The Mexico plant of the second largest domestic pharma firm by sales, Dr Reddy?s Labs, which received a warning letter earlier this year from the US Food and Drug Administration (FDA) is awaiting an inspection of the US drug regulator after having taken the corrective steps.
In July, the FDA imposed a ban on products made at the plant by slapping an import alert on the Mexico facility. ?We have addressed all the deficiencies cited by the FDA by early November. We have then requested for a re-audit to be undertaken by the regulator. At present, the ball is in FDA?s court but we hope to get this matter resolved soon by offering our utmost cooperation to the drug regulator,? a senior company official said. The concerned Mexico plant contributed sales of around $60 million to the pharma company?s annual revenue. However, the FDA made an exception for a specific API and exempted a product called Naproxen, which the company was allowed to market from its facility, otherwise put under import alert. This product incidentally accounts for 50% of the total sales emerging out the Mexico facility, reducing the potential overall year financial impact to around $30 million. This API is used in drug formulations that treat pain or inflammation caused by arthritis, ankylosing spondylitis, tendinitis and gout.
Dr Reddy?s had acquired its Mexico plant from Roche in 2005 for $59 million, along with 18 products, that includes mature APIs and a range of intermediates and steroids. For the company, troubles at the Mexico facility began when it faced FDA inspection during early November 2010.
The firm responded to FDA?s questions by early December in 2010. Dissatisfied, the FDA sent a warning letter to Dr Reddy?s by early June. The company responded within the stipulated period of a fortnight. However, the FDA went ahead and imposed an import alert on the Mexican facility under the category of ?detention without physical examination of drugs.? Subsequently, the company claims to have completed its commitments to its satisfaction by November 9, 2011 and written to FDA seeking a re-inspection, which is now due.
More recently, the company introduced a voluntary retirement scheme at its Mexican subsidiary as part of its larger cost cutting endeavour to make the organization leaner and fitter. Similar staff trimming exercises also have been undertaken in India and its German arm of Dr Reddy?s .