USFDA tough stance a blow for Indian drug cos

Written by Reghu Balakrishnan | Mumbai | Updated: Jun 28 2009, 02:59am hrs
With the USFDAs raids at Sun Pharmas facilities in the US, the list of the Indian pharma majors under the US FDA scanner is becoming longer. Though the industry doubts whether India is being targeted, experts are of the view that these developments are part of the FDA strengthening their monitoring processes. FDA-approved plants of Ranbaxy, Lupin and Sun Pharma are under the scanner. India has the largest number of USFDA approved plants outside the US, at 70.

Ranbaxy Laboratories has been at the receiving end of FDA ire in a major way. In 2006, the FDA, which had found violations at company's Paonta Sahib facility in Himachal Pradesh, issued warnings to the company, and in September 2008, banned more than 30 generic drugs, citing poor quality in its factories in Dewas and Paonta Sahib.

FDA inspections found violations that could lead to contamination, allergic reactions and the company had not taken proper steps to correct them, FDA officials said. Daiichi Sankyo, which had acquired Ranbaxy, has formed a team to address the data falsification charges accused by the FDA and other issues. Lupins Mandideep plant also reportedly violated FDA norms, following FDA inspections during 2008.

According to Ranjit Kapadia, VP of institutional research, HDFC Securities, the recent developments could not be seen as targeting Indian companies. He said, Recently, the Obama government has allocated an additional budget of $300 million to the US FDA in order to improve the services. With this allocation, they have started recruiting more inspectors and tightening the inspections on US FDA approved facilities. Totally, FDA allowed $2.4 billion to boost their performance this year. US FDA had recently announced plans to set up offices in Mumbai and Delhi this year to strengthen its monitoring efforts.

Sarabjit Kaur Nangra, VP-research at Angel Broking, said, It's difficult to say whether there is an underlying motive to target Indian companies or who is behind such a motive. Overall, Indian companies have been maintaining proper manufacturing standards. But in the present context, certain breaches have been found, which has led to the USFDA action.

The recent inspections and the warning letters had affected the sales of Caraco. Daniel H. Movens, CEO, Caraco, had said, The recent voluntary recalls previously disclosed have had a negative impact on the company's performance and may continue to have a negative impact in the near term.

Kapadia said, US-based drug companies had accused FDA of giving advanced intimation for the inspections for the FDA plants outside the US. Now, FDA is in the process of closing the loopholes related with inspections.

Tightening noose

FDA inspections found violations that could lead to contamination and allergic reactions

The US govt has allocated an additional $300 million to USFDA

USFDA recently announced plans to set up offices in Mumbai and Delhi this year