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No "Jai Ho" For India's Ranbaxy

Slumdog Millionaire
AP
Slumdog Millionaire

I read the other day that the loose translation for "Jai Ho," the title of the Academy Award-winning, catchy, uplifting closing-credits song in "Slumdog Millionaire" is victory.

One of the backdrops for this year's "Best Picture" is a so-called boiler-room where Indians using American-style aliases and attempting to mimic American accents work as customer service representatives. It's big business and part of a well-documented outsourcing trend. Unfortunately, I'm all-too-familiar with boiler rooms.

I'm almost embarrassed to admit that one summer during college my huckster of an uncle recruited me to work for him making cold calls out of the yellow pages selling "Las Vegas vacation certificates" to business owners as employee incentives. I worked on commission and made a grand total of around 90 bucks in three months. They were sent out C.O.D. and, of course, most of them came back. I hated it, but chalked it up to life experience. I'm not entirely certain whether it was a scam, but if it was I am certain the statute of limitations has long since run out. At the time, it was a regular staple of local TV news investigative reporters to show police rounding up boiler room workers. I'm glad my uncle's operation folded before anything like that happened.

Anyway, another still-burgeoning business in India is the manufacturing of generic drugs.

Recently, there've been scattered media reports about some of those drugs polluting slum water in alarming concentrations, according to some experts. Separately, yesterday, the U.S. Food and Drug Administration announcedit's keeping India generic drugmaker Ranbaxy in the penalty box while it continues looking into whether the company fudged some data.

The agency says there's no evidence that the drugs aren't safe, but until Ranbaxy straightens things out it can't send any more product over here or get any new products approved. A Japanese drug company recently bought Ranbaxy. Dr. Reddy's, which is not in trouble with the FDA, is the biggest Indian generic drugmaker that trades stateside.

Despite the issues currently facing Ranbaxy and environmental concerns about manufacturing standards in India, making drugs in that country for American patients could become increasingly popular as pharmaceutical companies continue to cut costs and more big-selling, brand-name pills go generic over the next few years.

That might make bottom-line conscious investors sing, "Jai Ho," but I'm not sure patients will feel the same.

Questions? Comments? Pharma@cnbc.com