Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Ranbaxy Spoils It for Everyone

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Here's the good news: You probably don't own this company; it's not available on U.S. exchanges.

Here's the bad news: The company's actions could be far-reaching and affect many companies in the same industry.

The Food and Drug Administration claims that generic-drug maker Ranbaxy falsified data that it submitted to the agency. It's already banned the import of drugs from two of Ranbaxy's plants and now it won't review any new marketing applications from the plant where the violations took place.

That just doesn't seem like an extreme enough punishment.

The FDA has to be able to trust that the data it receives is accurate. The application for Eli Lilly's (NYSE: LLY  ) blood thinner, prasugrel, was reportedly so long that if you printed out all the pages it would be as high as the Empire State Building. The agency needs to be able to use its limited funds to figure out whether the data supports an approval, not whether it's accurate.

Approval of Johnson & Johnson (NYSE: JNJ  ) antibiotic ceftobiprole has been held up because the agency questioned some of the data that came out of the clinical trial sites. I think it's likely we'll see more questioning of data like this -- whether it's justified or not -- in the future. Unfortunately, once one drugmaker violates the FDA's trust, the agency is bound to waste time scrutinizing the accuracy of data from everybody, which will only further delay approvals.

Since Ranbaxy is based in India, the biggest ramifications could be for foreign generic-drug makers, such as Israel's Teva Pharmaceutical (Nasdaq: TEVA  ) and India's Dr. Reddy's Laboratories (NYSE: RDY  ) . Between Ranbaxy's falsified data and Baxter's (NYSE: BAX  ) contaminated heparin that originated in China, the FDA is likely becoming continually wary of foreign manufacturing.

Thanks a lot, Ranbaxy.

Our Foolishness is far from generic:

Motley Fool Rule Breakers is always on the hunt for hot drug stocks and other cutting-edge picks. Click here to see all of our latest discoveries with a free 30-day trial subscription.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Johnson & Johnson is an Income Investor pick. The Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 26, 2009, at 3:23 PM, nerd1951 wrote:

    "Unfortunately, once one drugmaker violates the FDA's trust, the agency is bound to waste time scrutinizing the accuracy of data from everybody, which will only further delay approvals."

    Waste Time? Really? We're talking about the FDA actually doing it's job and holding drug makers account for the data they provide. Protecting people's health and even lives.

    We'd be a lot better off if the SEC, the FDIC and various other financial regulators had shown a similar lack of trust and wasted a little time going over the books at banks and hedge funds.

    As a stock holder in JNJ, I'm glad the FDA is being cautious. It's less costly to wait a little longer for the FDA than to clean up the bad publicity and cost of law suites later on.

  • Report this Comment On February 27, 2009, at 2:30 PM, pamuckraker wrote:

    Please read this article for more information on Ranbaxy and their deceitful practices which have put lives in jeopardy:

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 840186, ~/Articles/ArticleHandler.aspx, 10/28/2016 6:47:00 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 9 hours ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 4:00 PM
BAX $46.82 Down -0.62 -1.31%
Baxter CAPS Rating: ****
JNJ $115.70 Up +1.14 +1.00%
Johnson and Johnso… CAPS Rating: ****
LLY $76.16 Down -0.60 -0.78%
Eli Lilly and Co. CAPS Rating: ***
RDY $49.37 Up +0.81 +1.67%
Dr. Reddy's Labora… CAPS Rating: ****
TEVA $43.15 Down -0.21 -0.48%
Teva Pharmaceutica… CAPS Rating: ****