All you wanted to know about...US FDA FORM 483

The Indian pharmaceutical industry has been through a tough time. One major pain point is regulatory clampdown, especially from the US FDA (Food and Drug Administration). Issuance of Form 483 observations, warning letters and import alerts from the FDA poses a key risk for Indian pharma companies exporting drugs to US. Form 483 is generally the first indication of trouble.

The FDA exercises authority for inspections of facilities in foreign countries which supply pharma products to the US. So, pharma plants in India that export to the US must adhere to the cGMP (current good manufacturing practices) as per FDA guidelines. FDA officials often visit the facilities to check compliance with the rules.

FDA issues Form 483 at the completion of inspection. If it finds deviations from cGMP, it is mentioned in the Form 483. The form specifies areas in which the facility fell short of regulatory expectations. It is then presented and discussed with the management of the company. Along with the Form 483, the FDA also issues an Establishment Inspection Report (EIR) which specifies whether action is required to be taken.

The FDA calls for a response to the Form 483 observations within 15 working days. Though a written response is not mandatory, it is preferred so that a warning letter can be avoided. The company has to respond to the observations in detail with reasons for the shortcomings and corrective action plans. Each observation should be addressed individually.

If the management does not convincingly address the Form 483 observations within the specified time period, the FDA issues a warning letter. Sometimes, if the observations are of a severe nature, the FDA may issue a warning letter even without issuing Form 483. Unsatisfactory response to the warning letter could lead to further action including import alert for products or the facility, withholding of product approval, and suspension or cancellation of manufacturing license.

The US of A is the major market for several Indian pharma companies. In the not-too-distant past, many Indian pharma companies grew strongly, thanks to high exports to the US. In fact, Indian companies have become dominant players in the US generic drugs space. Many pharma companies in the country have made major investments in facilities with the hope of continuing export growth to the US. But over the past few years, there has been an increase in the issue of Form 483s which further led to warning letters. Over the past four years, India received the highest number of warning letters issued to a single country. Also, the number of warning letters received by Indian companies has increased over these years. The timeline for problem redressal and re-inspections have also lengthened.

If the regulatory crackdown continues, it could put a question mark on the growth story of many such companies. Quick, satisfactory redressal of Form 483 observations is therefore important to stop further escalations to warning letters and more.

If you have invested in pharma stocks, it makes sense to keep a close watch on FDA inspections and outcomes. Many pharma stocks have taken a beating in the recent past due to adverse Form 483 observations and their escalations into warning letters and import alerts. On the other hand, getting FDA clearances after re-inspection of facilities have seen pharma stocks rally sharply.

Prevention is better than cure for pharma to get back to form.

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