USFDA scrutiny delays generic drug approvals for major Indian pharma firms

Big Pharma companies Cipla, Sun Pharma, Aurobindo Pharma, Dr Reddy's, and Lupin face intense scrutiny from the US Food and Drug Administration (USFDA)

Regulatory scrutiny by the US Food and Drug Administration (USFDA) has significantly impacted the approval rate of new drugs from major Indian pharmaceutical companies in the first quarter of the financial year 2024-25 (FY25). The number of abbreviated new drug applications (ANDAs) approved fell to its lowest level in eight quarters, according to a report by the Times of India.

Regulatory approvals and USFDA inspections

Companies like Cipla, Sun Pharma, Aurobindo Pharma, Dr Reddy’s, and Lupin are facing intense scrutiny from the USFDA, including inspections and warning letters. For instance, Aurobindo Pharma saw a sharp decline in new approvals due to regulatory issues at its unit III manufacturing facility. The company has a total of 507 ANDA approvals, including 488 final approvals and 19 tentative approvals.

 

In May of this year, Aurobindo Pharma received seven observations for its unit-II formulation manufacturing facility in Bhiwadi, Rajasthan, adding to the three observations for its new injectable facility in Andhra Pradesh earlier.

Meanwhile, Cipla, in June, received six inspectional observations in Form 483 after a USFDA inspection of its Goa facility. The company said it was committed to addressing these within the stipulated time frame, in a regulatory filing.

Quality concerns over drugs manufactured in India

As earlier reported by Business Standard, the Center for Drug Evaluation and Research (CDER), a division of the USFDA, last month expressed concern over the quality of manufactured drugs in India. CDER found violations in 11 per cent of the facilities inspected in the country. Additionally, data integrity issues were also found in research organisations for drug manufacturing.

The USFDA is also reportedly piloting a Quality Management Maturity (QMM) programme, which aims to improve the supply chain and reduce drug shortages through quality management practices.

US pharma business expected to grow 8 per cent

Despite the regulatory hurdles, the US business for most companies is expected to grow by 2-4 per cent quarter-on-quarter and around 8 per cent year-on-year, driven by stable pricing and new product launches. Key product launches, such as the generic versions of Revlimid (a cancer drug) and Spiriva (a respiratory drug), are expected to boost revenues.

Overall, the companies' revenues are projected to grow at a modest pace of 9 per cent year-on-year, with the India business likely to grow at a faster pace of 10 per cent, driven by seasonal demand for acute products, the Times of India added.

Cipla recently reported a 7 per cent increase in revenue to Rs 6,694 crore and an 18 per cent rise in net profit to Rs 1,178 crore for Q1 FY25, supported by strong performance in both India and the US markets.

While regulatory challenges in the US pose significant hurdles, major Indian pharmaceutical companies are expected to navigate these issues and achieve moderate growth through strategic product launches and stable market conditions.