The last few months have seen several drugmakers outline remedial measures that they are undertaking, following action by the US regulatory authority.
The US Food and Drug Administration, and other local and foreign regulators, come knocking on the doors of drug companies to inspect manufacturing plants that make products soon to be sold in their respective countries. And it goes without saying, compliance is key, especially so for India, a major producer of medicines for multiple countries.
But even a fleeting glance at recent statements to the stock exchanges reveal USFDA directives that range from serious import alerts, warning letters or OAIs (official action indicated) to “Form 483” observations. And the companies receiving these directives include Glenmark, Lupin, Sun Pharma, Cipla, Panacea Biotec and Jubilant Pharmova, to name a few. In fact, in August, Wockhardt said it was shutting down its Illinois plant in the US, and looked to continue making products for the region, by outsourcing its manufacturing. The site had received “483 observations” and warning letters from the USFDA and had entered into a Consent Decree with the Department of Justice which resolves and settles all matters with the USFDA, it had said.
Changing dynamics
A revival of USFDA and other regulatory inspections was expected this year, as Covid-19 linked travel curbs were eased. But warning letters and OAIs are directives that Indian drugmakers can ill afford, say pharma-industry veterans, given their global footprint and the changing world dynamics.
There was a lull in inspections during the peak of the pandemic and there is a revival in inspections now, observes Sujay Shetty, PwC’s Global Health Industries Advisory Leader. “But companies will have to up their game, as there is an increased focus on quality,” he says, for multiple reasons. Less expensive generic drugs will become important, as Governments are faced with limited funds to spend. During the pandemic, several Governments have given onshoring support to local companies to make products locally, he says, to not be entirely dependent on foreign companies. And, the Gambia-incident, potentially linked to paediatric syrups made by a company from India, could also contribute to increased scrutiny.
Not just one-time
Industry-insiders, speaking off-record, point out that several large drugmakers in the country have been investing in quality compliance measures and many have been clearing regulatory inspections, as well. But compliance is not a one-time investment and requires continuous attention, they point out.
Clarity is awaited on the deaths in Gambia being possibly linked to consumption of a product made from India, an industry-hand says. And while there’s no taking away from the gravity of that issue, the lesson for Indian drug companies is to ensure that such incidents – involving possibly adulterated raw material and dodgy record-keeping - do not happen on their watch. It becomes a concern when all of industry is tarred with the same brush, without distinguishing between companies with established practices and the rest, they point out.
Another fallout from this incident, is the concern on local regulatory inspections and how companies are able to slip through the cracks in the framework, says an industry-veteran, calling for strengthening of the Indian drug regulatory framework to build greater confidence.
Skills issue
In September, a Motilal Oswal Financial Services report indicated to a regulatory overhang for drugmakers looking to sell into the US generics market, as inspections revived.
India witnessed 38 USFDA inspections over the 12-months (up to September), the report said. “Of these, four sites have received OAI (Official Action Indicated) citations. Around 18 inspections are awaiting citation (or an outcome) from the USFDA. Indian sites have received 60 OAI citations over Sep’19-Sep’22. Of these, 50 are yet to be re-inspected,” the report said, pointing to unresolved OAIs. India has about 665 production sites approved by the USFDA, the largest in the world.
But does it have to do only with a revival of inspections or is something amiss?
A veteran regulatory-hand explains, it’s largely a “skill issue” that results in large companies continuing to trip-up, despite the management’s stated commitment to quality compliance. The more the products in the portfolio, the more complex it becomes, he says, adding that it requires repeated training of staff. In fact, companies are looking to take in trained hands with pharmaceuticals-linked qualifications and they are having regulatory requirements translated into the vernacular languages as well, to ensure that instructions are understood in their entirety, he added.
Manufacturing continues to strive for less defects, across geographies, sectors and companies, says an industry-hand and on that count the pharma industry has its task cut out. Remediation efforts take time and that would delay product approvals from the said plant etc, impacting its operations and revenues. More importantly, though, this industry has to do with making medicines and saving lives. And that makes it all the more critical to have their operations upto scratch, he adds.