Inviting Higher Risks By Challenging FDA

Are Indian drug exporters gearing up for challenging the US Food and Drug Administration on its “wrong doings”? If the industry sources are to be believed—yes, a massive campaign is afoot in the local pharmaceuticals industry against the big regulator, which has tightened its scrutiny on the manufacturing standards compliance level of Indian export units of late. The top drug makers in the country (most of them are already under the US regulatory scan) are joining hands to agitate against a series of ‘flaws’ that they have found in the action procedures initiated by the FDA in the recent period.

The industry captains allege that the FDA does not follow systems while conducting audits and follow-up actions and it doesn’t respond on time to company replies.

The US regulator, which has been comparatively more active in flagging the non-compliance issues (non-adherence to quality manufacturing standards or current good manufacturing practices (cGMP) set by US FDA to ensure quality of medicines exported to US) at Indian drug manufacturing units, especially after the foreign regulator increased its local inspection team a couple of years ago, had issued more number of negative observations or 483s and import alerts in the last 12 months.

Although many of the big pharma companies in India, including the largest drug maker Sun Pharmaceutical Industries Ltd, are already reeling under the pressure of the stringent FDA action for sometime now, a few others including Dr Reddy’s Laboratories Ltd, Cadila Healthcare Ltd, Wockhardt Ltd were the latest ones who faced fresh round of negative observations from the US FDA in the last few months.

These regulatory alerts are part of a routine exercise for a vigilant FDA in not only India but also in many other countries including the US. But, an import alert or negative observation from the US regulator is so critical for Indian drug makers, as most of them earn more than 50 per cent of their revenues and at least 70 per cent of their profits from the US, the world’s largest market for drugs and pharmaceuticals in value.

It may be recalled that Ranbaxy Laboratories Ltd, once the flag bearer of Indian generic drug industry and the largest drug maker of the country, just ceased to exist after its US export units in India came under the FDA scan. It lost more than half of its revenue all of sudden after an import alert issued by the US drug regulator in 2008, and the related charges and costs caused erosion of its net worth to one fourth in the following years and finally vanished through a desperate sale deal.

Indian drug makers haven’t learnt the lesson yet. Rather, they still live in the myth of “anything can be manageable” attitude. There are two key reasons for this attitude. Firstly, the typical Indian regulatory culture, where they never experienced the heat of strict compliance practices and second is the human error factor that was always ignored by the management.

As it is already known in the public, several of the negative observations by FDA in the Indian pharmaceutical plants were related to hygiene issues, improper maintenance and wrong entries in plant registers, findings of impurities such as human hair in the formulation process, last minute corrections and over writings in process validation records among others. For Indian companies, these are simple human errors, which they are used to not only in factories but also in daily life. While the companies are capable of jumping those errors by managing the local authorities who either close its eyes on such ‘negligible’ issues or fail to see these errors as major cause of concern, it becomes impossible when it comes to a regulatory system such as US FDA that is far more advanced and uncompromised.

It is an open secret that Indian pharmaceutical companies maintain different sets of quality standards in manufacturing process. While the lower standards are maintained for India and poorer export markets, they keep better standards for developed markets. But, since the mindset remains stuck on escaping the standards wherever it is possible to save cost and maximise profit, the industry often gets exposed with strict regulatory audits.

But, the current move to challenge such regulatory inspection and actions out of the natural tendency of revolting when you are caught will only result in higher risks. So it’s going to be suicidal if the industry adopts a negative stand by challenging the FDA instead of upgrading itself into a better system.