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Ranbaxy may reduce global sales team

Layoffs to be mostly in the US

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Even as trouble thickens for maker Laboratories, the company is now considering downsizing its global force by around a third.

A majority of the job cuts would be in the US, it is learnt.

“Ranbaxy is planning to lay off globally… mainly in the US. The company was contemplating this for some time, especially in view of the issues there.

The business has suffered because of regulatory issues through past years. Besides, it also had to incur additional costs to settle those issues,” an industry source told Business Standard.

An email query sent to Ranbaxy did not elicit any response.

According to a company official who did not wish to be named, Ranbaxy’s current global field force stands at around 14,600, of which 5,000-5,200 are in India.

Early last week, Ranbaxy pleaded guilty to making fraudulent statements to the US and Drugs Administration (US FDA) about how it tested drugs at two of its Indian plants and agreed to pay $500 million as penalty. This is the largest false-claims case involving a generics drugs maker in the US. Ranbaxy, in papers filed in a Federal court in Baltimore, admitted it had sold batches of drugs that were improperly manufactured, stored and tested. The generic drugs in question had been manufactured at the company’s facilities at Paonta Sahib and Dewas in India. They included acne drug Sotret, epilepsy and nerve-pain drug Gabapentin and antibiotic Ciprofloxacin.

Ranbaxy, which had first come under US lens in 2006 for violating manufacturing norms, has since struggled in the US, its largest pharmaceutical market.

After the US drug regulator’s import alert in September 2008 on the company’s key units in India and ban on 30 products approved from these facilities, Ranbaxy had to suffer huge losses.

It also lost its ground to  various other drug companies entering the market in the years to follow.

“It will certainly be a challenge for the new management to restore the same confidence in quality of its products and get approvals for new products,” another source said.

Supplies from us units
Company officials, however, said Ranbaxy had so far met all obligations under the ongoing consent decree, which it signed with the US FDA in late 2011 to restore all good practices.

However, people in the know say it might not be easy for the company to resume supplies from the banned units to the US. “The US FDA will re-inspect Ranbaxy’s facilities at Paonta Sahib and Dewas.

“The company could resume supplies from there only if they are fully satisfied. Besides, if the company wants to relaunch the banned products in the US, it might be required to seek fresh approvals because the earlier approvals had been secured on the basis of fake data,” an industry official said.

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