Ranbaxy's Globalization Strategies and its Foray Into the US

The company concentrated on developing its own infrastructure in the US rather than depending on its partners. Emerging opportunities in the US generic markets were used by Ranbaxy as its launch pad for establishing operations in the country. Between 1995 and 1998, the company filed 16 abbreviated new drug applications (ANDA). The company acquired Ohm Labs, a generics company with experience in FDA approvals and formulations, in 1997.

This helped form a base for Ranbaxy's foray into the US generics market. In 1998, Ranbaxy started marketing its products. In fiscal 1998, Ranbaxy's US operations incurred annualized losses of US$ 2.5 billion...

However, large Indian pharma companies were gearing up to face the threat from multinationals and they were making high investments in R&D activities. With import tariffs also coming down, Indian players faced increasing competition from cheap imports too. According to McKinsey, the Indian pharmaceutical industry would grow to US$ 25 billion by the year 2010. Indian pharma companies in general, and Ranbaxy in particular, had several advantages. They had a large talent pool of pharma scientists and their costs were low. Ranbaxy had several active pharmaceutical ingredients (APIs) that were available at low cost. Costs played an important role in the generics market, as the products were differentiated only by cost...