Arun Sawhney joined Ranbaxy Laboratories just before Japan's Daiichi Sankyo acquired a controlling stake in the Indian drug maker. He was named head of Ranbaxy's global pharmaceutical business in January 2010. Following Ranbaxy's $500 million settlement with US authorities, announced on May 13, Sawhney, now Managing Director and CEO at Ranbaxy, defends the company in an interview with Chaitanya Kalbag.
Q. What about reputational damage to Ranbaxy?
A. Eventually it is the credibility that is built over a period. Ranbaxy has very high credibility even today. We'll need to continue demonstrating and building faith again with any institution that has been influenced by what has appeared in the media. The FDA themselves have gone on record in 2008 stating that patients must not discontinue therapy with Ranbaxy drugs. They never had a quarrel with the quality of the medicines.
Q. What about the glass found in Ranbaxy medicine in the United States?
A. There were no pieces of glass. There was glass - glass that was a particle like a grain of sand. Some people even reported shards - how can you have shards in a small tablet? There also the FDA has said there was no danger to patients. But we on our own did a voluntary recall of around 40 batches of Atorvastatin. Our quality control arrested it. The particles came from a glass-lined reactor in Toansa (Punjab) where a small chipping took place.
Q. But it had already reached shop shelves.
A. It had gone into distribution. Before it could become a large-scale issue it was arrested within the company. (Details of the recall are on http://goo.gl/zmiBP)
Q. In medicine, total integrity and brand reputation is very important.
A. This is a knowledge-based business. All the approvals of putting the drug on the market come on the basis of a very intensive examination of the manufacturing processes, safety of the compounds etc. The regulators will check, they will inspect the plants, they will study the data. There is a responsibility in the company to do analytics - the impurity profile of the product, the efficacy of the product. We also have to talk to the doctors, to the people in this part of the business to tell them about the benefits of the medicine.
Q. Doesn't being the largest drug maker in India require Ranbaxy to be an exemplar in quality control?
A. Certainly. I think Ranbaxy has lived up to that. Ranbaxy has led the way for the entire Indian pharmaceutical industry to do business globally. Ranbaxy set up its first venture [in international markets] in 1977. Ranbaxy was the first Indian company to set up operations in the US and Europe. As recently as 2012, Ranbaxy is the first company in India to have developed a new drug.
[Recalls] are a part of the business. There is no responsible company that doesn't have a recall in its history.
Q. Malvinder Singh has said that Daiichi Sankyo has mismanaged Ranbaxy for the past five years. What is your response?
A. Nothing. I will not react to statements that people are making in the press.
Q: What about Ranbaxy's financial performance since the takeover?
A: I think it's been good. We are expanding in India, and elsewhere in the world. We are setting up a greenfield facility in Malaysia, we are setting up a second plant in Nigeria, we continue to make investments in India. We are expanding globally.
Correction: The author's name was misspelled in an earlier version. The error is regretted.