Saturday, March 22, 2014

Sun Pharma's turn

Sun Pharma joins the list of Indian generic drug makers to face sanctions from the US FDA. The plant whose products have been barred from import into the US is a Gujarat based manufacturer of the antibiotic cephalosporin. Not surprisingly, the news has sent Sun Pharma's share price into a dive, even though company spokespersons and analysts both downplay the significance of the ban, stating that it will have little impact on Sun Pharma's overall sales in the US.

As FDA scrutiny of Indian generic manufacturers increases, we can expect many more such headlines to be made. However, it's important to note that the FDA has not yet specified the nature of the violations found at the plant. They may very well turn out to be minor issues that do not materially affect the quality of the drugs being made. Unless of course, we have Ranbaxy-style falsification of records and contamination of drugs, in which case any panic is entirely justified.


  1. Thanks for such an interesting and informative blog. After reading your
    posts few questions come into my mind. Are these series of bans on products
    of Indian pharma a result of US FDA being stricter or the pharma companies
    have poor QA process? What about the drugs these companies make for Indian
    customers or for EU market? Do the drugs we give to our near and dear ones
    not pass the quality standards?

    1. Based on my understanding, the series of bans appear to be a combination of both the factors you mention. Given that Indian companies now supply nearly 40% of all generic drugs to the US market, the increased scrutiny by the US FDA is understandable. The FDA has also publicly stated that they will be paying greater attention to QC/QA in Indian manufacturing plants. As I mention above, poor QA is a problem when it means that sub-standard drugs are being produced. I don't think all QA violations fall into this category, though. Certainly in Sun Pharma's case we need to wait and see exactly what the problem is.

      The second question you raise is a more troubling one. Unfortunately, drug regulation in India is very opaque, and the main regulatory organization (the Central Drugs Standard Control Organization), which also serves as a certifying authority for drugs supplied to the EU, was the subject of a scathing report presented to the Rajya Sabha in 2012. I will be posting about this report shortly, but the summary was that the CDSCO, rather than being an independent regulator, was found to be hand-in-glove with drug manufacturers to maximise profit while allowing serious ethical violations and fraudulent practices to go unchecked.

      I don't mean to suggest that all generics in the Indian market would fail international quality standards. But the fact that our main regulatory authority was found to be so incompetent only a few years ago is worrying.