Global Insight Perspective | |
Significance | India has the largest number of FDA-approved manufacturing facilities outside the United States. India and China are the top two suppliers of active pharmaceutical ingredients (APIs) to the United States and account for a significant portion of the US$42-billion drug imports. |
Implications | The debate focuses on the low count of FDA inspections to India compared with the quality and safety check frequencies conducted in the United States. Although there have been no product recalls in the recent past, Ranbaxy and Wockhardt have been served with inadequate documentation warnings by the FDA. |
Outlook | Indian firms will regard the calls for stricter regulations with some caution, pointing out that the U.S. industry is trying to create a potential trade barrier. Short-term drug imports from India are not expected to be affected and would in fact increase supply if a U.S. FDA office is opened in the country. |
Made in India Drugs
The rise of India as one of the leading global suppliers of low-cost generic drugs is showing signs of strain as doubts emerge concerning the quality and safety of pharmaceutical products manufactured in the country. The Washington Post has put the number of inspections carried out by the U.S. FDA in India during 2006 at 32; in contrast, 1222 quality assurance inspections were carried out in the United States in the same year. The aim of the inspections has started to worry U.S. industry experts, who point out that the agency has conducted the inspections when Indian pharma firms sought approval for generic drugs, active pharmaceutical ingredients (APIs), or for ”reviewing companies participating in the U.S. President's Emergency Relief Fund AIDS” (PEPFAR). The report highlights that FDA inspections to India and China—also a major supplier of APIs—were pre-planned, with surprise inspections for quality checks being quite rare, as opposed to the frequent surprise FDA visits in the United States. The agency has cited financial constraints as one of the major reasons for the relatively low number of Indian visits, adding that it is not possible to document ”poor quality or contaminated drugs from Asian facilities causing adverse reactions to patients'. The matter is gaining prominence, as calls from Indian firms for a similar presence by the U.S. FDA grows.
Indian Drug Industry's Growing Presence in U.S. market |
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Source: Washington Post, IMS Health, cited by Interphex India |
Outlook and Implications
The issue mainly highlights two elements: the U.S. industry's response to India’s emergence as a serious contender for low-cost generic and over-the-counter (OTC) drugs, and the continuing problems surrounding the FDA's operations. Indian pharmaceutical manufacturers will not be overtly surprised by the doubts regarding the quality of Indian-manufactured drugs, and will quickly point out that Big Pharma and U.S. generic companies alike have been facing similar manufacturing problems in the recent past. The Indians will also highlight the debate as a possible trade issue, citing other instances in which the United States’ domestic industry has tried to erect trade entry barriers to restrict foreign imports, and that it may not be possible to limit drug imports as U.S. health industry stakeholders—primarily consumers—are increasingly turning to generic drugs in an attempt to cut high healthcare costs.
However, key issues surrounding the FDA's actions remain. The suggestion of a more permanent FDA presence in the South Asian region will have positive effects for leading Indian and Chinese manufacturers looking to increase their presence in the United States. The timeline for an FDA visit is usually pre-planned and time consuming, delaying the generic version or API's launch in the intended market; a local FDA presence will help to speed up the proceedings. It is likely to encourage small medium-sized Indian companies to foray into the U.S. market.
The staggering drug trade statistics are in favour of the Indian and Chinese industries, also featuring Europe and Japan in the list of countries that the United States imports from. U.S. drug regulators will not be able to ignore these countries’ growing influence in the U.S. market over the coming years.