Macro Moves

Why USFDA increases strict check on Indian Pharmaceutical Companies?

Created on 05 Nov 2019

Wraps up in 3 Min

Read by 2.5k people

Updated on 10 Sep 2022

USFDA scanning cipla, abbott, sun pharma, primax

USFDA Whip Continues on Indian Pharma. It’s raining warning letters and inspection reports on Indian pharmaceuticals. Why is this a matter of concern?

How does the regulatory body classify its action?

Food & Drug Administration (FDA, also known as USFDA) is currently on a scrutinizing spree for Indian pharmaceuticals. It was just yesterday that Cadila’s Moraiya facility received a warning letter from the USFDA. How serious is this? Well, If this goes one step further i.e. if it’s placed under an ‘Import Alert’ the formulation unit will have to stop its exports (By the way, this facility accounts for 45% of the firm’s US sales). 

Why so Serious?

Just in case you were thinking that currently India is the most attractive market for everything as the world is looking forward to it, here’s an exception. When it comes to pharmaceuticals, US alone holds more than 45% of global pharmaceutical market. Also, along with Canada and Mexico it represents the largest continental pharma market worldwide!

So, now you would have started to understand why the Indian pharmaceuticals are (and they should be) worried. As a matter of fact, a major chunk of revenues earned by the Indian pharmaceuticals depends on the approvals from USFDA.

The Various Levels of USFDA Action

Whenever there’s a criminal proceeding, it doesn’t directly start with the ‘third degree’ torture, right? There are phases of interrogation and then if the accused doesn’t cooperate, he/she is given the third degree. Similarly, there are 6 levels of actions based on the findings of USFDA, final level being ‘Import Ban’.

The levels of actions are mentioned below:

1.  No Action Indicated (NAI) – This simply means that nothing was found in the inspection and the firm can continue its operations as it is.

2.  Voluntary Action Indicated (VAI) – This in simple terms means that certain objectionable conditions or practices were found but only to an extent that the firm could correct it by itself.

3.  Official Action Indicated (OAI) – This is where the company needs to start being worried. This means that flaws were serious and administrative or regulatory actions will be recommended.

4.  Form 483 – When this is issued it means that the firm needs to answer the questions raised upon its functioning, failing to which it would face next level of action.

5.  Warning Letter – This is an escalation of form 483 and the penultimate level of proceeding for irregularities found during a pharmaceutical’s inspection. The name is quite clarifying in itself.

6.  Import Ban – This is the ultimate action taken by USFDA and a nightmare for pharmaceuticals. A company needs to stop its exports if it’s listed under Import Ban.

To bring this legal information into perspective, you might now be able to relate why pharmaceuticals are worried upon issuance of a warning letter or even form 483.

Will Indian Pharma Players be Able to Write Their own Destiny?

It’s nothing new that Indian product is put under question for quality concerns. Especially when it comes to food and drugs, India doesn’t hold a track record, something to be proud of. Where’s this heading?

Probably, the time has come when we need stricter quality control measures so that besides being an attractive market globally, we could also be known for producing and exporting quality stuff. Because, if both of these work in sync, the economy will prosper more rapidly. And better, we might also have access to better quality products!

Hope you liked this information. Comment below with your opinions/suggestions.

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Ayushi Upadhyay

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A Keen Learner. Tiny, brainy, and studious, this quiet one stays in her zone until she pops. And once she does, boy, are her comebacks snappy! There is no financial question that she can't answer through her magical blog-writing. 

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