Indian pharma's long road to redemption

In 28 years in India’s pharmaceuticals sector, Rajiv Desai has never been busier. Most of the last six months on his calendar is marked green, indicating visits to the 12 plants of Lupin, India’s No.2 drugmaker, where Desai is a senior quality control executive. Only one day is red — a day off. 

That’s what is needed these days to satisfy the US Food and Drug Administration’s (FDA) standards. “In this sector, you’re only as good as your last inspection,” Desai says. 

Often dubbed “the pharmacy of the world”, India is home to the most FDA-approved plants outside of the US. But sanctions and bans have damaged its reputation and slowed growth in the $16-billion sector. Exports fell in the financial year ending March 2017. More than 40 plants have been banned by the FDA for issues ranging from data fraud to hygiene since India’s then-largest Ranbaxy was pulled up for violations in 2008. 

Companies have spent millions on training, equipment and foreign consultants. Yet the Indian Pharmaceutical Alliance (IPA) of the top 20 firms says its members need at least five more years to get manufacturing standards and data reliability up to scratch. 

The case of Lupin shows why. The FDA is in the next few months expected to clear Lupin’s Goa plant, which supplies around a third of its US sales, of problems found in 2015, Desai said. However, the agency published a new notice last week citing issues with data storage at its Pithampur plant. 

“A lot of companies will struggle to meet the requirements that are the need of the day, and I would expect to see additional consolidation on the supply side,” CEO Vinita Gupta told analysts. 

Asked about Lupin’s case, the FDA said in a statement it did not “comment on compliance matters”, but said generally: “India’s regulatory infrastructure must keep pace ensuring relevant quality and safety standards are met.” 

However, G N Singh, head of India’s own standards body Central Drug Standard Control Organisation, said, “Indian companies are compliant with our manufacturing standards. We cannot regulate them according to the US standards.” 

Lupin on Sunday said it was planning to consolidate its generic portfolio across geographies, including the US, with a focus on expansion of complex and specialty products. It said it may look at acquisitions, besides enhanced investment in research and development. The US market accounts for around 48 per cent of the company’s total revenues.  

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