Global perspective
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A stark warning
Asian companies supplying medicines to the US are coming under greater scrutiny
T
he trend is disturbing. So far in 2013, 19 Indian drug manufacturing facilities, including those of Ranbaxy, Wockhardt and RPG Life Sciences, have been barred from supplying medicines to the world’s largest pharmaceutical market, the US. Agila Specialities, which is Strides
Arcolab’s injectible arm; Fresenius Kabi AG’s manufacturing facility in West Bengal; and Hospira Healthcare India have also received warning letters from the US Food and Drug Administration (FDA). A closer look at the warning letters issued by the US Office of Manufacturing and Product Quality between January 2010 and June 2013 illustrates the changing profile of regulatory inspection. Of the 67 warning letters, two-thirds were related to formulation facilities and only one-third were for Active Pharmaceutical Ingredient (API) plants. In total, 66 companies received warning letters during the 42-month period. One company, Apotex, received two warning letters. Prominent among those receiving letters were Boehringer Ingelheim, Hospira, Merck KGaA, Novartis, Novo Nordisk, Sanofi Aventis, SmithKline Beecham, Teva and Wyeth Lederle. It is clear that both innovator and generic companies alike, from all geographies, are affected. Looking at incidences of drug
recall over the period shows that 96 companies had just one drug recall, while 24 companies had a safety alert issued against them. Three American companies – American Regent, Hospira and Bedford – were also included, as were India’s Glenmark, Sun Pharma and Ranbaxy. Indian companies, which account for 40% of US Drug Master Files till date, and 37% of Abbreviated New Drug
Applications in 2012, accounted for only 12% of the letters. That is not, however, to dilute from the fact that Indian pharma companies have clearly been lax in their safety and quality standards. Indian firm Ranbaxy, for example, recently pleaded guilty to seven federal criminal counts of selling adulterated drugs with intent to defraud, and failing to report that its drugs did not meet certain specifications as required by the FDA. The case proved beyond doubt that there is no monitoring of manufacturing practices by an independent agency of repute. Moreover, the $500m fine that the company had to pay out is a rather light sentence for what it has done to India’s generics business. However, India’s domestic industry did not wake up to the stringent regulatory requirements of the FDA until after Ranbaxy’s experience. The FDA’s adoption of progressively higher standards of product safety and quality have led to a greater focus on data integrity and current good manufacturing practice compliance. It is the lack of awareness and inadequate follow ups of these continually evolving standards that could have resulted in some companies failing to meet FDA requirements. Interestingly, China, a major supplier of active pharmaceutical ingredients, received seven import alerts during 2013, way below the 19 India has received. Some of the other large producers of generic medicines, such as Australia, Canada and Japan, have received two import alerts each during the same period, while South Africa faced only one import alert. Israel, which is a major generic producer with companies like Teva headquartered there, has not received any import alert so far for
‘Though critics may say that that the enforce- ments are far less in other countries, the overriding concern is not so much about enforce- ments, but the failure of companies to take adequate corrective measures.’
violations of manufacturing norms, according to FDA data. Though critics may say that that
the enforcements are far less in other countries, the overriding concern is not so much about enforcements, but the failure of companies to take adequate corrective measures. Worldwide, the pharmaceutical industry has been facing increased scrutiny by drug regulatory authorities. The growing tendency towards zero tolerance necessitates changes in attitude and culture across organisations, and Indian companies necessarily need to understand and abide by the new norms, especially since their valuations could be hit, given their significant exposure to the US market. Yes, the Ranbaxy case has exposed
regulatory weaknesses of India’s generics business and has shown an ugly mirror to the rest of the generic community, but it has also set in motion a review at India’s national regulator of drug safety standards, the Central Drugs Standard Control Organisation and various ministries associated with the industry. Local drug companies too have heeded it as a wake-up call. Incidentally, Ranbaxy’s US factory,
Ohm Laboratories, has just got a ‘clean bill of health’ from the US regulator; the facility has been under FDA surveillance since the end of 2012. The clearance will enable Ranbaxy, owned by Daiichi Sankyo of Japan, to continue to supply from the unit. The US market contributed a little over 40% to Ranbaxy’s total revenue until 2012, when the company enjoyed 180 days of exclusive marketing rights on its Lipitor generic.
A Nair is a business journalist based in Mumbai, India.
46 Chemistry&Industry • November 2013
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