Hyderabad: The next time you hear about an Indian pharmaceutical firm entering a United States-backed market blacklist, know that smart economics could be one of many possible reasons behind the move.
Several Indian pharma firms feel drugmakers here are being singled-out using reasons unrelated to drug quality. They blame the United States’ powerful, well-entrenched pharma lobby and their unrelenting attempts to protect their market and revenues.
What’s at stake? A whopping $335 billion! This is the worth of drugs supposed to go off-patent between 2008 and 2020. Once a formula loses its patent protection, it becomes what’s known as a ‘generic drug’ and can then be manufactured by any other company after the right permissions from local regulators.
While this presents a big opportunity for Indian companies, known for making affordable drugs, it becomes a bigger problem for multi-national pharmaceutical giants who have failed to bring out new innovative drugs to maintain income flows.
This changing trend in the pharma industry led to the legislation of the Food and Drug Administration Safety and Innovation Act (FDASIA), in 2012. Under this law, the FDA is mandated to implement the same inspection schedule for foreign facilities it uses to oversee domestic manufacturers. This law allows the US FDA to levy an inspection fee on drugmakers and to use the proceeds to boost its manpower in countries such as India, which meets 35 per cent of the American generic drug demand.
The FDA now has offices in New Delhi, Mumbai and Hyderabad for its Indian operations and has a total of 19 inspectors. A few years ago, it had none.
However, an analyst defends FDA’s stringent regulations. “Drugs are expected to cure diseases and a lack of good manufacturing processes could compromise efficiency. If hands are not washed properly, soap residue or microbes could enter drug formulation state and could lead to different chemical reactions. As a buyer, they are right in their stance.”
“We are just the sellers,” says Dr P.V. Appaji, a former director-general of Pharmaceutical Export Promotion Council of India (Pharmexcil). “We have to meet whatever standards our buyers want and we are indeed capable of meeting them. It is just that we assume everything is okay and don’t really anticipate what sort of questions regulators ask.”
The threat from FDA remains very real. Dr Reddy’s Laboratories has reportedly invested $40 million for remedial measures including training staff on standards from the US drug regulator’s rulebook. And DRL is one among several Indian companies that were issued warning letters.
No soap & other slips
It was 2012 and inspectors from the FDA were at an Indian drug factory. Management though, was not perturbed as they had trained their staff quite well in FDA tactics. But as the inspection drew to a close, an official raised a flag on an empty soap box. And in an instant, all that investment that had gone into training personnel went down the drain as the company was slapped with a warning letter on the lack of hygiene.
A warning letter is a precursor to potentially bigger problems. If it is not acted upon, the FDA can ban sale of drugs made in that particular factory, within the US.
Absence of soap in the facility is one of many such things that have drawn a warning letter. Other triggers include lack of paper in the tissue-paper box, a strand of hair in a Petri dish, slightly broken cabinets or a fly inside the drug sample room.
The absence of a bar of soap at a factory may seem innocuous but experts claim they are hazards. “If a worker doesn’t wash his hands with soap, germs could contaminate drugs,” says an analyst. Others are confident the problems can be overcome. “It is unfortunate because it’s happening in India. The problems do not reflect the quality of drug. Better staff training and proactive managements can solve this crisis,” adds Dr Appaji.
