It may not seem like a great showing for Indian drug companies as Cadila Healthcare and Dr Reddy's Laboratories came in for the rap from the United States regulatory authority in separate developments.
However, seasoned pharma industry-watchers say there is no reason for undue worry as such “occupational hazards” were expected when Indian companies expanded their global footprint.
The Gujarat-based Cadila Healthcare received a warning letter from the US Food and Drug Administration following “pre-approval” inspections at a section of its Moraiya facility in Gujarat. The regulator said the company had violated certain manufacturing practices at the plant.
Meanwhile, Hyderabad-based Dr Reddy's Laboratories saw its Mexican facility being put on an import alert — blocking the sale of products from this facility to the US.
Cadila and DRL join a long list of domestic drug-makers, including, Claris Lifesciences, Aurobindo, Ranbaxy, Sun Pharma and Lupin, who have come in for a rap from the FDA in the recent past and have resolved or are in the process of resolving the issues raised.
“It is a fact that the US regulator has become more stringent in its quality inspections on manufacturing facilities over the last few years. But it's not just Indian drug-makers that are under the scanner but multinationals too,” observes Ms Sarabjit Kaur Nangra of Angel Broking.
Echoing a similar sentiment, Mr Sanjiv Kaul, Head of investment firm ChrysCapital, added, that it was statistics at play — as drug filings for approvals increase in the US, it follows that the warnings and import watches would also increase. It is an occupational hazard, he said, adding that he was not unduly worried.
Responding to the development, Cadila said the warning letter came following an inspection that would have allowed the company to sell injectable drugs in the US. But since the section of the facility was not yet operational, there would be no financial impact, a company spokesperson said.
Ms Nangra agreed that there would be no immediate financial impact as the launch from the facility was still a year or more away. As for DRL, she said, the Mexican facility contributed about four per cent of the company's turnover. Industry sources peg the impact at about $60 million.
However, much would also depend on how quickly the companies are able to resolve the issues at hand, added another industry representative, as companies such as Ranbaxy, for instance, are still to resolve serious concerns raised in 2008.