Pharma companies face spurt in regulatory issues from US health regulator

The tight regulatory vigil by the US Food and Drug Administration (USFDA) has become a major concern for the pharmaceutical industry.

Of late, there has been a spurt in the negative observations during plant inspections for approvals as well as issue of warning letters for the major companies.

Just to give a perspective, three top pharma majors based out of Hyderabad, Dr Reddy’s Laboratories, Aurobindo Pharma and Divis Laboratories have been facing one issue after another in the plant inspections/approvals from the US regulator.

For Dr Reddy’s , which has a turnover of over ₹14,000 crore with a lion’s share of it coming from the US market, the USFDA has been a constant source of trouble from 2015 when it received warning letters for three of its plants, including two API units and one cancer products facility.

Even after recent re-inspection by the US regulator, Dr Reddy’s still faces ‘significant observations’ on its Duvvada plant. A fresh addition to the list of units with observations is Bachupally unit which had got 11 observations from the USFDA after its inspection last month.

When asked why there was a spurt in negative observations on India plants by the USFDA, GV Prasad, Co-Chairman & CEO, Dr Reddy’s, said: “They are happening all over the world.’’

For Aurobindo too, the sailing has been tough. Its unit III at Bachupally which makes oral formulations attracted six observations on procedural aspects last month. This was followed by another seven observations on its Unit IV (for injectibles & ophthalmic products). Both are Form 483 type of observations.

The US FDA issues a form 483 to drug companies if it spots any condition that in their judgment may constitute violations of the US Food Drug and Cosmetic Act and related Acts during inspections.

Another firm, Divis Laboratories has received an import alert and warning letter on one of its units in Vizag on some products being made from the facility. The company has been addressing the issue and the USFDA, however, has later exempted several products from the alert.

Lupin has also been issued some observations on its facilities in Goa and Aurangabad by the US watchdog recently.

The impact of these developments on a company’s business has been diversified and also involves cost of remediation.

For obvious reasons, industry players have been maintaining that there is nothing ‘abnormal’ and Indian companies have always been focussing on quality.

“As we (Indian pharma industry) produce more and more volumes, issues tend to come up. Most of the issues being raised by the USFDA are only Form 483 issues which are not serious and could be addressed within a short span of time,’’ M Madan Mohan Reddy, Chairman, Pharmaceutical Export Promotion Council (Pharmexcil) and Executive Director, Aurobindo Pharma, told BusinessLine in a recent interaction.

As per pharmexcil data, pharmaceutical exports decreased to an estimated $16.4 billion during the financial year ended March 31, 2017, against $16.89 billion in 2015-16.

There are over 700 drug makers registered with the USFDA and about 30 per cent of total Abbreviated New Drug Applications (ANDAs) are from India. The number of USFDA-approved plants are about 400.

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