Generics - still controversial
December 19th, 2008The generic manufacturers are allowed to compete with the companies that went through the research and development phase after the patents have expired. All these “dangerous” companies need to do is to wait a few years and then copy all the original research. That means the product is bioequivalent and, under normal circumstances, the regulatory authorities in each country routinely licence the import of the copied drugs which are sold at a big discount. The action I am about to discuss does not affect your ability to buy generic viagra online. Although some thirty drugs are affected, they are treatments for rather different conditions. These letters assert that Ranbaxy has not maintained proper manufacturing standards in two of its plants. Following the warnings, there is also an Import Alert that allows US customs officials to detain the finished drugs as they enter the US. These Warning Letters are somewhat controversial. There is no suggestion that the thirty drugs named on the list and manufactured in the identified plants are unsafe. This is, at best, a technical violation by the manufacturer. But the effect on Ranbaxy’s reputation has been quite chilling and its share price has fallen. To repeat, this does not affect the generic viagra manufactured by Ranbaxy. The politics of free trade are always complicated. When the interests of significant local industrial players are involved, there is always going to be a temptation to be protectionist. In this instance, the decision of the FDA looks suspect because it has not required a recall. By its own admission, there is nothing wrong with the generic drugs manufactured by Ranbaxy. They can be safely consumed by existing patients. But the FDA is nevertheless authorising customs to stop imports of new supplies. I suspect that if the FDA had tried to interfere with the import of generic viagra, there would have been am outcry. As it is, there has been little comment outside the financial press discussing the effect on share price.