As Ranbaxy Laboratories laid out some of the actions it has taken "to address certain conduct of the past" to ensure the safety of its products, reports are circulating that the Indian drugmaker could shed up to a third of its salesforce.
The Gurgaon-based group, which last week pleaded guilty to felony charges related to drug safety and confirmed an agreement to pay $500 million in fines under a settlement with the US Department of Justice, is rumoured to be slashing its field force which is currently around 14,6000 strong.
The Business Standard newspaper quoted an unnamed industry source as saying that Ranbaxy will make most of the cuts in the USA where it has been hauled over the coals for a series of manufacturing violations. Its sales force in India is thought to be in the region of 5,000-5,200.
Ranbaxy is 'a different company today'
The rumours came after chief executive Arun Sawhney issued a statement saying that “Ranbaxy is a different company today", saying steps taken over the recent years "reflect the wide-ranging efforts of the current board and management to address certain conduct of the past and ensure that Ranbaxy moves forward with integrity and professionalism".
He went on to say that “all Ranbaxy products currently in the global market are safe and effective", adding that "we have made significant improvements in the way we conduct our business to ensure greater quality control". The firm has made investments of over $300 million in its manufacturing facilities "to install state-of-the-art technologies".
Mr Sawhney concluded by saying that "we have also instituted a rigorous new code of conduct for all Ranbaxy employees, with clear accountability for compliance".
Daiichi Sankyo critical of ex-management
Daiichi Sankyo, which owns a majority stake in Ranbaxy, said it continues to support the company "in its efforts to address and correct the conduct of the past" which led to the investigations in the USA. It said that "these efforts include significant changes to Ranbaxy’s management, culture, operations and compliance".
However, the Japanese drugmaker went on to say it "believes that certain former shareholders of Ranbaxy concealed and misrepresented critical information concerning the DOJ and FDA investigations". Furthermore, Daiichi Sankyo added that it is currently "pursuing its available legal remedies and cannot comment further on the subject at this time".
Daiichi Sankyo bought a 63.9% stake in Ranbaxy for $4.2 billion in 2008 from the controlling shareholder group, led by brothers Malvinder and Shivinder Singh.