Tag Archives: cGMP

A New Facet of ‘Data Integrity’ With Novel Therapy… And Much Beyond

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The peril of breach of data integrity involving a top Indian pharma player, jolted many, probably for the first time, on September 17, 2008. On that day, the USFDA, reportedly, issued two ‘Warning Letters’ and an ‘Import Alert’. These were related to deficiencies in the drug manufacturing process and deviations from U.S. current Good Manufacturing Practice (cGMP) at Ranbaxy’s Dewas and Paonta Sahib plants in India.

Since then, instead of demonstrable corrective measures, similar incidents had started ballooning – inviting more serious US-FDA actions, such as Import ban, consent decree, loss of market value, Loss of customer trust, among many others. The research article – ‘Overview of Data Integrity issues in the Pharmaceutical industry,’ published by the International Journal of Pharmaceutical Sciences Review and Research, in its May-June 2018 issue, also reflects the same trend.

Much reported instances of breach of ‘Data Integrity’ were specific to generic drugs and mostly manufactured by Indian companies, besides China. While this may be true at that time, it is now spreading much beyond generic drug manufacturing in India and China – making its way into the global clinical trial arena. I also wrote earlier that ‘Data Manipulation: Leapfrogging Dangerously Into Clinical Trial Domain.’ With greater focus, this article will discuss not just how ‘Data Integrity’ issue is cropping up into clinical trials of even modern, complex, highly innovative and exorbitantly priced lifesaving treatments. Going beyond that, I shall also point towards increasing attempts to exaggerate the success of many cancer drug trials due to strong bias. Nevertheless, let me start by rehashing the relevance of ‘Data Integrity’ on patients’ health interest.

Data Integrity ensures safe, effective and high-quality drugs for patients:

According to US-FDA: ‘Data integrity is an important component of industry’s responsibility to ensure the safety, efficacy, and quality of drugs, and of FDA’s ability to protect the public health.’ Thus, data integrity-related cGMP violations may lead to regulatory actions, including warning letters, import alerts, and consent decrees, as the drug agency notified. In other words, maintain all types of ‘Data Integrity’ is a key requirement in the pharma industry to demonstrate that the final products conform to the required quality parameters.

These requirements are known to all generic drug exporters catering to the regulated markets, including the local manufacturers in the United States. Curiously, it continues to happen despite their full knowledge of the grave consequences of violations. The June 12, 2019 paper – ‘An Analysis Of 2018 FDA Warning Letters Citing Data Integrity Failures,’ published in Pharmaceutical Online, brings out some interesting facts, related to drug manufacturing area.

From the analysis of 194 ‘Data Integrity’ associated ‘Warning Letters (WL).’ from 2008 to 2018, the top 5 countries in this regard came out as follows:

Rank

1

2

3

4

5

Country

China

India

United States

Europe

Japan

No. of WL

58

54

36

14

7
% to Total

29.8

27.8

18.6

7.2

3.6

Interestingly, over 76 percent of US-FDA Warning Letters (WL) are on manufacturing ‘Data Integrity’ and were issued to pharma companies located in China, India and the United States. Moreover, when it comes to all types WL related to various types of regulatory malpractices, India again featured as one of the top violators. Be that as it may, I shall now focus on the spread of this decay in other important drug safety related areas, such as clinical trials.

Ironically, breach of ‘Data Integrity’ in another crucial area, like clinical trials for new drugs, doesn’t seem to attract public attention as much, which I shall reason out below – also explaining why it’s so.

Breach of ‘Data Integrity’ in clinical trial – more crippling for the company: 

‘Data Integrity’ concern pertaining to clinical trials was recently expressed in an article, published by the Food and Drug Law Institute, in the April-May 2019 issue of its Update Magazine. The paper reiterated: ‘Good Clinical Practice (GCP) data integrity issues can at times be more crippling to a company than Good Manufacturing Practice (GMP) data integrity issues.’ Elaborating the point further, the authors highlighted, where such issues are severe, the drug regulatory agency may completely reject the data submitted in new drug applications, supplemental drug applications, and abbreviated new drug applications.

This outcome is quite akin to import bans for generic drugs into the United States, as it would cause a huge setback for the company, affecting clinical development programs for the new drug. Moreover, as the article says, such action would be ‘costing the sponsor substantial time, money, and reputational credibility, not to mention delaying patient access to new drugs.’

‘Dozens of recent clinical trials may contain wrong or falsified data’:

This is claimed by the research paper that was discussed in ‘The Guardian’ on June 05, 2017 carrying the headline - ‘Dozens of recent clinical trials may contain wrong or falsified data, claims study.’

In this study, John Carlisle, a consultant anesthetist at Torbay Hospital, reviewed data from 5,087 clinical trials published during the past 15 years in two prestigious medical journals, JAMA and the New England Journal of Medicine, and six anesthesia journals. In total, 90 published trials had underlying statistical patterns that were unlikely to appear by chance in a credible dataset, the review concluded.

As one of the top medical experts quoted in this paper, said: “It’s very scary that we may be treating patients based on false evidence.” He further added: “It may be the case that certain treatments may need to be withdrawn from use.”

Another October 01, 2013 report, citing a specific example of the same, wrote: ‘Japan’s ministry of health has concluded that studies based on clinical trials for Novartis’s blood pressure drug Diovan contain manipulated data.’ It also added: ‘Diovan was approved for use in Japan in 2000, but recently two universities who hosted and analyzed trials for Novartis – the Kyoto Prefectural University of Medicine and Jikei University School of Medicine – reported finding evidence of data fabrication.’

Thus, from available reports, it appears, just as the saga of ‘Data Integrity’ related drug manufacturing keeps continuing, the same related to clinical trials doesn’t seem to fall much behind. But, the valid question that may follow – why then reported instances of breach of clinical trial data integrity isn’t as many?

Breach of ‘Data Integrity’ found by USFDA is rarely reported: 

The answer to the above question may be found in The BMJ study, published on February 10, 2015. It brought to the fore – ‘Research misconduct found by FDA inspections of clinical trials is rarely reported in journal studies.’ This review was based on identified 57 published clinical trials for which an FDA inspection of one of the trial sites had found significant evidence of research misconduct, including falsification or the submission of false information, problems with adverse event reporting.

The researcher also noted that serious misconducts related to clinical trials, are rarely mentioned in subsequently published journal articles in the same area. More disturbing to note, this critical gap in the transparency of clinical trial reporting is now sneaking into even highly specialized treatment, such as ‘Gene Therapy’, and that too involving a Big Pharma name.

US-FDA has now raised this question even for a ‘Gene Therapy’:

A media report of September 09, 2019 highlights, that Novartis is facing an uproar over data manipulation involving USD 2.1 million gene therapy Zolgensma, which treats spinal muscular atrophy, a leading genetic cause of death in infants. According to this report, Novartis gave “detailed explanations” on Aug. 23 to the FDA about the company’s investigation into the data manipulation and addressed regulators’ questions over why the company waited until late June to make disclosures. However, quoting the FDA, the report indicates, ‘Novartis could face possible civil or criminal penalties.’

Prior to this, another report of August 13, 2019, stated that ‘documents referenced in a Form 483 by the FDA, which inspected the lab a month after it learned of the falsified records, also suggest the data-fudging began at least in early 2018 and could have been uncovered by managers at AveXis during several steps in the clinical outcome assessment.’ The gene unit of Novartis is called AveXis, which had announced the US-FDA approval of Zolgensma on May 24, 2019.

Such instances involving clinical trials with new, complex and highly innovative therapies, further reinforces already existing ‘Data Integrity’ related health safety concern. The cost of these new treatments being so high, it’s perplexing to fathom the necessity of cutting corners in clinical trials, if at all. More so, when these are avoidable to establish efficacy, safety and high-quality standard of the therapy to drug regulators for marketing approval.

Beyond ‘Data Integrity’ – in clinical trials:

Just as ‘Data Integrity’ issue in generic drug manufacturing has intruded in the clinical trial arena for novel treatments, yet another concern, also related to data, goes much beyond what is happening today in this area. This fast-emerging practice is related to ‘cherry-picking data’ for biased clinical trial reporting, adversely impacting public health safety, as brought by several research studies.

Very recently, this was vindicated by another paper published in The BMJ on September 18, 2019. It raised a serious concern of bias in clinical trial data submitted to regulatory agencies for marketing approval of even lifesaving drugs. The findings of the above paper concluded:

Between 2014 and 2016, almost half of the most pivotal studied forming the basis of European Medicines Agency (EMA) approval were judged to be at high risk of bias, based on their design, conduct or analysis. Accepting that some of these might be unavoidable because of complexity of cancer trials, it noted that regulatory documents and the scientific literature had gaps in their reporting. Journal publications also did not acknowledge the key limitations of the available evidence identified in regulatory documents. This concern too keeps growing.

Conclusion:

As discussed above, six broad and important points to note for any ‘breach of integrity’ or ‘cherry-picking’ of data in the pharma industry:

  • Takes place mostly in two known areas – manufacturing and clinical trials.
  • Involves both cheaper generic drug manufacturing, as well as, clinical trials of most innovative and highly expensive treatments – conducted even by Big Pharma constituents.
  • ‘Cherry-picking data’ for biased clinical trial reporting while obtaining marketing approval, involves even cancer drugs.
  • Any such avoidable malpractices with ‘data’, could seriously impact patients’ health interest, raising a public concern.
  • Instances of such malpractices usually become public, only when the perpetrators are caught by vigilant drug regulatory agencies, such as the US-FDA, or when external experts can trace their footprints through sophisticated analytical tools.
  • Multiple instances of wrongdoing of this nature, often by the same company, despite requisite regulations being in place, and also after facing penal actions, make it mostly a self-discipline issue of repeat offenders.

It’s a different discussion all together, whether or not ‘data’ is a new oil – air or water. But maintaining the sanctity of data, while generating, interpreting, presenting or even leveraging these, including for commercial considerations, must not be compromised, at any cost.

Today, breach of ‘Data Integrity’ and ‘Cherry-Picking of Data’ for biased reporting, are creeping into new drug clinical trial domain – from its usual habitat of generic drug manufacturing, posing a greater threat to patient safety. At the same time, none can say, either, that it’s happening with all drugs, at all the time and by all drug manufacturers. But, if and when it happens, it could lead to a catastrophic consequence both for patients and their family.

Be that as it may, country’s top drug regulators should strive harder for an ongoing and meaningful engagement with the pharma industry on this avoidable development. It could well be a carrot and stick approach, where repeat violations by any company would pose a risk of legal survival of the business.

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Even Smaller Countries Now Question Indian Drug Quality Standard

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India has over 135 US-FDA approved pharmaceutical manufacturing units, at present. This number is very significant ranking second behind the United States, and was driving the growth of generic drug exports in the top pharma market of the world. Riding on the wave of such stellar progress, a hubris seems to have set in the related operational areas of many Indian pharma players, especially the drug exporters.

This incredible ride continued, until a first major jolt shook all concerned in this business. It came first in the form of an unprecedented hefty fine for wrong doing, followed by the US- FDA ‘import bans’ of several drugs, manufactured around 44 different Indian drug-making facilities, since over the last five years.

The first major jolt:

Not so long ago, just in 2013, quality related concerns with generic drugs exported from India came to the fore, after Ranbaxy reportedly pleaded guilty and paid a hefty fine of US$ 500 million for falsifying clinical data and distributing ‘adulterated medicines’ in the United States.

Thereafter, US-FDA banned drug imports from Ranbaxy and Wockhardt, manufactured in all those facilities that failed to conform to its cGMP quality standards.

Those are the stories for generic formulations. It then covered the Active Pharmaceutical Ingredients (API) too. On January 23, 2014, USFDA notified Ranbaxy Laboratories, that it is prohibited from manufacturing and distributing APIs from its another Indian manufacturing facility in Toansa. With this step, erstwhile Ranbaxy had virtually no access to the top pharmaceutical market of the world.

Was it for raising the bar of quality norms?

Many of us felt and expressed that ‘import bans’ of Indian drugs due to failing quality parameters, manufactured in certain facilities of largely Indian pharma companies, are mostly due to higher stringent quality norms of the US-FDA, the European Medicines Agency (EMA) and the Medicines and Healthcare products Regulatory Agency (MHRA). Nevertheless, this argument does not carry much weight, as an exporter will always have to conform to the set quality standards of the importers, whatever these are. 

Indian drug regulator too made a much avoidable remark:

Unfortunately, amid such a scenario, instead of taking appropriate transparent and stringent measures, the Drug Controller General of India (DCGI) was quoted by the media saying, “We don’t recognize and are not bound by what the US is doing and is inspecting. The FDA may regulate its country, but it can’t regulate India on how India has to behave or how to deliver.”

The DCGI made this comment as the then US-FDA Commissioner Margaret Hamburg was wrapping up her a weeklong maiden trip to India, in the wake of several ‘Import Bans’ arising out of repeated cGMP violations by some large domestic generic drug manufacturers. Whereas, Hamburg reiterated the need for the domestic drug manufacturers conform to the USFDA quality standards ensuring health and safety for American patients, the DCGI’s above comment appears rather arrogant, out of tune, and was avoidable, to say the least. Instead, some serious corrective regulatory measures should have followed.

On the above comments of the DCGI, the American Enterprise Institute reportedly reacted by saying, “Indian drug regulator is seen as corrupt and colliding with pharma companies…”.

Smaller countries initiated similar action:

It now appears that this situation is going from bad to worse and malady is much deeper. Smaller countries, such as Vietnam, have recently banned products of a sizable number of domestic pharma exporters.

On September 5, 2016, a leading business daily of India reported: “Close on the heels of Prime Minister Narendra Modi’s visit to Vietnam to strengthen bilateral ties, including defense, security and trade, the ministry of commerce and industries is planning to set up a committee, along with the Central Drugs Standard Control Organization (CDSCO), to inspect Indian pharmaceutical companies which have been banned from Vietnam for exporting sub-standard drugs.”

In 2014, the Drug Regulatory Authority of Vietnam ‘red-listed’ about 50 pharma companies for alleged regulatory non-compliance in their manufacturing practices. The names included, some big names of Indian pharma industry.

Overall pharma market size of Vietnam is estimated over US$ 2 billion, and expected to grow to US$ 8 billion by 2020. A significant chunk of Vietnam’s pharmaceutical market comprises of generic drugs, where India used to be a major exporter. In the recent years, however, Indian pharmaceutical product exports to Vietnamese market have dipped considerably, reflecting the effects of the ban, with exports declining by 12 percent to US$ 146 million in 2015-16 from US$ 165 million in the previous fiscal year, the report said.

It was envisaged, especially after the Prime Minister’s visit to Vietnam, this situation will improve notably. However, just as what happened with the USFDA on related issues, there has been no change in the overall situation in this case, either.

Further, on November 23, 2016, yet another Indian Business news daily reported that 39 Indian drug companies have been blacklisted by Vietnam for quality standard violations, along with some others in Bangladesh and South Korea. The Vietnamese regulator has listed the names of all blacklisted companies on its website, without specifying in detail the exact reason behind the bans. The Indian products include, antibiotics and anti-rabies vaccine, among others. The latter was also reportedly banned by the World Health Organization (WHO), in January 2016.

What is more intriguing, despite the Union Ministry of Health and the Ministry of Commerce and Industries of India being aware of it, the issue seems to have drifted beyond reasonable control of the Indian regulators.

Some local companies still not acting:

On Feb 24, 2016, the US and the EU drug regulators reportedly called upon India’s pharmaceutical sector to step up efforts to improve manufacturing standards, and ensure the reliability of data, if it wishes to maintain its dominance in the generic drug industry. In the report, the director of the office of surveillance at the USFDA – Russell Wesdyk was quoted saying, “some Indian companies are still not taking enough steps to identify risks and failures at their firms.”

“Data integrity really sounds-off alarm bells for us. If you see data integrity on the surface, there is likely a lot going on underneath,” the foreign drug regulators reportedly commented.

These comments are profound, especially considering that India supplies about 33 percent of medicines sold in the United States, and nearly a quarter sold in the UK. Similar Indian drug quality related issues are now being raised by even smaller countries.

How safe are drugs for domestic consumption?

Many reasons may be attributed to quality concerns on Indian generics in the United States. Nonetheless, another question that surfaces alongside, if cGMP violations can take place for drug exports, despite rigorous compliance checks by the foreign drug regulators, what could possibly happen when the same system is so tardy in India? Are we consuming safe and effective drugs, whenever required, even within the country?

No one seems to have the right answer to this question, be because of various reasons. One such reason, out of various others, could well be how robust is data quality generated by the contract manufacturing companies? These are the core quality related issues, and can’t just be wished away, under any pretext.

Some examples:

On November 12, 2013, the DCGI was quoted saying that the investigative team of the drug regulator concluded that all the data submitted by Puducherry-based contract drug manufacturer ‘GuruFcure’, while seeking approval for manufacturing seven fixed dose combination drugs, are ‘fabricated’ and not ‘authentic’.

‘GuruFcure’, which started operations in 2007, and calls itself “one of the leading pharmaceutical formulation manufacturers in India”, reportedly used to manufacture drugs for some leading pharma MNC and Indian companies, such as: Abbott, Alkem, Glenmark, Wockhardt, Unichem, Intas Pharma, among others.

Though, as per the above media report, Wockhardt and Glenmark said that they were no longer associated with ‘GuruFcure’ at that time, the fact remains, they did market drugs produced by this contract manufacture in the past, and the patients consumed those drugs against doctors’ prescriptions. The saga continues unabated, even today.

On November 28, 2016, a major national English daily reported with a video clip that, following a crackdown since March this year, the drug regulators of seven states have alleged that 27 medicines, sold by 18 major drug companies in India, including Abbott, GSK, Sanofi, Sun Pharma, Cipla, Torrent, Alkem, Emcure and Glenmark Pharma, are of substandard quality, citing grounds such as false labelling, wrong quantity of ingredients, discoloration, moisture formation, failing dissolution test and failing disintegration test. Such allegations, though supported by laboratory test results, needs to brought to their logical conclusion. This is mainly because, media reports of this nature fuel lurking apprehension on the overall drug quality standards in India, leading to serious compromise with patients’ health and safety.

Conclusion:

Against this rather gloomy backdrop, a ray of hope comes from a report that CDSCO has started training Indian drug manufacturers in good manufacturing practices, as it tries to address concerns of the USFDA, and other drug regulators, effectively.

Quoting the DCGI, who has now apparently resolved to put together proper practices and regulation in place for the pharma industry, the report says that CDSCO has hired 500 personnel, and is expected to further train employees of other units, to ensure that high quality medicines are manufactured in the country.

These officials will visit drug manufacturing hubs of the country over the next three to four years and train employees in producing quality medicines, following proper procedures and maintaining records. I hope, this will include contract manufacturers too. The question would remain: What happens when these regulatory lapses do not take place out of ignorance or lack of experience or expertise, but are purely intentional to cut corners?

Alleged dubious quality of many drugs manufactured in India is a critical issue, both within the country and with several foreign drug regulators, such as US-FDA, EMA and MHRA, among others. It affects all those who consume such drugs.

Today, even smaller countries are questioning Indian drug quality to protect their patients’ health interest. Thus, everything, when clubbed together, sends a strong signal to the Indian drug regulator to come out of its denial mode, walk the talk, and act decisively to safeguard the interest of Indian patients too.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

PE Investment In Pharma: The Changing Need Of Due Diligence

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From an international perspective, a Bain & Company report of April 2016 highlighted setting a new healthcare M&A record in the year 2015. During this year the total deal value was over 2.5 times higher than the average annual deal value of the previous decade. The report also mentioned that the Asia-Pacific Region grew in the same year by about 40 percent, fuelled by a number of activities in India and China. 

Commenting on India, the Bain report specifically mentioned that during the year, the Private Equity (PE) investors prioritized their investments in the country, not just targeting the global demand for pharmaceuticals, but also based on rapid domestic demand growth.

More popular targets in India were tertiary care, specialty care and laboratories. This is vindicated by TPG’s investment of US$146 million for a minority stake in Manipal Health, which operates multi-specialty and teaching hospitals in the country. Similarly, The Carlyle Group made a minority investment in the pathology lab chain – Metropolis Healthcare. This trend is expected to continue in the coming years and would in all probability include pharma companies of various sizes, with high performance or with high future potential.

In this article, I shall focus only on generic pharma companies in India.

A changing need of due diligence:

Despite some major uncertainties in the generally thriving domestic generic pharma market, this sector has the potential and possibility to come under the radar of many PE investors during the coming years.

However, in this scenario, to embrace success with lucrative returns, I reckon, there is a changing need of due diligence to follow, before suitable pharma companies are appropriately targeted. Conventional pharma due diligence, however stringent it is, may not capture appropriately the high-impact, up and down sides of long term business sustainability for the desired return on investments.

The rationale:

Consideration of significant cost savings in the pharma value chain won’t be just enough, any longer, to tide over any unforeseen rapid downturn in many pharma company’s business performances in the country.

This is largely because, many pharma companies in India have been thriving, so far, taking full advantage of some major loopholes in the regulatory area, including clinical trial; ethical marketing strategy and practices; overall generic product portfolio selection; new generic product developments; besides many others.

The need of a changing format of pharma due diligence in India is largely prompted by this prevailing scenario, even in the midst of stellar success of some companies, and plenty of lush green shoots, as they appear to many. 

The process of tightening the loose knots has commenced:

All these loose knots are expected to be tightened by the governments, sooner or later. In fact, while watching the intent of the Government and from some of its recent actions, it appears that the process has just commenced. Public and judicial pressure in these areas would also increasingly mount, with several related and major Public Interest Litigations (PIL) still remaining pending before the Supreme Court of India.

A few examples in this critical area: 

Thus, for any successful PE investments, especially for relatively long term, alongside conventional areas of due diligence, several non-conventional, but high business impact areas, need to be effectively covered for the Indian generic pharma companies, in general. Following are just a few examples in this critical area:

  • Business practices that the promoters personally believe in and practice
  • Belief and practices of key company personnel
  • Quality of regulatory approval
  • Product portfolio scrutiny
  • Marketing demand generation process and its long-term sustainability
  • Ability to introduce high-tech formulations with differentiated value offerings
  • Ability to come out with cost-effective manufacturing processes
  • Are Independent Directors, if any, really ‘Independent’?

I shall now very briefly try to illustrate each of the above points.

I. Business practices that the promoters personally believe in:

A large number of successful generic pharma companies are directly or indirectly driven, or in all practical purposes managed, and in several cases even micromanaged by the company promoters. Many experts have opined, though a craftily worded handbook of ‘corporate governance’ may exist in many of these companies, on the ground, promoters’ thoughts, belief, ethical standards, business practices and work priorities may easily supersede all those. 

The practice of good governance on the ground, rigid compliance with all rules, laws and regulations may quite often go for a toss. The employees implementing promoter’s decisions, may try their level best to record everything perfectly and as required. Nevertheless, sometimes regulators do succeed to ferret out the fact, which leaves an adverse impact on the business, in multiple ways.

Recent reports of the US-FDA on ‘data fudging’ in the drug manufacturing process, product quality standards and also in Clinical Trials, would illustrate this point. According to a 2015 EY Report on data integrity, ‘Import Alerts issued against Indian plants in 2013 accounted for 49 percent of the total 43 imports alerts issued by the US FDA worldwide.’

In some successful generic pharma company’s repetition of such incidences has also been reported. In my view, for recurrence of ‘data fudging’, no promoter of the concerned companies can possibly wash his/her hands off, putting all the blame on concerned employees, and the system.

A situation like this necessitates personal due diligence for promoters. It will help ascertain the persons’ business integrity, alongside the company performance as a whole. Accordingly, the PE investors would be able to flag those critical soft areas, which are key determinants for long-term sustainability of any pharma generic business in the country. 

II. Belief and practices of key company personnel:

The findings of the above EY Report also suggest, while most of the generic pharma company professionals are aware of the current Good Manufacturing Practices (cGMP) guidelines, more than 30 percent had still received ‘Inspectional Observations’ from the regulators in the last three years.

This fact calls for due diligence on another critical issue, and that is on the belief and practices of the key company personnel in the new product development, manufacturing, drug quality, marketing, supply chain management, and also covering their interaction with key regulatory and other Government personnel. These are soft issues, but with potential to make the whole business topsy-turvy, virtually overnight.

Conventional due diligence based on the company records may not always reflect the real situation within the organization.

III. Quality of regulatory approval: 

To illustrate this point, let me give the example of a launch of a ‘new drug’ in India. 

A ‘new drug’ has been defined in the Drugs and Cosmetics Acts in India, as any new drug substance which is being introduced for the first time in India, including any off-patent generic molecule, with the permission of only the Drug Controller General of India (DCGI). A ‘new drug’ shall continue to be considered as ‘new drug’ for a period of four years from the date of its first approval or its inclusion in the Indian Pharmacopoeia, whichever is earlier.

Thus, for even for any generic pharma product, be it a single ingredient or a ‘Fixed Dose Combination (FDC)’, if a marketing license is granted by any State Drug Controller, whatever may be the reason, despite the product being a licensed one, it will deem to be unauthorized as the DCGI’s approval was not obtained during the valid period of the 4 years, as per the Act.

Hence, a proper due diligence on the ‘quality of regulatory approval’ to detect presence of any such successful products in the product portfolio, would enable the PE investors in India to flag a possible risk of a future ban, inviting adverse business impact.

IV. Product portfolio scrutiny:

This scrutiny may not be restricted to some conventional areas, such as, to find out the ratio between the price control and decontrol products, leaving future scope to improve the margin. It may also focus on many other important India-specific areas.

One such area could even be the non-standard FDCs in the product portfolio. Some of these FDCs could also be approved by the state drug controllers earlier, scrupulously following the drug laws and rules. However, if the medical rationale of any of these successful products can’t be credibly established, following the global standards, the risk of a future ban of such products would loom large.

Another area could be the percentage of those products in the product portfolio, where the medical claims are anecdotal, and not based on scientific data, generated through credible clinical trials. 

One may draw a relevant example from the Nutraceutical product category. Although, these products are high margin and currently do not come under price control, the stringent regulatory demands for this category of products have already started coming. Strict conformance to the emerging regulatory requirements of both the DCGI of FSSAI may be cost intensive, squeeze the margin, could also pose a great challenge in the conventional demand generating process. I hasten to add that such decision would possibly be dictated by the time scale of PE investment, and the risk-appetite of the investors.                                                            

Yet another example prompts the need to check the quality of generic brands in the product portfolio. According to the Drugs and Cosmetics Act of India, some of these brands would merit to be categorized as drugs. In practice, the company concerned could well be surreptitiously classifying those as nutritional supplements, or Nutraceuticals, with the support of some State Drug Controllers and promoted accordingly, simultaneously avoiding any risk of drug price control. 

V. Marketing demand generation process and long-term sustainability:

This assumes critical importance in the pharma industry, especially when the Government is mulling to give the current voluntary ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ legal teeth, by making it mandatory for all. As I understand, besides other penal action, in serious cases of gross violations of the code, even the marketing license of the offender may get suspended, or cancelled. Thus, compliance to UCPMP would be critical to business performance. Thus, the level of compliance of a company in this regard could well be a part of the due diligence process of the PE investors.

It is also important to understand, whether the pharma generic target asset is predominantly buying doctors’ prescriptions through various dubious means to increase its brand off-takes, or the prescription demand generation process primarily stands on robust pillars of a differentiated value delivery system. The latter is believed to be more desirable for sustainable long term business success.

It is also important to understand, whether the strategic marketing process adopted by the company can withstand robust ethical, legal and regulatory scrutiny, or it is just an outward impressive looking structure, unknowingly built as ‘House of Cards, waiting to be collapsed anytime, sooner or later.

I would now give just a couple of other examples in this area, out of so many – say, a health product, which has been categorized as a drug by the drug authority, is freely advertised in the media, at times even with top celebrity endorsements. This strategy is short term, may eventually not fly, and is certainly not sustainable in the longer term, avoiding regulatory scrutiny. Another example, big brands of Nutraceuticals are being promoted with off-label strong therapeutic claims, and have become immensely successful because of that reason.

VI. Ability to introduce formulations with high-tech value offerings:

India is basically a branded generic market with huge brand proliferations of each molecule, or their FDCs. Just like any other brand, for business success and to overcome the pricing barrier, differentiated value offerings are essential for long term success of any branded generic too. This differentiation may be both tangible and intangible. However, if such differentiation is based on high-technology platforms, it could provide a cutting edge to effectively fight any cut throat competition. Thus, appropriate due diligence to ascertain the robustness of the ability to introduce high-tech formulations with differentiated value offerings, would be an added advantage.

VII. Ability to come out with cost-effective manufacturing processes: 

This is not much new. Many PE investors would possibly look at it, in any case. Just like formulations, ascertaining similar ability to come out with cost-effective manufacturing processes to improve margin would also be very useful, especially for long term investments.

VIII. Are Independent Directors, if any, really ‘Independent’?

If the target company has ‘Independent Directors’ in its Board, as a mandatory legal requirement or even otherwise, there is a need to dispassionately evaluate how independent these directors are, and what value they have added to the company or capable of providing in the future, according to their legal status in the Board.

True independence, given to the high caliber ‘Independent Directors’ in the Board of promoter driven pharma companies, could usher in a catalytic change in the overall business environment of the company. It would, consequently, bring in a breath of fresh air in the organization with their independent thoughts, strategic inputs and involvement in the key peoples’ decisions.

As it is much known, that a large number of ‘Independent Directors’ are primarily hand-picked, based on their unqualified support to the Indian promoters. Many board resolutions, in various critical business impact areas, are passed as desired by the powerful promoters, may be for short term interest and fire fighting. In that process, what is right for the organization for sustainability of business performance, and in the long term interest of all the company stakeholders, may get sacrificed.

When this happens in any target company, mainly for short term business success, taking advantage of regulatory loopholes and inherent weaknesses in the system, a flag needs to be raised by the PE investors for further detailed analysis in the concerned areas.

Conclusion:

Going forward, it appears to me that PE investors would continue to look for attractive pharma investment opportunities in India, though with increasing level of competition. These investors would include both global and local PE firms. Some of them may like to stay invested for longer terms with lesser regulatory and other associated risks and a modest return, unlike a few other high risk takers, sniffing for commensurate windfall returns. 

In India – today’s land of seemingly unparalleled economic opportunities, the PE players should also take into consideration the prevailing complexities of the domestic pharma industry seriously and try to analyze the same properly, for appropriate target asset identification. Many successful local generic players may outwardly project sophisticated, and high standard of business practices. However, these need to be ascertained only through a structured format of India-specific due diligence process.

Corporate governance processes, regulatory compliance, marketing practices and financial reporting systems of many of these companies, may not pass the acid test of stringent expert scrutiny, for long term sustainability of business.

This mainly because, a number of generic pharma companies in India have been thriving, taking full advantage of some major loopholes in the regulatory area, marketing practices, overall product portfolio selection and new generic product development areas, besides many others.

These successful domestic drug companies have indeed the potential and overall attractiveness to come under the radar of many PE investors, who, in turn, should also realize that all the loose knots, fully being exploited by many such companies, are expected to be tightened by the governments, sooner or later.

Keeping this possibility in perspective, to embrace success with lucrative returns, I reckon, there is a changing need of due diligence to follow by the PE investors for right valuation, and much before any pharma generic company is identified by them.

That done, the Indian generic pharma market could soon emerge as an Eldorado, especially for those PE investors, who are looking for a relatively long term attractive return on investments.

By: Tapan J. Ray 

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

“Make in India…Sell Anywhere in The World”: An Indian Pharma Perspective

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In his Independent Day speech from the ramparts of the Red Fort on August 15, 2014, Indian Prime Minister Modi gave a clarion call to all investors of the world, “Come, make in India”, “Come, manufacture in India”, “Sell in any country of the world, but manufacture here”.

The Prime Minister did not stop there. In his inimitable style, following it through on September 25, 2014 he gave an official status to ‘Make in India’ slogan and launched a global campaign.

“My definition of FDI for the people of India is First Develop India. This is also a responsibility for the people of India,” he further clarified.

An Indian perspective:

If I juxtapose this vision of the Prime Minister in the Indian pharmaceutical industry perspective, one finds that many small, medium and large size local domestic manufacturers are currently manufacturing drugs not just for the domestic market, but are also exporting in large quantities to various countries of the world, including, North America, South America and Europe.

The United States (US) is one of the most critical markets for majority of the Indian drug exporters. This transaction was taking place without any major regulatory hitches since quite some time. Unfortunately, over the last few years, mostly the Federal Drug Administration of the US (USFDA) and the United Kingdom (UK)’s Medicines and Healthcare Products Regulatory Agency (MHRA) have started raising serious doubts on the quality of medicines manufactured in India, making a significant impact on the drug exports of the country.

Most of these quality issues are related to ‘Data Integrity’ in the dug manufacturing and its documentation processes.

The impact:

According to industry data, in 2013-14, Indian drug exports registered the slowest growth in nearly the last 15 years. In this fiscal year, pharma exports of the country with a turnover of US$ 14.84 billion grew at a meager 1.2 percent. Pharmexcil attributed its reason to USFDA related regulatory issues and increasing global competition.

US accounts for about 25 percent of India’s pharma exports and its Federal Drug Administration (USFDA) has been expressing, since quite a while, serious concerns on ‘Data Integrity’ at the agency’s  previously approved production facilities of a large number of Indian pharma players.

The issue is causing not just a serious concern to USFDA and some other overseas drug regulatory agencies, but also posing a huge threat to future growth potential of Indian drug exports.

It is worth noting that Indian government had set an objective, in its strategy document, to register a turnover of US$ 25 billion for pharma exports in 2014-15. In all probability, it would fall far short of this target at the end of this fiscal, predominantly for related reasons.

Why is so much of ‘fuss’ on ‘Data Integrity’?

Broadly speaking, ‘Data Integrity’ in pharmaceutical manufacturing ensures that finished products meet pre-established specifications, such as, for purity, potency, stability and sterility. If data integrity is breached in any manner or in absence of credible data, the product becomes of dubious quality in the eyes of drug regulators.

Manufacturing related ‘Data Integrity’ is usually breached, when data from a database is deliberately or otherwise modified or destroyed or even cooked.

Over the last several years, ‘Data Integrity’ related issues in India are attracting enormous attention of both the USFDA and the MHRA, UK. As a result, concerned pharma manufacturing facilities are receiving Import Alerts/Warning Letters from the respective overseas drug regulators, refusing entry of those medicines mostly in the United States and some in the UK.

Recent warning letters:

Just over a year – from May 2013 to July 2014, around a dozen ‘Warning Letters’ have been sent to the Indian drug manufacturers by the USFDA on ‘Data Integrity’ related issue, as follows:

Recent ‘Warning Letter’ issued to: Date of issue
1. Marck Biosciences Ltd. 08. 07. 2014
2. Apotex Pharmachem India Pvt Ltd. 17. 06. 2014
3. Sun Pharmaceutical Industries 07. 05. 2014
4. Canton Laboratories Private Limited 27. 02. 2014
5. USV Limited 06. 02. 2014
6. Wockhardt Limited 25. 11. 2013
7. Agila Specialties Private Limited 09. 09. 2013
8. Posh Chemicals Private Limited 02. 08. 2013
9. Aarti Drugs Limited 30. 07. 2013
10. Wockhardt Limited 18. 07. 2013
11. Fresenius Kabi Oncology Ltd 01. 07. 2013
12. RPG Life Sciences Limited 28. 05. 2013

(Source: RAPS, 19 August 2014)

Another report states that USFDA has, so far, banned at least 36 manufacturing plants in India from selling products in the US.

Importance of US for Indian generic players:

Generic drugs currently contribute over 80 percent of prescriptions written in the US. Around 40 percent of prescriptions and Over The Counter (OTC) drugs that are sold there, come from India. Almost all of these are cheaper generic versions of patent expired drugs. Hence, India’s commercial stake in this area is indeed mind-boggling.

The ‘Data Integrity’ issue is not restricted to just US or UK:

A report quoting researchers led by Roger Bate, an American Enterprise Institute scholar and funded by the The Legatum Institute and the Humanities Research Council of Canada, concluded that many Indian pharma companies follow double manufacturing standards, as they are sending poor quality drugs to Africa compared to the same pills sold in other countries. This study was based on tests of 1,470 samples produced by 17 Indian drug manufacturers.

Besides India, the researchers took drug samples from pharmacies in Africa and middle-income countries, including China, Russia and Brazil.

According to this paper, the researchers found that 17.5 percent of samples of the tuberculosis therapy rifampicin sold in Africa tested substandard, which means the drug has less than 80 percent of the active ingredient than what it should otherwise. Against this number, in India, 7.8 percent of the medicine sampled was found substandard.

Moreover, Almost 9 percent of samples of the widely used antibiotic ciprofloxacin sold in Africa tested substandard, as compared to 3.3 percent in India.

Thorny issues around golden opportunities:

Much reported breach in manufacturing ‘Data Integrity’ detected at the manufacturing sites in India, are throwing fresh doubts on the efficacy and safety profile of generic/branded generic medicines, in general, produced in the country and more importantly, whether they are putting the patients’ health at risk.

A new analysis by the U.S. National Bureau of Economic Research pointed out some thorny issues related to ‘Data Integrity’ of drugs produced by the Indian pharmaceutical companies, which supply around 40 percent of the generic drugs sold in the United States, as stated above.

The researchers examined nearly 1,500 India-made drug samples, collected from 22 cities and found that “up to 10 percent of some medications contained insufficient levels of the key active ingredients or concentrations so low, in fact, that they would not be effective against the diseases they’re designed to treat.”

The report also highlighted that international regulators detected more than 1,600 errors in 15 drug applications submitted by Ranbaxy. The Bureau Officials commented that these pills were “potentially unsafe and illegal to sell.”

Frequent drug recalls by Indian pharma majors:

The above findings came in tandem with a series of drug recalls made recently by the Indian pharma companies in the US.

Some of the reported recent drug recalls in America, arising out of manufacturing related issues at the facilities of two well-known Indian pharma majors, which are going to merge soon, are as follows:

  • Sun Pharmaceuticals recalled nearly 400,000 bottles of the decongestant cetirizine (Zyrtec) and 251,882 of the antidepressant venlafaxine (Effexor) this May, because the pills failed to dissolve properly. The drugs were distributed by the drug maker’s US subsidiary Caraco Pharmaceutical Laboratories, but were manufactured in India.
  • In the same month – May, Ranbaxy recalled 30,000 packs of the allergy drugs loratadine and pseudo-ephedrine sulphate extended release tablets because of manufacturing defects in packaging.
  • In March, Sun Pharma recalled a batch of a generic diabetes drug bound for the US after an epilepsy drug was found in it. A patient discovered the error after noticing the wrong medication in the drug bottle.
  • Again in March, Ranbaxy recalled nearly 65,000 bottles of the statin drug atorvastatin calcium (Lipitor) after 20-milligram tablets were found in sealed bottles marked 10-milligrams. A pharmacist in the U.S. discovered the mix up.

Indian media reinforces the point:

Indian media (TNN) also reported that there is no quality control even for life-saving generic drugs and the government is apathetic on ensuring that the quality protocol of these drugs is properly observed.

This happens, as the report states, despite government’s efforts to push generic drugs, as they are more affordable. The report gave an example of a life-saving drug, Liposomal Amphotericin B, which is used to treat fungal infections in critically ill patients.

Are all these drugs safe enough for Indian Patients?

Though sounds awkward, it is a fact that India is a country where ‘export quality’ attracts a premium. Unintentionally though, with this attitude, we indirectly accept that Indian product quality for domestic consumption is not as good.

Unfortunately, in the recent years, increasing number of even ‘export quality’ drug manufacturing units in India are being seriously questioned, warned and banned by the overseas drug regulators, such as USFDA and MHRA, UK, just to ensure dug safety for the patients in their respective countries.

Taking all these into consideration, and noting increasing instances of blatant violations of cGMP standards and ‘Data Integrity’ requirements for ‘export quality’ drugs, one perhaps would shudder to think, what could possibly be the level of conformance to cGMP for the drugs manufactured solely for the consumption of local patients in India.

A cause of concern, as generic drugs are more cost effective to patients:

It has been widely recognized globally that the use of generic drugs significantly reduces out-of-pocket expenditure of the patients and also payers’ spending.

The findings of a study conducted by the Researchers from Brigham and Women’s Hospital (BWH), Harvard Medical School and CVS Health has just been published in the Annals of Internal Medicine on September 15, 2014. In this study the researchers investigated whether the use of generic versus brand name statins can play a role in medication adherence and whether or not this leads to improved health outcomes. The study concluded that patients taking generic statins were more likely to adhere to their medication and also had a significantly lower rate of cardiovascular events and death.

In this study, the mean co-payment for the generic statin was US$10, as against US$48 for brand-name statins. It is generally expected that the generic drugs would be of high quality, besides being affordable.

I deliberated on a related subject in one of my earlier blog posts of November 11, 2013 titled, “USFDA” Import Bans’: The Malady Calls For Strong Bitter Pills”.

Conclusion:

According to USFDA data, from 2013 onwards, about 20 drug manufacturing facilities across India attracted ‘Import Alerts’ as against seven from China, two each from Australian, Canadian and Japanese units and one each from South African and German facilities.

Unfortunately, despite intense local and global furore on this subject, Indian drug regulators at the Central Drugs Standard Control Organization (CDSCO), very strangely, do not seem to be much concerned on the ‘Data Integrity’ issue, at least, not just yet.

In my view, ‘Data Integrity’ issues are mostly not related to any technical or other knowledge deficiency. From the “Warning Letters” of the USFDA to respective Indian companies, it appears that these breaches are predominantly caused by falsification or doctoring of critical data. Thus, it basically boils down to a mindset issue, which possibly pans across the Indian pharma industry, irrespective of size of operations of a company.

Indian Prime Minister’s passionate appeal aimed at all investors, including from India, to “Make in India” and “Sell Anywhere in The World”, extends to pharma industry too, both local and global. The drug makers also seem to be aware of it, but the ghost keeps haunting unabated, signaling that the core mindset has remained unchanged despite periodic lip service and public utterances for corrective measures by a number of head honchos.

Any attempt to trivialize this situation, I reckon, could meet with grave consequences, jeopardizing the thriving pharma exports business of India, and in that process would betray the Prime Ministers grand vision for the country that he epitomized with, “Make in India” and “Sell Anywhere in The World”.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Drugs From The Same Indian Plant: Safe For Europe, Unsafe For America, Why?

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Good number of stories on US-FDA banning several drug manufacturing facilities of major domestic players of India over serious quality related issues, have been doing the rounds since about a year and almost at a regular interval.

The quagmire has snowballed into serious apprehensions on the quality of Indian generic drugs, across the globe. Various statements of US-FDA Commissioner Margaret Hamburg, during her much talked about maiden visit to India, in February 2014, added further credence to the issue.

“If you want our market, meet our standards”:

During Hamburg’s India visit, her reported candid warning to the Indian drug exporters to America added further fuel to the above concern in India. She clearly underscored:

“If you want our market, meet our standards.”

Even in the face of this stern warning, when major drug manufacturers of India, such as, Ranbaxy, Wockhardt, Sun Pharma and some others continued to fail in meeting US-FDA drug quality standards in their respective plants, I wrote the following in one of my earlier blog posts titled, “Does India Believe in Two Different Drug Quality Standards?”:

“In a situation like this, especially when many Indian manufacturers are repeatedly failing to meet the American quality standards, the following questions come up:

  • Is the US-FDA manufacturing requirement too troublesome, if not oppressive?
  • If not, do the Indian and other patients too deserve to have drugs conforming to the same quality standards?

Answers to these questions are absolutely vital to convince ourselves, why should Indian patients have access to drugs of lower quality standards than Americans, with consequential increase in their health risks?”

The first question on ‘troublesomeness’ now partly answered?

This is because another recent media report brought to the fore that, having completed their assessment of drug manufacturing violations at Ranbaxy’s facility in Toansa, European regulators have said although deficiencies were found, they pose no risk to public health. The regulators said they were satisfied by corrective measures put in place by the company after U.S. regulators found deviations in January.

The report also highlights that this assessment of the European regulators stands in stark contrast to the response of US regulators to the deficiencies found at the same plant.

It is worth noting that US-FDA continues to restrict Ranbaxy from making and selling pharmaceutical ingredients from the Toansa facility “to prevent substandard quality products from reaching US consumers.”

The same plant meets drug safety standards of Europe, but ‘unsafe’ for America!

Quite contrary to the above stern statement of US-FDA, according to the above report from Reuters, European drug regulators commented as follows:

“The inspection team concluded that there was no evidence that any medicines on the EU market that have an active pharmaceutical ingredient manufactured in Toansa were of unacceptable quality or presented a risk to the health of patients taking them.” 

The further added, “This conclusion was supported by tests of samples of these medicines, all of which met the correct quality specifications.”

Regulatory audit standards were the same for both EU and US regulators:

It is also interesting to note from the report that according to a statement from the US-FDA:

“EMA and FDA inspected the Toansa facility using similar quality standards and underlying principles of current good manufacturing practices.”

Was the decision of US-FDA ‘import ban’ subjective?

This critical question arises because of another US-FDA statement that states as follows:

“While inspections were similar, the two regulatory authorities applied their own, differing, regulatory and legal standards to address the violations.”

Subjectivity in decision-making could encourage “Conspiracy Theory”:

Generic drugs currently contribute over 80 percent of prescriptions written in the US. Around 40 percent of prescriptions and Over The Counter (OTC) drugs that are now sold in the United States come from India. Almost all of these are cheaper generic versions of patent expired drugs. Total annual drug export of India, currently at around US$ 15 billion, is more than the domestic turnover of the pharma industry. Hence, India’s commercial stake in this area is indeed mind-boggling.

In a situation like this, the apprehension of subjectivity in the decision making process of US-FDA related to ‘import bans’, if linked with, say for example, even the missed opportunities for ‘first to launch’ generic versions of several patent-expired blockbuster drugs in the United States by Ranbaxy, could lead to much undesirable ‘Conspiracy Theory’, further souring the relationship between India and America.

As I mentioned in one of my earlier blog posts titled “Loss of Ranbaxy Gain of Big Pharma…And Intriguing Coincidences”, when the emerging dots associated with the missed opportunities for ‘first to launch’ generic versions of drugs like, Lipitor (Pfizer), Diovan (Novartis) and Nexium (AstraZeneca) are connected, an uncomfortable pattern could emerge favoring Big Pharma and obviously adversely affecting Indian companies like Ranbaxy.

The First Dot: Uncertainty over Lipitor generic launch:

Like many other large Indian players, ‘first to launch’ strategy with the new generic drugs has been the key focus of Ranbaxy since long, much before its serious trouble with the US-FDA begun in 2008. ‘Import Bans’ on two of its manufacturing facilities by the US regulator in that year created huge uncertainty in its launch of a generic version of Pfizer’s anti-lipid blockbuster drug Lipitor in 2011. On time launch of a generic version of Lipitor was estimated to have generated a turnover of around US$ 600 million for Ranbaxy in the first six months and commensurate loss to Pfizer for the generic entry.

Despite its neck deep trouble with the US-FDA at that time, Ranbaxy ultimately did somehow manage to launch generic Lipitor, after partnering with Teva Pharmaceutical of Israel.

The Second Dot: Indefinite delay in Diovan generic launch:

Lipitor story was just the beginning of Ranbaxy’s trouble of not being able to translate its ‘first to launch’ advantage of patent-expired blockbuster drugs into commercial success, thus allowing the Big Pharma constituents to enjoy market monopoly with their respective blockbuster drugs even after patent expiry.

Despite Ranbaxy holding the exclusive rights to market the first generic valsartan (Diovan of Novartis and Actos of Takeda) for 180 days, much to its dismay, even after valsartan patent expiry in September 2012, a generic version of the blockbuster antihypertensive is yet to see the light of the day. However, Mylan Inc. has, now launched a generic combination formulation of valsartan with hydrochlorothiazide.

US-FDA drug ‘Import Ban’ from the concerned manufacturing facility of Ranbaxy gave rise to this hurdle favoring the Big Pharma, as discussed above.

As a result, Novartis in July 2013 reportedly raised its guidance announcing that the company now expects full-year sales to grow at a low single-digit rate, where it had earlier predicted net sales to turn up flat. It also guided for core earnings to decline in the low single digits, revising guidance for a mid-single-digit drop.

The Third Dot: Delay in Nexium generic launch:

Ranbaxy had earlier created for itself yet another opportunity to become the first to launch a generic version of the blockbuster anti-peptic ulcerant drug of AstraZeneca – Nexium in the United States, as the drug went off patent on May 27, 2014. However, due to recent US-FDA import ban from its Toansa plant, this opportunity too seems to be fading away for Ranbaxy.

Delay in the launch of generic Nexium, which incidentally is the second-biggest seller of AstraZeneca, would make a big impact on the predator-chased company’s profit.

With the global sales of Nexium at US$ 3.87 billion and US sales at US$ 2.12 billion in 2013, retaining its monopoly status in the all-important US market beyond the end of May would not only limit a forecast decline in AstraZeneca’s 2014 earnings, but would also protect bonuses for top management of the British pharma giant, as the above report says.

Conclusion:

Let me hasten to add yet again, while highlighting the stark differences of interpretations on drug quality standards of the same plant between the European and American regulators and connecting the dots of significant missed opportunities of the Indian drug manufacturers, I do not intend to postulate any ‘Machiavellian Hypothesis’.

I just wanted to establish that both alleged ‘subjective’ decision making process of the US-FDA and coincidences of a series of missed opportunities encountered by the Indian drug manufacturers related to first to launch generics in America are now realities, which if remain unaddressed could germinate into a ‘Conspiracy Theory’, at least in some corners. This could further sour existing Indo-US relationship.

While, I am confident that the new government of India with its, so far, well demonstrated ‘Can Do’ spirit would take these critical issues up in the ensuing bilateral ministerial level meetings, an immediate and in-depth study should also be initiated with valuable inputs from the independent experts to ferret out the real reasons behind these facts, including:

  • Why are the cGMP related issues in India repeatedly arising mainly with the US-FDA?
  • Are  the requirements of the US-FDA though too onerous for the Indian drug manufacturers, yet reasonable as per global norms?
  • If so, how come the drugs manufactured in the same Indian plant though declared unsafe by the US-FDA, considered safe by the European regulators?

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

 

 

The Takeover Magician To Tango Again On A Bold New ‘Sunny’ Tune

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The consolidation process of the Indian pharmaceutical industry continues in its own pace. Most recently, the homegrown pharma takeover magician is all set to tango yet again with a bold ‘Sunny’ tune. The low profile creator of high value ‘Sun Pharmaceuticals’, that he painstakingly built from the scratch facing many turbulent weather over nearly three decades, is ready to go for the gold, yet again.

The cool, composed and the decisive business predator is now in the process of gobbling up, quite unexpectedly, the much ailing prey – Ranbaxy. This acquisition of a distressed asset, would make Sun Pharmaceuticals a pharma behemoth not just in India with a jaw-dropping 9.33 percent share of the Indian Pharma Market (IPM), but also would help catapulting the company to become the 5th largest generic pharmaceutical company globally.

Ranbaxy – A sad example of value destruction:

It is worth recapitulating that in 2008, Daiichi Sankyo paid reportedly US$ 4.6 billion to acquire 63.8 percent stake in Ranbaxy.

After Sun Pharma’s acquisition of Ranbaxy with US$ 3.2 billion in 2014, Daiichi Sankyo will hold just 9 per cent of Sun Pharma, which is currently worth US$ 2 billion. Such an example of value erosion of a pharma giant in a little over 5 year period is not just unique, but very sad indeed.

Keeping the “Sunny” side up”:

It is expected that post acquisition, Sun Pharma would continue to keep its ‘Sunny Side’ up, maintaining the corporate name of the merged entity as ‘Sun Pharma’.

Ranbaxy name, in any case, is not so popular, either inside or outside India after the US-FDA fiasco, casting aspersions on the quality of products that it manufactures.

Moreover, the history indicates that this is exactly what happened when Abbott acquired Piramal Healthcare, Zydus bought over Biochem or even Torrent took control of Elder.

Ranbaxy name could probably exist as a division of Sun pharma in future, if at all.

Post acquisition IPM league table:

According to AIOCD AWACS, extrapolating the post acquisition scenario on the league table (MAT February 2014) of the Top 10 Pharma majors in India, it looks as follows:

Rank Company Value Rs. Crore Market Share % Growth %
1 Sun Pharma Group 6,741 9.33 8.8
2 Abbott Group 4,758 6.59 4.6
3 Cipla 3,493 4.84 8.5
4 Zydus Group 3,116 4.31 9.7
5 GSK 2,727 3.78 -14.7
6 Lupin 2,457 3.40 12.4
7 Alkem Group 2,433 3.37 10.1
8 Mankind 2,257 3.12 7.6
9 Pfizer + Wyeth 2,150 2.98 3.0
10 Emcure Group 2,048 2.83 15.5
Total IPM 72,236 100.00 6.0

(Source: AIOCD AWACS)

Distancing from No. 2 by a mile:

With the above unprecedented chunk of the IPM, Sun Pharma would distance itself from the (would be) second ranking Abbott with a whopping 2.74 percent difference in market share, which would be equivalent to the turnover of the 10th ranking pharma player in the domestic pharma market.

In its pursuit of corporate excellence, Sun Pharma has made 13 acquisitions between 1990s and 2012.  Post merger, the revenue of the combined entity is estimated to be around US$ 4.2 billion with EBITDA of US$ 1.2 billion for the 12-month period that ended on December 31, 2013.

Merger consolidates ‘Domestic Pharma’ market share:

This acquisition would also tilt the balance of ‘Domestic Pharma’ Vs. ‘Pharma MNC’ market share ratio in the IPM very significantly, as follows:

Current Market Share Ratio

Post Acquisition Market Share Ratio

Domestic Pharma Vs. Pharma MNC

73.4 : 26.6

77.2 : 22.8

(Source: AIOCD AWACS)

Further, this trend is also expected to allay the lurking fear of many about the robustness and future growth appetite of the domestic pharma industry, thus becoming an easy prey of pharma MNC predators.  It is believed that such an apprehension was prompted by a series of large ‘Brownfield FDIs’ coming into the Indian pharma industry to acquire a number of important local assets.

The key challenges:
1. Sun Pharma too is under US-FDA radar:
As we know that along with Ranbaxy, Wockhardt and some others, Sun Pharma has also come under the USFDA radar for non-compliance of the Current Good Manufacturing Practices (cGMPs).

Under the prevailing circumstances, it would indeed be a major challenge for Sun Pharma to place its own house in order first and simultaneously address the similar issues to get US-FDA ‘import bans’ lifted from four manufacturing plants of Ranbaxy in India that export formulations and API to the United States. This is quite a task indeed.

2. Pending Supreme Court case on Ranbaxy:

Prompted by a series of ‘Import Bans’ from US-FDA on product quality grounds, the Supreme Court of India on March 15, 2014 reportedly issued notices to both the Central Government and Ranbaxy against a Public Interest Litigation (PIL) seeking not just cancellation of the manufacturing licenses of the company, but also a probe by the Central Bureau of Investigation (CBI) on the allegation of supplying adulterated drugs in the country.

Ranbaxy/ Sun pharma would now require convincing the top court of the country that it manufactures and sells quality medicines for the consumption of patients in India. No doubt, all these issues were factored-in for relatively cheap valuation of Ranbaxy.

3. CCI scrutiny of the deal:

Out of the Top 10 Therapy Areas, the merged company would hold the top ranking in 4 segments namely, Cardiac, Neuro/CNS, Pain management and Gynec and no. 2 ranking in two other segments namely, Vitamins and Gastrointestinal.

Noting the above scenario and possibly many others, the Competition Commission of India (CCI), after intense scrutiny, would require to take a call whether this acquisition would adversely affect market competition in any of those areas. If so, CCI would suggest appropriate measures to be completed by these two concerned companies before the deal could take effect. This would also be a task cut out for the CCI in this area.

4. SEBI queries:

Securities and Exchange Board of India (SEBI), has sought information from Sun Pharmaceutical on stock price movement and the deal structure.

According to reports, this is due to “Ranbaxy shares showing good movement on three occasions: first in December, then in January and subsequently in March 2014, just before the deal was announced.” This has already attracted SEBI’s attention and has prompted it to go into the details.

The opportunities:

That said, there are many opportunities for Sun Pharma to reap a rich harvest out of this acquisition. The most lucrative areas are related to Ranbaxy’s missed opportunities for ‘first to launch’ generic versions of two blockbuster drugs – Diovan (Novartis) and Nexium (AstraZeneca).

Diovan (Novartis):

Despite Ranbaxy holding the exclusive rights to market the first generic valsartan (Diovan of Novartis and Actos of Takeda) for 180 days, much to its dismay, even after valsartan patent expired on September 2012, a generic version of the blockbuster antihypertensive is still to see the light of the day. However, Mylan Inc. has, now launched a generic combination formulation of valsartan with hydrochlorothiazide.

Nexium (AstraZeneca):

Ranbaxy had created for itself yet another opportunity to become the first to launch a generic version of the blockbuster anti-peptic ulcerant drug of AstraZeneca – Nexium in the United States, as the drug goes off patent on May 27, 2014. However, due to recent US-FDA import ban from the concerned plant of Ranbaxy, it now seems to be a distant reality. Unless…

Sun Pharma has reportedly 10 manufacturing plants in India and 8 in the US, besides having other production facilities in Israel, Mexico, Hungary, Canada, Bangladesh and Brazil. Post acquisition, the combined entity will have operations in 65 countries with 47 manufacturing facilities spanning across 5 continents, providing a solid platform to market specialty and generic products globally. With all these, the above key issues would perhaps be addressed expeditiously.

Leaving aside those two big opportunities, post merger, Sun Pharma is expected to have around 629 ANDAs waiting for approval, including first-to-file opportunities in the United States, besides the current ongoing businesses of the merged company.

What about cost synergy?

Though Sun pharma promoters have given an indication about the revenue synergy, nothing is known, as yet, about the targeted details of cost synergy after this acquisition.

Conclusion:

I reckon, the consolidation process in the Indian pharmaceutical industry would continue, though with a different pace at different times, involving both the domestic pharma and MNCs as the predators.

Even before ‘The Breaking News’ of this brand new well hyped acquisition came from Reuters, in the ‘Corporate World’ of India, Dilip Shanghvi used to be known as an unassuming and astute self-made business tycoon blessed with a ‘magic wand’ deeply concealed in between his two ears, as it were. Folks say, at an opportune time, wielding this ‘wand’, he confidently turns distressed pharma assets into money-spinners and has proved it time and again with grit, grace and élan in equal measures.

Can he do it again? Well…Why not?

Thus, while acquiring the ailing Ranbaxy with a value for money, the takeover magician, prepares for his best shot ever, wielding the same magic wand yet again, to steer the new company from an arduous, dark and complex path, hopefully, to a bright frontier of sustainable excellence.

Let’s hope for the best, as the ‘Tango’ begins…on a bold new ‘Sunny’ tune.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

Loss of Ranbaxy, Gain of Big Pharma…And Two Intriguing Coincidences

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In March 2014, the largest pharma player of India by market capitalization, Sun Pharma, became the latest of the large Indian pharma exporters facing the US-FDA ‘Import Ban’ for drugs manufactured at its Gujarat-based plant. This news came as a shocking surprise to many, including the stock market, as the home grown company has now attained an international stature being governed by a professional management team and steered by a Board that is chaired by a well-regarded non-Indian with decades of experience in the global pharmaceutical industry.

Just before that in January 2014, being slapped with the US-FDA drug ‘Import Ban’ of Active Pharmaceutical Ingredients (API) manufactured in its Toansa Plant of Punjab, the pharmaceutical business of Ranbaxy in the United States, with the products manufactured in its approved manufacturing facilities in India, came to a screeching halt.

It is worth noting that similar ‘Import Bans’ are already in place for the same company’s Dewas, Paonta Sahib, and Mohali production facilities. The combined impact of these bans now makes Ohm Laboratories plant of Ranbaxy, located in New Jersey, its sole generic drug manufacturing facility for the US market.

Considering that the US sales of Ranbaxy reportedly used to be around 57 percent of its total global turnover even in 2012, these import bans are undoubtedly a huge blow to the company, both financially as well as in terms of its business reputation.

Thus, the top priority of Ranbaxy under this situation is effectively addressing all the issues as raised by the US-FDA, especially in the area of documentation, as in the buyers’ market sellers cannot be the choosers.

A ‘Double Whammy’:

Meanwhile, prompted by theses ‘Import Bans’ on product quality ground and adding further woes to the company, the Supreme Court of India on March 15, 2014 reportedly issued notices to both the Central Government and Ranbaxy on a Public Interest Litigation (PIL) seeking not just cancellation of the manufacturing licenses of the company, but also a probe by the Central Bureau of Investigation (CBI) on the allegation of supplying adulterated drugs in the country.

Thus, it is a double whammy for Ranbaxy. The company would now require convincing the top court of the country that it manufactures and sells quality medicines for consumption of the patients in India.

However, Ranbaxy reportedly insisted that the drugs sold by it in the Indian market are safe and effective and that the company complies with all regulations of the country.

Could the situation now get even murkier?

During the process of judicial scrutiny, if the Supreme Court gets convinced with the above reply of Ranbaxy on this issue, the question that could possibly emerge is, how come the same company produces high quality drugs for the patients in India and allegedly substandard quality drugs for the patients of the United States? This could make the subject more complicated, if not murkier, internationally.

Two intriguing coincidences:

In the midst of all these, while connecting various similar looking and important dots, emerged during the last few years, a couple of clear coincidences comes to the fore, as follows:

1. Is the drug quality issue in India for exports limited only to US-FDA?

This brings us to the first interesting coincidence of drug ‘Import Bans’, involving large Indian drug exporters, coming mostly, if not only, from the US-FDA, although there are so   many other drug importing countries, including rest of the developed world.

Moreover, none of the Indian domestic companies had ever faced similar number of USFDA ‘Import Bans’ in the past, though they have been exporting to the United States from their FDA approved and inspected plants since quite a while. Therefore, it is worth figuring out why has it started happening now, that too repeatedly, and involving some of the largest global generic drug manufacturers from India.

Ranbaxy too is a large global player for generic pharmaceutical products. Besides India and the United States, the company markets its products both in East and West Europe, Latin America, Africa, Middle East, South Asia, South-East Asia and Asia-Pacific regions. Interestingly, though its saga related to US-FDA cGMP conformance in the four plants, culminating into drug ‘Import Bans’ in the United States, commenced as early as 2008, the company does not seem to have any issue with any other drug regulator anywhere in the world, not just yet.

According to the media report, UK and Australian drug regulators had commented that they are assessing the impact of the US action on Ranbaxy products sold in their countries. However, as on date Ranbaxy’s drug export to all those countries continue to remain as normal as before.

If over a period of time, it is proved that other foreign drug regulators do not have any similar quality related issues with Ranbaxy manufactured products, a serious joint evaluation of the entire chain of events related to Ranbaxy and others by the global regulatory experts would perhaps be warranted to provide a lasting solution on the subject.

2. Missed opportunities for ‘first to launch’ generic versions of blockbuster drugs:

The second coincidence is related to a series of missed opportunities, especially for Ranbaxy, related to ‘first to launch’ generic versions of several patent expired blockbuster drugs in the United States.

When the emerging dots associated with such lost opportunities for drugs like, Lipitor (Pfizer), Diovan (Novartis) and Nexium (AstraZeneca) are connected, a clear pattern emerges favoring Big Pharma and obviously adversely affecting companies like Ranbaxy.

Saga started with uncertainty over Lipitor generic Launch:

Like many other large Indian players, ‘first to launch’ strategy with new generic drugs has been the key focus of Ranbaxy since long, much before its serious trouble with the US-FDA begun in 2008. ‘Import Bans’ on two of its manufacturing facilities by the US regulator in that year created huge uncertainty in its launch of a generic version of Pfizer’s anti-lipid blockbuster drug Lipitor in 2011. On time launch of a generic version of Lipitor was estimated to have generated a turnover of around US $ 600 million for Ranbaxy in the first six months.

Despite its neck deep trouble with the US-FDA at that time, Ranbaxy ultimately did manage to launch generic Lipitor, after partnering with Teva Pharmaceutical of Israel.

The story continued with indefinite delay of Diovan generic launch:

Lipitor story was just the beginning of Ranbaxy’s trouble of not being able to translate its ‘first to launch’ advantage of patent-expired blockbuster drugs into commercial success, thus allowing the Big Pharma constituents to enjoy the market monopoly with their respective blockbuster drugs even after patent expiry.

Despite Ranbaxy holding the exclusive rights to market the first generic valsartan (Diovan of Novartis and Actos of Takeda) for 180 days, much to its dismay, even after valsartan patent expiry in September 2012, a generic version of the blockbuster antihypertensive is yet to see the light of the day. However, Mylan Inc. has, now launched a generic combination formulation of valsartan with hydrochlorothiazide.

US-FDA drug ‘Import Ban’ from the concerned manufacturing facility of Ranbaxy gave rise to this hurdle favoring the Big Pharma, as discussed above.

As a result, Novartis in July 2013 reportedly raised its guidance announcing that the company now expects full-year sales to grow at a low single-digit rate, where it had earlier predicted net sales to turn up flat. It also guided for core earnings to decline in the low single digits, revising guidance for a mid-single-digit drop.

Would it also delay the launch Nexium generic?

Ranbaxy had earlier created for itself yet another opportunity to become the first to launch a generic version of the blockbuster anti-peptic ulcerant drug of AstraZeneca – Nexium in the United States, as the drug goes off patent on May 27, 2014. However, due to another recent US-FDA import ban from the concerned plant of Ranbaxy, it now seems to be a distant reality.

That said, it has now been reported that Ranbaxy is in talks with at least two companies on sourcing ingredients for the generic version of Nexium to be able to launch its generic formulations in the United States immediately after the patent expiry.

In this context, any delay in the launch of generic Nexium, which incidentally is the second-biggest seller of AstraZeneca, would have a big impact on the company’s profit.

With the global sales of Nexium at US$ 3.87 billion and US sales at US$ 2.12 billion in 2013, retaining its monopoly status in the all-important US market beyond the end of May would not only limit a forecast decline in AstraZeneca’s 2014 earnings, but would also protect bonuses for top management of the British pharma giant, the above report says.

No Machiavellian Hypothesis:

By highlighting these coincidences, I have no intention to even attempting to postulate something like a ‘Machiavellian Hypothesis’. I just want to establish that intriguing coincidences do exist whatever may be the reasons.

Probably an in-depth study by independent experts in this field would be able to ferret out the real reasons behind these coincidences, including, why are the cGMP issues repeatedly arising only with the US-FDA?

Conclusion:

Be that as it may, delayed generic launches of Nexium (AstraZeneca) with US sales of US$ 2.12 billion, together with the same for Actos (Takeda) and Diovan (Novartis) recording a combined sales for US$ 8.55 billion, have indeed created almost a wind-fall gain for the respective ‘Big Pharma’ constituents and consequent huge losses for Ranbaxy. The first-to-file bonus on Actos alone was estimated to be more than US$ 200 million.

Though the US-FDA Commissioner Margaret Hamburg has reportedly clarified that the United States is ‘not targeting’ Indian pharma companies but just following a strict quality control regime for all products being imported into America, the following critical questions still float at the top of mind:

- Are all these missed opportunities of Ranbaxy, which favored Big Pharma immensely, just sheer coincidences of clash in timings between USFDA ‘Import Bans’ from four of its manufacturing facilities and the respective launch dates in the United States for the first generic versions of the three blockbuster drugs?

- When Indian generic drug manufacturers continue to export across the world without any problem thus far, why is a series of unprecedented ‘Import Bans’ on quality grounds now coming from the US-FDA in a quick succession decimating the image of Indian generic drug manufacturers?

At the end of the narrative, some wise men could well say that I am trying to connect the dots that do not exist at all. These are all imaginary or at best, sheer coincidences. It could well be just that, who knows? But…

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Threats to Indian Generics: Failing in US Inspections is Just Half The Story

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At a recent event of the American Enterprise Institute, Dr. Harry Lever, a senior cardiologist at the Cleveland Clinic in Ohio, reportedly expressed his concern based on his personal experience regarding inconsistent quality among Indian generics. As a result, he requires switching patients off them, almost routinely, for desired therapeutic effects.

Many reasons may be attributed to such medical concerns on Indian generics in the United States, however limited those may be, the core issue can nevertheless be wished away.

Back home in India, many doctors reportedly have also expressed similar apprehensions on the quality of many generic formulations produced by over 10,000 pharmaceutical manufacturers in the country.

US-FDA on its part has taken action to protect health safety of the patients in the United States through import bans of drugs manufactured in all those facilities, which failed to meet its cGMP standards during inspection.

Not an old story:

Not so long ago, just in 2013, quality related concerns with generic drugs exported by India came to the fore after Ranbaxy reportedly pleaded guilty and paid a hefty fine of US$ 500 million for falsifying clinical data and distributing ‘adulterated medicines’ in the United States.

Thereafter, US-FDA banned drug imports from Ranbaxy and Wockhardt, manufactured in all those facilities that failed to conform to its cGMP quality standards.

Those are the stories for generic formulations. Most recently, following yet another ‘import ban’ and this time for Active Pharmaceutical Ingredients (API) manufactured at its Toansa plant, Ranbaxy has suspended all shipments of APIs pending review. With this step, Ranbaxy would virtually have no access to the top pharmaceutical market of the world.

A not very responsible remark either:

Unfortunately, in the midst of such a scenario, instead of taking transparent and stringent measures, the Drug Controller General of India (DCGI) was quoted as saying, “We don’t recognize and are not bound by what the US is doing and is inspecting. The FDA may regulate its country, but it can’t regulate India on how India has to behave or how to deliver.”

The DCGI made this comment as the US-FDA Commissioner Margaret Hamburg was wrapping up her over a weeklong maiden trip to India in the wake of a number of ‘Import Bans’ arising out of repeated cGMP violations by some large domestic generic drug manufacturers. Whereas, Hamburg reiterated the need for the domestic drug makers of India to make sure that that the medicines they export are safe for patients, the DCGI’s above comment appears rather arrogant and out of tune, to say the least.

Just recently, on the above comments of the DCGI, the American Enterprise Institute reportedly commented, “Indian drug regulator is seen as corrupt and colliding with pharma companies…”

Failing in US-FDA inspection is just half of the story:

Around 40 percent of prescriptions and Over The Counter (OTC) drugs that are now sold in the United States come from India. All most all of these are cheaper generic versions of patent expired drugs. Total annual drug export of India, currently at around US$ 15 billion, is more than the domestic turnover of the pharma industry. Hence, India’s commercial stake in this area is indeed mind-boggling.

It is now well known, if such ‘Import Bans’ continue or grow due to shoddy compliance of required cGMP standards, there could be a serious challenges for the Indian drug exporters to salvage their reputation on drug quality for a long time to come. Consequently, this will offer a crippling blow not just to their respective organizational business outlook, but also to future drug exports of India. It is worth mentioning that drugs and pharmaceuticals are currently a net foreign exchange earner for the country.

The other half of the story:

Threats related to export of Indian generic drugs on quality parameters, as flagged by the US-FDA in India, is just half the story. The other half of the story begins in the US, instead of in India, and is related to stringent new measures taken by the same regulator in its own land to have a check on the quality of imported generic drugs consumed by the patients in America.

A recent report highlights that around twelve academic centers of the United States are now involved in the firstever widespread safety and quality evaluation of generic drugs. This program is run by the US-FDA and would continue through 2017.

This initiative has been prompted by the fact that generic drugs currently contribute over 80 percent of prescriptions written in the US. In 2014, the said program will reportedly focus on cardiovascular drugs, ADHD treatments, immune-suppressants, anti-seizure medicines, and antidepressants. The grand plan is highlighted to project the priority emphasis of the US-FDA on the quality of generic drugs, especially after it banned medicine import from four India-based facilities over a period of last nine months.

Some Examples:

- A widespread testing program of USFDA followed its 2012 finding that generic copies of antidepressant medication Wellbutrin XL did not work as good as the original. This study eventually led the largest generic drug player of the world -Teva to withdraw its generic version from the market in 2012.

- According to the report, US-FDA is now reviewing a 2013 study done by a Boston-based researcher that found widespread impurities in the generic version of Pfizer’s anti- cholesterol drug Lipitor manufactured outside of the US. The research reportedly found that some generic versions of Lipitor produced overseas were rendered ineffective as a result of manufacturing impurities. However, US-FDA action on the same is not known, as yet.

Thus, the other half of the story unfolds the reality that, even if any exporter escapes USFDA inspection in India, there is a fair chance now that the generic formulations could be tested in the US itself under the above program and if found wanting in quality parameters, concerned generic formulation could face a ban in the United States.

Conclusion:

There is nothing like tightening all loose knots in the required cGMP process for all drugs manufactured in India, without bothering much about their testing in the US. If the drug quality consciousness becomes robust in the shop floor, well before the products leave the shores of India, there is no reason why the country would face similar embarrassing incidents in future, along with a strong global furore.

The US-FDA Commissioner’s recent calling on the DCGI to join hands with the US to enforce more rigorous oversight of drug manufacturing facilities, needs to be followed up with due earnest, the above avoidable comment of the DCGI not withstanding.

The Commissioner reportedly reiterated that the US would increase the number of FDA inspectors in India from 11 to 19 as it intensifies inspections of drug manufacturing plants, simultaneously with arranging cGMP compliance related workshops for the drug exporters. The DCGI also made an announcement that India intends to increase its inspectors from 1,500 to 5,000 over the next five years.

A deepening economic spat over cheaper generic drugs, not withstanding, all these good intents to maintain a robust drug quality standard need to be translated into reality.

Trying to find ghosts nurturing dubious intentions against India, especially in areas pertaining to drug quality standards, may not augur well for the patients at large, not just of the United Stated, but for our own homeland too.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.