Updated: January 21, 2020 11:46:08 am
The US Food and Drug Administration more than doubled the number of warning letters to Indian drugmakers in 2019, another sign that the world’s biggest market for generic medicines is cracking down on its largest single supplier.
The sanctions may delay about 18 per cent of new products Indian companies were planning to introduce in the US, according to a report Monday from Crisil Ltd, the local unit of S&P Global Ratings. This may slow the industry’s sales growth to about 10 per cent in this financial year and next from 16 per cent last year.
“Large players are banking heavily on successful launch of complex generic products – these filings have risen to about 25 per cent of the overall new product pipeline from nearly zero three years ago,” according to the report. “A substantial delay in resolution of regulatory issues and/or heightened scrutiny could derail the US growth story.”
The FDA has been under pressure to clamp down on the generic drug industry after the carcinogen NDMA was found in multiple versions of the blood-pressure medicine valsartan in 2018. Crisil compared the number of warnings between January-October 2019 with the same period a year earlier. A warning letter bars new products from the affected facility.
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India saw a similar surge of FDA regulatory actions in 2015 after Ranbaxy Laboratories Ltd, then the nation’s biggest drugmaker, was found to be manipulating data.
While the FDA’s current concerns focus on issues like cleanliness and should be easier to resolve, Crisil estimates that remediation efforts could shave as much as 1.5 per cent off the industry’s operating profit margin.
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