Indian pharma firms swallow bitter pill in US, EuropeLast week, Lupin, Matrix Laboratories and Unichem Laboratories’ UK subsidiary Niche Generics figured in the list of companies under investigation by the European Commission for “knowingly delaying” the generic launch of a cardiovascular drug, Perindopril, by teaming with the innovator of the drug, Laboratories Servier. The European Commission said it would probe anti-trust violations against these manufacturers.

A fortnight before that, the share prices of Sun Pharmaceutical, India’s largest drug maker in terms of market capitalisation, crashed 12 per cent after the US authorities raided three manufacturing facilities and stopped production at its US subsidiary, Caraco Pharmaceuticals, for violation of current good manufacturing practices (cGMP). The move came as a big shock for Sun Pharma, since the US drug watchdog’s action will shave a minimum 10 per cent off its revenues in 2009-10.

 

 

STRONG MEDICINE

Major regulatory actions against Indian pharmaceutical firms in 2009

MARCH.  FDA asks Glenmark Generics to stop marketing three versions of morphine sulphate, allows to sell after ten days

MAY.  Lupin warned by FDA for cGMP violations at one of its facilities

JUNE. FDA raids Sun’s US subsidiary Caraco and bans drugs from all three production facilities

JULY. Lupin, Matrix and Unichem’s UK subsidiary to face European Commission’s anti-trust probe for drug launch delays

JULY. Jubilant and Wockhardt forced to withdraw an anti-hypertension drug from the UK after its contract manufacturer in India failed UK regulatory audit

 

Neither Sun Pharma nor Caraco knows when they can restart production, since the process it involves legal procedures and rectifying the defects cited by the Food and Drug Administration (FDA). “It is difficult to give a timeline for when we can resolve the issues. Once we have completed our assessment, we may consider giving a revised sales growth guidance for 2009-10,” a Sun Pharma spokesperson said.

If last year was the annus horribilis for India’s largest drug company, Ranbaxy Laboratories, 2009 was worse for many other Indian pharmaceutical companies. Apart from Lupin, Matrix, Unichem and Sun, others such as Wockhardt, Glenmark and Granules India (see table) also faced the regulatory heat in the US and the UK during this year. That’s bad news, since the US and Europe account for half of the Rs 47,000 crore exports by Indian pharma companies.

In 2008, the FDA had banned 29 Ranbaxy drugs for manufacturing problems at two of its plants in India and for manipulating the data submitted to the regulator. The US accounts for almost one-fourth of Ranbaxy’s revenues and the banned drugs accounted for 15 per cent of the US business. The FDA is currently reviewing Ranbaxy’s corrective action plan, submitted in May this year, and the company will soon discuss the way forward with regulators.

So, why are Indian drug companies on the run in the US and the UK? Pharma companies are wary of commenting on the issue, barring offering the proforma “we are cooperating with the regulator” answers. Sujay Shetty, associate director, PricewaterhouseCoopers, said the US regulator was under pressure as a result of concerns in that country on the quality of drugs and active pharmaceutical ingredients coming from countries such as India and China. This might have caused the regulator to enforce the rules strictly, especially after the “heparin incident,” he said.

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