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FDA warnings create woe for Indian drugmakers

Published on 10/11/15 at 10:35am
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Recent enforcement action has taken its toll on the fortunes of several Indian pharmaceutical manufacturers, with Sun Pharmaceuticals and Dr. Reddy’s Laboratories hit hardest.

Sun’s sales in the US, its largest market, fell 28% to $510 million compared to the same quarter last year. This was due largely to supply issues from a key plant that the US regulator hit with an Official Action Indicated (OAI) status, after finding issues during an inspection last year.

The FDA issued a Form 48 for the Halol facility after finding a number of problems with manufacturing processes, which Sun Pharma's managing director Dilip Shanghvi said the company is currently addressing during a conference call to present the firm’s financial results.

However, this process has restricted supply and also prevented products made at Halol from gaining US approval, while Sun faces rising remediation expenses.

The FDA approved Elepsia XR for epilepsy in March, before reversing its decision as the plant was not up to standard on the date of approval. Adding to the company’s problems, Halol is not the only Sun Pharma plant that has been forced to raise standards. Four additional manufacturing facilities – gained from Sun’s $4 billion acquisition of Ranbaxy earlier this year – are currently banned from shipping products to the US, due to manufacturing issues.

Dr. Reddy’s

Meanwhile Dr. Reddy's Laboratories revealed on Friday it had received a warning letter from the FDA for three of its key plants.

In a statement, the Hyderabad -based company said the complaint related to its Active Pharmaceutical Ingredient (API) manufacturing facilities at Srikakulam and Miryalaguda, and its oncology manufacturing facility at Duvvada, following inspections in November 2014, January 2015 and February 2015 respectively.

Dr. Reddy’s did not disclose the specifics of the complaints, but said it would work hard to address the issues raised.

Chief executive G V Prasad says: “We take quality and compliance matters seriously and stand by our commitment to fully comply with the cGMP quality standards across all of our facilities. We will respond with a comprehensive plan to address these observations within the stipulated time-frame of 15 days. We will continue to actively engage with the agency to resolve these issues and we have also embarked on an initiative to revamp our quality systems and processes, as an organisation-wide priority.”

The US accounts for an even greater proportion of Reddy’s sales than Sun Pharma’s: more than 50% at $1.2 billion, and the company’s growth prospects could be slowed considerably by the supply issues.

Other companies affected by increased FDA scrutiny on Indian manufacturers are Wockhardt, Ipca, and most recently Megafine, which have all had plants banned from shipping products to the US.

The regulator began paying closer attention to Indian manufacturers around a decade ago after being alerted to the fact that Ranbaxy plants had frequently faked drug-testing data. This led the Administration to open an office in the Asian country.

Joel Levy

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