 "Deferment of FTA talks boosts morale of GVK Bio, pharma industry")
Though clinical studies contributed hardly 10 per cent to the company’s total revenues, the very reputation of the Hyderabad-based discovery research and development (R&D) company was hit so hard by the European drug regulators’ claim that there was data manipulation at one of its sites.
To reclaim its reputation as an organisation with high ethical and quality standards, the company had stopped taking any more orders on clinical studies until its name gets cleared in the alleged data integrity issue. “More than the business, our very reputation has been hit by these claims without any wrong doing on our part,” a GVK Biosciences official told Business Standard on condition of anonymity. The official said it was still unclear as to how things would pan out for the industry in the aftermath of the EU ban.
Ranjit Shahani, vice-chairman and managing director, Novartis India Limited said more than loss of business, it is a huge blot on the reputation of the national pharma industry — a reputation built assiduously over many years as being the “pharmacy to the world.” It takes years to build this reputation and only a moment to destroy, said Shahani.
In December last year, GVK Bio chief executive officer Manni Kantipudi said it was a body blow that they had taken.
The indications are that the government was expected to go beyond the deferment of trade talks to mitigate the impact of the EU ban. Union Commerce Secretary Rita A Teaotia is holding a meeting on this matter on Friday to discuss further steps. The ministry also invited the industry representatives to this meeting. Some of the sources attribute the origin of all this controversy surrounding the ECG data manipulation to ‘one of the disgruntled scientists’ who had earlier worked in GVK Bio.
GVK Bio, one of the largest research and contract manufacturing organisations of its kind in Asia with close to 2,400 scientists and staff on its rolls, has two clinical study facilities, one in Hyderabad and the other one in Ahmedabad, located outside their main research facilities.
While the Hyderabad facility came under scanner in May 2014 after the French drug regulator ANSM cited discrepancies in the ECG reports of volunteers engaged in some of these bioequivalence studies, the Ahmedabad facility has the US Food and Drug Administration (USFDA) approval.
As soon as the European Medicines Agency (EMA) endorsed the French regulator’s audit report, GVK Bio announced that it would redo all the studies at Ahmedabad facility at its own cost. However, the pharma companies had re-conducted these studies elsewhere and furnished fresh data to the EMA and other regulators to get their products cleared from the suspension list.
Meanwhile, except for the clinical studies, there was no impact whatsoever on the company’s other verticals, said company sources. In July this year, the company had even announced the extended collaboration with Melbourne-based clinical stage biopharmaceutical company Akaal Pharma Private Limited for a scale-up of its novel topical AKP-11 ointment to support Phase II clinical study in psoriasis.
GVK Bio provides a broad spectrum of services across the research and development and manufacturing value chain. The company's capabilities include drug discovery services at much lower costs than in the developed world, clinical development, contract manufacturing, formulations and informatics. The size of clinical studies business was around Rs 60 crore out of Rs 600 crore-Rs 700 crore revenues it was receiving till last year.
Deferment of trade talks just a first step: Pharmexcil
Pharmaceutical Export Promotion Council (Pharmexcil) Director General P V Appaji said the government action on trade talks with the EU was just a first step in securing the interests of the Indian pharmaceutical industry.
“Our commerce secretary is holding a meeting on this matter Friday involving the industry people to discuss further steps,” Appaji told Business Standard. However, he refused to elaborate on what those further steps could be. Appaji said ban on products tested at GVK Biosciences was an unfair action taken by the EU even after the company and other regulators presented the actual facts before the European authorities. “Government’s seriousness on this matter is very evident. We want all steps to be taken to protect the Indian pharmaceutical sector from any adverse impact,” he said.
The alleged data integrity issues levelled against GVK Bio were perceived as an issue faced by an individual company until when Pharmexcil recently said the EU ban would impact the Indian exports to the extent of $1.2 billion. Most of these products, though owned and marketed by the MNC firms, were sourced from Indian manufacturing facilities.
“The deferment of FTA talks is a negotiating posture — as the EU-India FTA is predicated on many other larger issues of differences i.e., the quality of IP protection versus the amount of agricultural subsidy in Europe… we are ending up having debates — not dialogues,” Shahani of Novartis said.
EU ban is a definite setback on future earning potential: PwC
Indian pharma export is already going through a regime of tight scrutiny by US FDA and the sweeping ban by the EU is a definite setback on future earning potential. Any importer has a right to be concerned but there should be a scope for corrective measures, said Sujay Shetty, leader of pharma, lifesciences and medical devices practice at PwC.
Ban created a negative perception about Indian pharma industry: IPA
“The EU’s ban on the 700 drugs has created a negative perception about the Indian pharma industry and we compliment the Indian government for taking a tough stance. If we do not challenge the EU move now, we will continue to face such arbitrary actions in future and that will hurt the industry,” said D G Shah, secretary general of Indian Pharmaceutical Alliance (IPA).
No material impact: Lupin
“The development has no material impact on Lupin whatsoever. Of the 700 products that the EU has withdrawn, we just had three products and bioequivalence was repeated on two in another laboratory and the products were found to be in full compliance while the remaining one product received a bio waiver,” said Lupin spokesperson Shamsher Gorawara.
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