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
"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
It was not immediately clear why the FDA imposed the ban on Sun
Pharma's Karkhadi plant.
The FDA issued an "import alert" against the factory on its website
said on Wednesday. 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, often referred to as the low-cost
"pharmacy to the world", 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
U.S. shipments from the plant, which makes antibiotic cephalosporin,
would be "negligible". The plant accounts for less than 1 percent 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. Three of those plants, including the
Karkhadi plant, are in Gujarat.
Shares in Sun fell as much as 6.4 percent on Thursday.
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
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.
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MORE INDIAN COMPANIES SCRUTINISED
The 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.
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.
India's Wockhardt Ltd has also been barred from exporting drugs from
some of its plants to the United States and Britain.
Most of the drugs that Ranbaxy, Wockhardt and their Indian peers,
including Dr Reddy's and Lupin Ltd, export to the United States are
cheaper copies of drugs with expired patent protection.
"When a company is small, it can be managed by strong supervision.
As companies get bigger, supervision can break down," said a chief
executive officer at a top Indian drugmaker.
"You need systems and a culture to maintain proper supervision — and
we are in that process of growing up, I think," said the CEO,
declining to be identified.
(Additional reporting by Ben Hirschler
in London; editing by Tony Munroe and Jeremy Laurence)
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