, including those for common cough and cold as also for cancer and other diseases.
Incidentally, home-grown Ranbaxy, founded by the family of Malvinder and Shivinder Mohan Singh, was at the centre of most of the developments for major part of the year, including for M&A deals and regulatory clampdown by foreign regulators, including in the US and Europe.
In a surprise announcement in April, Sun and Ranbaxy — at that time owned by Japan’s Daiichi — declared an all-stock deal to create India’s largest and world’s fifth-largest drugmaker in an over USD 4 billion deal.
The deal soon came under the scanner of fair trade watchdog Competition Commission of India (CCI), which ordered the first ever public scrutiny of an M&A deal for this merger, before clearing it towards the end of the year after ordering the divestment of seven brands between two firms.
The deal marked another transition in the ownership for Ranbaxy, in which Japan’s Daiichi Sankyo had acquired a majority stake in 2008 for Rs 22,000 crore after the erstwhile promoters Malvinder and Shivinder Singh exited the firm.
Otherwise too, both Sun and Ranbaxy had to face their own issues with the US health regulator FDA for alleged violation of good manufacturing practice norms.
A number of other Indian drugmakers, including IPCA Labs, Wockhardt and Dr Reddy’s Laboratories were also pulled up by the FDA for one or the other reasons.
The FDA imposed a ban on import of medicines produced at Ranbaxy’s India-based factories into the US, the world’s biggest drug market.
Ranbaxy also agreed to pay USD 39.75 million (around Rs 244 crore) in tranches to the state of Texas in the US to settle the litigation concerning its participation in the Texas Medicaid Program.
Its woes extended to Europe when it was barred from exporting certain antibiotics from its Dewas plant to Germany for non-compliance to ‘good manufacturing practise’ norms.
Later, certain drugs produced at its Dewas plant were barred from export to the entire European Union for non-compliance to ‘good manufacturing practise’ norms.
Further, a US court did not grant the company temporary restraining order to block the US health regulator from approving other ANDAs for generic versions of digestive disorder medicine Nexium and anti-viral Valcyte.
Ranbaxy Laboratories had sued USFDA over revoking an
approval to sell generic versions of Nexium and Valcyte in the US market.
It had also sought restraining the approval given by the USFDA to Dr Reddy’s Laboratories and Endo Pharmaceuticals from launching generics of Valcyte.
On the positive side, a US jury ruled that AstraZeneca’s patent litigation settlement for blockbuster drug Nexium with Ranbaxy was not anti-competitive.
Sun Pharma also faced regulatory heat as FDA put a ban on import of products made at its Karkhadi plant in Gujarat.
Another pharma firm which ran into rough weather was Wockhardt, in whose US facility in Illinois, USFDA found many procedural lapses.
The US health regulator also found nine possible procedural deviations in a manufacturing plant of Dr Reddy’s Laboratories during an inspection.
Among others firms, Ipca Laboratories’ Ratlam unit was also found to be violating good manufacturing norms by USFDA investigators.
Lupin and Unichem Laboratories were among six global drug makers on which the European regulator imposed a collective fine of 427.7 million euros for striking deals with French firm Servier to prevent entry of cheaper version of blood pressure drug Perindopril in the EU.
When it came to overseas acquisition by domestic firms, Aurobindo Pharma took the lead acquiring assets of nutritional supplement maker Natrol Inc and its other affiliate entities for USD 132.5 million (over Rs 810 crore).
Cipla wasn’t far behind acquiring 60 per cent stake in Sri Lankan firm for USD 14 million (nearly Rs 85 crore) for marketing its products. It also acquired a majority stake in a Yemeni firm for USD 21 million (over Rs 125 crore).
The Mumbai-based firm also announced to acquire 14.6 per cent stake in US-based Chase Pharmaceuticals Corporation Inc.
It also announced its intention to acquire two manufacturing units from its contract manufacturer Okasa for Rs 100.93 crore.
During the middle of the year, Cipla said it would invest up to 100 million pounds (nearly Rs 1,030 crore) in UK over next few years for launch and development of new drugs as part of its global footprint expansion plans.
As far as partnerships are concerned, the highlight of the year was when three Indian pharmaceutical firms — Cipla, Aurobindo and Emcure — were named among the seven global companies that signed new sub-licensing agreements with UN-backed Medicines Patent Pool (MPP) for the manufacture of generic HIV medicines – atazanavir and dolutegravir.
MPP negotiates licences with key patent holders to speed access of low-cost generic medicines to developing countries.
On the other hand, US-based drug maker Gilead Sciences Inc signed licensing agreements for hepatitis C drugs with seven India-based firms, including Cipla, Ranbaxy, Cadila, Mylan Laboratories, Sequent Scientific, Strides Arcolab and Hetero Labs to make them available in 91 developing countries. (AGENCIES)
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