P.T. Jyothi Datta

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Mumbai, June 12 Drug-maker Ranbaxy may have got a revitalising shot through its stake sale to Japanese company Daiichi Sankyo, but the transaction is not without its sceptics in the health advocacy circles.

Will Ranbaxy be able to pursue its aggressive strategy to produce generic medicines, or will the specialised orientation of Daiichi Sankyo prevail, is what worries us, a representative with the Centre for Trade and Development told Business Line.

Ranbaxy has been aggressive in supplying generics, like anti-AIDS drugs, to developing countries, the company has participated in pre-grant oppositions in India (where a patent application is opposed before the Patent Office takes a decision) and it has been able to make similar versions of drugs like Tamiflu, used in the case of bird-flu, even as the patent situation was not clear.

This generic orientation could get influenced under the new owner and that would affect the supply of low-cost medicines to patients in India and other developing countries, the Centad representative said.

Corporate mergers and acquisitions in the pharma segment should not be viewed with the same lens as a regular corporate deal, as it could affect access to medicines, he added.

The Daiichi Sankyo-Ranbaxy deal could be a trigger for more such acquisitions of local medicine producers by multinational companies. So, the Government needs to study the impact of this transaction and though it cannot ban companies from merging, it certainly can try and ensure that the supply of medicines does not get affected in the long term, he added. In a liberalised economy, if you are in it for a penny, you are in it for a pound too observed, Dr Amit Sengupta, of the All India People’s Science Network, indicating that people will have to go with the outcome of the deal. The bigger picture is that companies are less interested in manufacturing medicines and prefer to shift to just trading.

Ranbaxy’s decision to sell majority stake in it to Daiichi Sankyo continued to be top of mind, not just among health advocacy workers, but also among distributors and trade channels. “I have got calls from stockists and C&F agents from the morning, asking what will happen down the line,” said Mr J.S. Shinde of the All India Organisation of Chemists and Druggists (AIOCD). Until the deal is sealed, the impact will not be felt on the ground, he said. It may take another two-three months before even the first impact is felt, in terms of whether the two companies have over-lapping products and whether then products would be trimmed.

But such worries have not yet trickled down to pharmacists, as one chemist said: as long as the two companies keep the medicine supply going, it does not matter who was bought out and by whom.

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