Sun Pharma's takeover of Ranbaxy Laboratories is not sitting well with some of the latter's sales reps, who are threatening an all-out strike later this month.
Around 500 reps are planning a nationwide strike on September 26, alleging that Sun Pharma has failed to pay salaries and reimburse travel expenses in the last three months, according to a report in the Business Standard.
They are also upset about changes to their entitlement to paid leave--with all employees at the company now working under a uniform Sun Pharma contract--as well as what are described as "arbitrary transfers" of staff among locations. In some cases, these transfers have sent reps to work in areas where they do not speak the local language, and the Standard suggests 300 have already resigned from the company as a result.
The disgruntled workers have taken their complaint to the Bombay High Court, although Sun Pharma has declined to comment on the situation ahead of the outcome of that litigation. The all-India strike follows smaller-scale protests by employees in various parts of India.
Sun Pharma agreed to buy Ranbaxy from former owner Daiichi Sankyo in 2014 and completed the $4 billion deal last year. The Japanese drugmaker had bought its stake in Ranbaxy in 2008 but decided to offload the company 6 years later after losing patience with regulatory problems at the Indian company, which persist to this day.
The intervening months have seen Sun Pharma struggle to integrate the two companies and upgrade four Ranbaxy plants that have been banned by the FDA for failing to meet quality standards. Legal fees, high staff costs and a write-down of about $94 million have damaged profitability at the company.
Sun Pharma's takeover of Ranbaxy made it the largest Indian drugmaker selling into the U.S. market and the fifth-largest generic company globally, with combined annual sales of around $4.2 billion. The company has been striving to cut about $250 million in costs from the combined operations over a three-year period.
The revolt by former Ranbaxy reps comes at a time when working conditions for pharma industry workers in India have been thrown under the spotlight by the apparent suicide of a rep working for Abbott Laboratories. In a note found after his death earlier this year, 35-year-old Ashish Awasthi said he was struggling to handle pressure to meet sales targets.
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