The holiday season approaches, so here’s a quick look at the year that was for Indian Pharma, before we disappear into a haze of year-end festivities. It’s a mixed bag (what year isn’t?) including stuff that could influence the way things work in the years ahead. For convenience, I’ve divided up what I think are key developments into posts rather than stick to any specific chronology of events. In the first post, I look at developments in the regulation of Indian manufacturing.
The Indian pharma industry continues to feel the impact of the US FDA’s heightened vigilance. In 2014, companies such as Ipca Labs, Sun Pharma, Cadila Pharmaceuticals, among others received warning letters from the FDA casting doubts over the credibility of the data that they generated around drug quality. While the shock and awe engendered by the Ranbaxy scandal in 2013 – both, the extent of the violations, and the punishment – appear to have subsided this year, the company continued to feel the effects; the FDA withdrew tentative approvals granted to two potentially lucrative generics.
As rating agency CRISIL pointed out in a June report, the number of foreign inspections by the US FDA has nearly doubled between 2008 and 2013 in line with its commitment to strengthen the US drug supply chain. This has led to a spurt in warning letters. Notably, it said that as a percentage of approved facilities, the number of enforcements remained relatively lower for Indian companies and expressed confidence that large Indian companies could remain competitive in spite of higher compliance costs. CRISIL found that one way they hedged risk was through site transfers and dual filings.
The FDA, though the most significant, is not the only foreign regulator that Indian companies have to deal with. This month, GVK Bio, a contract research firm that conducts clinical studies for pharma companies was hauled up by Germany for suspect data and the products approved on the basis of that data had to be pulled off the market impacting 16 companies. Whether this too is a result of closer scrutiny is unclear.
Either way, regulatory risk will accompany companies and investors into 2015.
So will the perception overhang. The public debate around quality has found its own rhythm; it simmers until brought to a boil by revelations of specific violations. Then, after a bout of predictable outrage, it subsides. The most recent report to turn up the heat was a Bloomberg story published early this month that detailed data fudging at Indian factories. In October, a group of researchers published a National Bureau of Economic Research working paper that found that a significantly higher fraction of “made-in-India” drugs sampled in a pilot study were substandard or falsified if they were purchased in Africa than if they were purchased in India or non-African middle income countries such as China, Brazil, Turkey, Thailand and Russia.
Unlike import alerts though, the impact of negative perception on sales is tougher to measure. But companies will have to fight their battles on this front too.
Door still open
Indian pharmacos can take heart that the regulator in the world’s largest pharma market, the US, appears not to be in any hurry to slam the door in their faces. This was evident in the visit of US FDA Commissioner Margaret Hamburg to India early this year. “The point of my visit was that we were hoping to be able to engage directly with government officials, industry representatives, do some visits, be able to really get a better sense of issues on the ground, and meet with the Indian FDA office. I think we accomplished all of that and [feel] very good about the meetings and discussions that we had,” she reportedly said. And independent estimates by India Ratings & Research suggest that Indian generic exports will see double-digit compounded annual growth over a 5-year period driven by exports to the US.
The Indian regulator, DCGI, is also belatedly getting into shape. Plans are afoot to double the number of drug inspectors in the central government to 1,000, and enhance regulatory resources available to states. In August, the DCGI’s office issued upated inspection guidelines. But the much-maligned drug regulatory system in India took another blow when 14 women who were part of a female sterilisation drive were suspected to have been given tainted drugs, before they died.
All in all, it was a busy year for regulators and the folks at Indian pharma dealing with them. Given the work-in-progress nature of regulatory actions, 2015 promises to be as busy if not busier.
Pic sourced from Google Images