FDA’s action against Ranbaxy will cost US consumers

Indian drug-maker Ranbaxy Laboratories Ltd. was supposed to introduce three long-awaited generic versions of blockbuster branded products that could potentially save American health-care payers millions of dollars but problems related to regulation and manufacturing standards are delaying the launch of the generic drugs for now, according to the Wall Street Journal.

One of them, heartburn drug Nexium, is one of the biggest generators of revenue for AstraZeneca but the exclusivity of its patent expired in May. The generic version of the drug is not available yet because of manufacturing problems at Ranbaxy's facility. Another example of an expired patent that still drives significant revenues to its maker, Swiss giant Novartis AG, is blood-pressure treatment drug Diovan, the generic version of which was supposed to be launched in 2012. And last year Ranbaxy was expected to start producing a generic version of Roche Holding's treatment for eye infection in AIDS patients, called Valcyte. Both of these were delayed because of the same problems that led the U.S. Food and Drug Administration to withhold clearance for Ranbaxy's production, the Wall Street Journal reported.

According to health insurer Excellus BlueCross BlueShield, delays to these three drugs could cost up to $125 million annually just in the 39 counties of upstate New York. Once generic versions of a branded drug are put on the market, costs can go down by up to 80 percent, the insurer said.