A warning letter from the US regulator on three of its manufacturing facilities could not have come at a worse time for Dr Reddy’s Laboratories (DRL).

The company was on the remedial track at its Srikakulam plant, having faced regulatory action about a year ago.

But what seems to have “surprised” the street is that two more plants (Miryalaguda and Duvvada) have come under the regulatory scanner, says an industry insider.

Explaining the levels of risk the company now faces, the industry-hand says, two of the three facilities make Active Pharmaceutical Ingredients (API) that gets used by DRL or could get sold to other drug-makers to make their finished forms of medicine.

So in that sense, the direct risk to customer or patient is less, as the product does not directly go into the market. The third plant making finished cancer products is relatively new and is yet to show significant filings if any, he points out.   The real rub will come when details of the deviations become public, he says.

With the latest development, DRL joins a host of other Indian drug majors who are undertaking remedial action on violations pointed out by the USFDA.

The key for DRL, as for the others, to get out of the woods quickly is to ensure “immediate corrective action and long term preventive action,” says the industry expert.

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