The import alert issued by the United States Food and Drug Administration (FDA) on one of Wockhardt’s Indian manufacturing facilities could not have come at a more inopportune time for the Mumbai-based drug-maker, as well as for the domestic pharmaceutical industry.

An "import alert" results in detention without physical examination of drugs from firms that have not met the mandated good manufacturing practices. The latest development involving Wockhardt comes close on the heels of Indian drug-maker Ranbaxy’s decision to pay $500 million to settle fraud and criminal charges against itself in the US.

Wockhardt would take a Rs 550-crore hit on its annual revenue, said Chairman Habil Khorakiwala, on the impact of the import alert on one of its manufacturing units at Waluj, near Aurangabad. The plant makes injectibles and other solid dose forms of medicine. The company was taking steps to address the problem, including shifting some of the manufacturing to a different facility to reduce the impact, he added. Wockhardt shares closed down 11 per cent on the BSE on Friday.

The nature of the concerns raised by the FDA had not been outlined, said a pharmaceutical regulatory expert. Depending on the nature of the issues raised by the FDA, it could take anywhere between six and 18 months to resolve, he added.

A strong dose

For Wockhardt, the tryst with the FDA came just as the debt-saddled company was on the mend. It had hit hard times in 2008, with the global economic slowdown being the tipping point. The company had to grapple with a Rs 3,800-crore debt, and a slew of assets acquired in the heady pre-recession days.

But it lived to tell the tale, and emerged from the several litigations against it by unhappy foreign lenders. Its debt was restructured by the banks and some of the companies it acquired were sold, the last being the Rs 1,600-crore sale of its nutrition business to Danone.

Bitter pill

Sujay Shetty, PricewaterhouseCooper's India-head for pharmaceuticals, observes that the timing is unfortunate, in that Wockhardt’s import alert comes even before the dust settles on the Ranbaxy issue. But they are company specific issues and will not dent the image of the entire industry, he said. The US regulator has closed down plants of multinational companies in the US too, he points out.

The US regulator has become more stringent, and Indian companies need to be more vigilant about their processes and data, said P.V. Appaji, Director-General of Pharmaceuticals Export Promotion Council of India.

Since the pharmaceutical world is lobby-infested, Indian companies will have to get their act together, said a regulatory expert, adding that the latest developments would make it more time-consuming for companies to get approvals in the US market.

jyothi.datta@thehindu.co.in

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