Are the US Food and Drugs Administration (USFDA) being needlessly harsh on Indian pharmaceutical companies? Are Indian companies being victimised, given their rising presence in the US pharmaceutical markets? Have Indian pharmaceutical companies come under the microscope after Novartis lost the Glivec patent fight in Indian Supreme Court? As news of more Indian companies being penalised appears, general tendency is to blame the US FDA.
Spate of ‘import alerts’, export bans and warning letters (Form 483) over the past few months have surprisingly increased. Ranbaxy is the favourite whipping boy of US FDA, probably committing and being booked for every crime in the book. It has recently being whipped for not behaving despite being issued a warning letter (Form 483) for its newly commissioned Mohali plant.
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Before passing any judgement let’s take a look at the crime Indian companies are accused of. Indian law requires that pharmaceutical companies follow what is commonly known as General Manufacturing Practice (GMP). In order to sell their products in the US market they need clearances from US authorities, in this case US FDA. Now, US FDA is much more stringent both in terms of quality of products as well as operations, record maintenance and housekeeping.
While most Indian companies are able to meet the quality standard, they generally err when it comes to meeting other parameters. Further, in the urgency to be the first-to-file so that they get the benefit of exclusivity of selling a product in the US market when it goes off-patent, companies tend to use shortcuts. Ranbaxy was accused of fabricating data so that it could rush and be the first with its file at the counter and get the 180 day exclusivity, which it did. But unfortunately for Ranbaxy a whistle blower gave away the inside story and the company had to pay a heavy penalty.
Even its recent import alert has come after the company was issued a warning letter (Form 483). Ownership of Ranbaxy has changed but its confrontation with US FDA continues. The new promoters have overhauled its senior team however industry experts say taking shortcuts is in the DNA of the company, which is why there is something or the other that is always overlooked. This is enough for the US FDA to flag it.
Analysts tracking the sector often quote Ranjit Sahani, CEO of Novartis when referring to US FDA. Sahani says the credo of US FDA is ‘In god we trust, rest we audit’. US FDA has a fixation for auditing. The entire process of evaluation of a company and its products and manufacturing process is first thoroughly audited before its team of inspectors visit the facility. Here the documents submitted by the companies will have to match with the facts on the ground. Housekeeping has extra weightage. Wockhardt realised it after inspectors found torn data records in a waste heap and urinals that emptied into an open drain in a bathroom six metres from the entrance to a sterile manufacturing area.
US FDA is justified in its obsession for auditing and quality. India accounts for nearly 40 per cent of generic drugs sold in the US. This is going to increase going forward as Obamacare is rolled out. It has a right to check what enters their country. US is hoping for more exports from India which will not be too costly for its taxpayers, which is why US FDA has geared itself up by adding 7 inspectors to its existing team of 12 inspectors based in India. It’s up to Indian companies to match their expectations.
The cases that are objectionable are few and far between. In the current year itself Indian companies have received 110 approvals for new generic drug, these accounts for 40 per cent of all drugs approved by the US.
For those who still feel that Indian companies are being victimised, may note that Ranbaxy was allowed to sell its product in the US despite the issues brought to the notice of US FDA on its irregularities. It was given a priority clearance for the top selling drug in the world, Lipitor, which belonged to a US company, Pfizer.
