Ranbaxy: No more an Indian multinational

Group III : Anusha Bansal Gulshan Jain Himani Wadhwa Monisha Mohanan Vaibhav Sharma

Summary
1937 ,Started as a local distributor of medicines of foreign pharmaceuticals. Underwent crisis but managed to set up first plant at Okhla in New Delhi in 1960 Realized success was in internationalizing Export , patent regime , legal conflicts , acquisitions , research , generic brand , route to expand and future strategies

Background
Pharmaceutical company Ranbaxy is among the top ten generic companies of the world. It aspires to achieve a revenue target of US $ 5 billion by 2012 and become amongst the top five generic companies of the world.

The initial steps

1937 Ranjit Singh and Gurbax Singh at Amritsar Primary aim to distribute locally the medicines of foreign pharma companies Japanese Shinogi , manufactures antituberculosis medicines and vitamins. Financial crisis and government intervention 1960 , first plant at Okhla in New Delhi

 Launched diazepam under the name Calmpose in 1968 Ranbaxy went public in 1973

Success just came along

Competitive advantage Low cost Global generic opportunities Worldwide demand for low health care cost Quality manufacturing INTERNATIONALIZATION

Internationalization Process
First export order from Mauritius in 1970 Patent act(1930) focus on product patent 1970 , product patent replaced to process patent Ranbaxys exports grew rapidly from rs 7324 million in 1999 to rs 26411 millions in 2007 Ratio of exports to total sales changing from 47 % to 63%

First joint venture in 1977 in Lagos in Nigeria Malaysia in 1982 Indonesia in 1984 Ranbaxy entered into an agreement with Eli Lilly & Co. of US in 1992 for joint venture in India Established regional HQ in London(UK) and Raleigh(US)

 Tongsa plant in Punjab got US FDA approval in 1988 Granted US patent for Doxycyline in 1990 Cephalosporin in 1991 First approval from US FDA for Anti Retroviral drug under US Presidents Emergency Plan for AIDS Relief (PEPFAR)

Opportunities and Challenges

World market for generic presecription drugs was presumed to increase from US $ 44.4 billion in 2005 to US $ 83.9 billion in 2010. Major Drivers in generics Patent expiration Cost containment Price differentials

US the key market

Large market size Margins Rising health care cost Congress support Legal protection in the form of Hatch Waxmans Act

France

Acquisition and Joint Venture French Perfect Generic Manufacturers Act Acquisition of RPG Aventis took Ranbaxy to fifth position among perfect generics manufacturers in Generic market

Strategies and future

Present strategy includes Generic Approval Process Abbreviated New Drug Application (ANDA) Needs to increase significance of R & D Focus on innovation Maintain low costs To sustain the company may be required to move rapidly from generic dosage to branded formulations.

Ranbaxy , a hot cake

Proved to be a national champion Exploited opportunities from globalization and liberalization in true sense In June 2008 , Japanese pharmaceutical firm Daiichi Sankyo announced to acquire major equity stake in Ranbaxy Indian government approved the deal in August 2008 As a result , Ranbaxy ceased to remain and Indian Multinational

And the show must go on!!!

26 January 2012 : Ranbaxy announces court filing of consent decree with US FDA. 21 December 2011 : Ranbaxy announces consent decree with US FDA . Ranbaxy to market Daiichi Sankyos innovative products in Malaysia. 6 December 2011 : Ranbaxy launches authorized generic version of caduet in the U.S 1 December 2011 : Ranbaxy announces launch of atorvastatin , generic lipitor in the U.S.

Learning
Identify the reasons that led Ranbaxy to internationalize rather than focusing on the home market. Explore the challenges a company from a developing country has to face for its international expansion. Critically evaluate the factors contributing to Ranbaxys success in its international expansion.