fda bans India drugs, fda warns ranbaxy plant, generic drugs from India not tested
Mustafa Quraishi/AP
Ranbaxy Laboratories Limited Chief Executive and Managing Director Malvinder Mohan Singh
poses for photographs after a press conference in New Delhi,Tuesday, July 29, 2008.

Trust in India Falters With New Pharmaceutical Scandal

February 26, 2009 04:14 PM
by Rachel Balik
The largest pharmaceutical maker in India falsified test results for more than two dozen generic drugs sent to the United States.

FDA Halts Shipments of Drugs from Plant in India

Ranbaxy Laboratories’ plant in Paonta Sahib, India, lied to the FDA about test results; in response, the FDA will cease consideration of new drugs manufactured by the plant. For example, the plant refrigerated drugs and then claimed they had been kept at room temperature; such misrepresentation interferes with data gathering about product shelf life.

The FDA has emphasized that people should continue taking their medication, as it does not actually have reason to believe that there are problems with any of the drugs coming from the plant.

Background: FDA Issues Warning Against Drug Company

Based in India, Ranbaxy is the world’s largest producer of generic drugs. This is not the first time that the FDA has detected trouble with the company; in September, the FDA found that Ranbaxy had poor quality control for at least 25 generic drugs produced at Paonta Sahib and another plant.

The FDA determined that there was no real danger, urgent patients to remain on their medication and even allowed the continued import of one drug produced exclusively by Ranbaxy. But after the agency failed to catch a contaminated blood thinner imported from China, it has been making efforts to be more thorough with regulations.

Related Topics: India outsourcing scandal; outsourcing journalism to India

In January 2009, a Madoff-style scandal rocked the business world when the chairman of Indian IT outsourcing company Satyam Computer Services announced that he had overstated company profits and added a billion dollars to the company’s balance sheets. The company teetered on the brink of collapse, but the larger problem, BusinessWeek said, was that overall trust in India’s industries would flag.

The government promptly took control of the company to minimize the damage, but predicted that faith in India’s outsourcing companies would be shaken. India’s IT watchdog agency tried to emphasize that the situation was a  “one-off” and that assumptions should not be made about other companies. But the president of the UK-based World Council for Corporate Governance argued that the Satyam chairman’s misdeeds did not occur in a vacuum; others must have helped him.

The scandal immediately followed predictions at the end of 2008 that the strain of the recession would lead to increased outsourcing. Even newspapers and online publications had begun outsourcing a majority of their staff. Since 2000, Americans have lost one million jobs to outsourcing.

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