It's bitter medicine by the spoonful for pharma

The US Food and Drug Administration (FDA) has banned imports from Indian generic drugmaker Sun Pharmaceutical Industries Ltd's plant at Karkhadi in Gujarat, in the latest quality blow for India's drug sector.

The FDA has imposed a rash of regulatory sanctions on Indian generic makers in the last year, triggering concerns about the quality of the medicines supplied by the $14 billion industry to countries including the United States, the biggest market.

India is second only to Canada as a drug exporter to the United States, where it supplies about 40 percent of generic and over-the-counter drugs.

"The FDA is becoming more stringent. It's a learning curve for everyone. You have to invest more," said B&K Securities analyst Rohit Bhat. "Companies will have to pull up their quality parameters." It was not immediately clear why the FDA imposed the ban on Sun Pharma's Karkhadi plant.

The FDA had issued an "import alert" against the factory on its website on Wednesday last. The agency defines such a sanction as something that results in the detention without physical examination of drugs from firms that have not met so-called good manufacturing practices.

The ban on the plant underscores growing concerns about the quality of medicines made in India as demand for generics grows in countries from the United States to Japan.A Sun Pharma spokeswoman said the financial impact of the FDA ban on US shipments from the plant, which makes antibiotic cephalosporin, would be "negligible". The plant accounts for less than 1 per cent of its overall sales, she said. Sun Pharma also said it had initiated "several corrective steps" to address the FDA's concerns, and kept its guidance for consolidated sales for the fiscal year ending this month. The Karkhadi plant is one of Sun Pharma's 25 manufacturing plants, of which 11 are in India.

Industry officials in India say weak local regulatory oversight and a lax approach to quality control by some drugmakers in a rush to tap growing global demand for generics can result in sub-standard manufacturing processes.

The urgency to be first with a generic version of a drug coming off patent is one of the reasons for quality problems, they say. The company that first launches such a drug enjoys a six-month exclusivity period, which can be lucrative for the generic version of a commercial blockbuster.

More firms scrutinisedThe FDA, which last month called for more collaboration with the Indian regulator to improve drug quality, has banned imports from all the Indian plants of Ranbaxy Laboratories Ltd India's No.1 drugmaker by sales, over production quality lapses.To literally compound Ranbaxy’s problems, the DNA newspaper reported last week that the Supreme Court has directed the pharmaceutical firm to respond to a public interest litigation seeking a probe by the Central Bureau of Investigation (CBI) for allegedly supplying adulterated drugs in the country.

The apex court has asked the government to reply to the plea that sought the court's direction for cancellation of the drug major's licence, the newspaper said.

Referring to the legal battle faced by the company in the US earlier, the newspaper quoted the petitioner as saying, “It is a clear case of Ranbaxy operating hand-in-glove with the drug controller of India who did not prohibit Ranbaxy from selling defective drugs.”

He said that a serious threat is being posed to the lives of citizens who are not only paying heavy money for Ranbaxy's generic version of cholesterol lowering /heart disease drug but could also lose their health or lives due to non-effective material in it.The newspaper said that the petitioner also cited the role of the Central Drug Standards Control Organisation (CDSCO) in permitting Ranbaxy to sell drugs in India, especially in the wake of the results of the USFDA probe against the company.

The DNA report said that industry experts are unsure about the outcome of this development as something like this is happening for the very first time in the Indian pharmaceutical space and Ranbaxy in particular. “Cancellation of the company's licence for issues with one drug is very far-fetched. The regulators could stop the company from manufacturing the drug, but don't think they can cancel the licence,” said an analyst cited in the report.

At the receiving end Separately, rival drug maker Dr Reddy's Laboratories Ltd started a recall of 58,656 bottles of its heartburn drug lansoprazole in the United States in January due to a microbial contamination, information posted on FDA website on Wednesday showed.A spokesman for Dr Reddy's was not immediately available to comment.

Also this month, the FDA announced drug recalls from both Ranbaxy and Sun Pharma. Wockhardt has also been barred from exporting drugs from some of its plants to the US and Britain.

Most of the drugs that Ranbaxy, Wockhardt and their Indian peers, including Dr Reddy's and Lupin, export to the United States are cheaper copies of drugs with expired patent protection.

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