Sawhney said that Ranbaxy, majority-owned by Japanese drugmaker Daiichi Sankyo, will introduce a "biosimilar" cancer treatment in India next year and follow up with at least two other biosimilars in the same market over the following year or two.

The company's goal is to seek initial approval for all the drugs in India and then pursue approval within four to five years in Europe and the United States.

Like other biotech medicines, biosimilar drugs are made in living cells through a costly and time-consuming process. Ranbaxy currently sells only one biosimilar, a copycat form of Amgen Inc's Neupogen, used to prevent infections following chemotherapy. The Ranbaxy product is sold in India.

Sawhney said two of Ranbaxy's chief rivals, Israeli drugmaker Teva Pharmaceutical Industries and the Sandoz unit of Swiss drugmaker Novartis, already have expertise in biosimilars. Ranbaxy hopes to eventually compete with them in the potentially lucrative business, he said.

The biosimilar Ranbaxy plans to introduce in India next year, Sawhney said in an interview in New York, has the potential for global annual sales in the hundreds of millions of dollars.

"The attractiveness of biosimilars, regardless of the product, is you'll always have limited competition because of the complexity and the investments required" to make such medicines, he said.

Other drugmakers, including Merck & Co, are racing to develop biosimilars even though the U.S. Food and Drug Administration has yet to announce formal guidelines for how biosimilar medicines should be tested and marketed. Europe has already released such guidelines.

"Of the top 10 drugs in the world, more than half are biotech drugs and probably seven of the top 10 will be by 2015. That tells us the importance of being present in the biosimilar space," Sawhney said. "If we want to remain a serious (industry) player, inherently we must be competitive."

Sawhney became chief executive in 2010, a year after the FDA forbade shipments to the United States of generic medicines made at two Ranbaxy factories in India that were cited for quality-control lapses.

Shipments from the plants resumed in April, after Ranbaxy agreed to terms of a consent decree with the FDA. It mandates quality-control inspections of the Ranbaxy plants by an external auditor.

Ranbaxy Chairman Tsutomu Une, also in an interview, said the quality-control issues - which largely involved poor documentation of procedures - were an embarrassment for the Indian drugmaker.

"This must never happen again," said Une, who has a seat on Daiichi Sankyo's board of directors.

(Reporting By Ransdell Pierson; Editing by Tim Dobbyn, John Wallace and Steve Orlofsky)

• A Permanent Economic Emergency