The Indian pharmaceutical industry has been stable in terms of its regulatory compliance record for the United States compared to other emerging markets, says CareEdge Ratings. But there is room for improvement when it comes to its European counterparts, it pointed out in a recent study.

The number of Warning Letters (WL) and Import Alerts (IA) relative to the total inspections has declined to 11 percent in the calendar year (CY) of 2023, a drop from the 15 per cent and 16 per cent seen in CY 2017 and CY 2020, respectively, the study said.

Compliance Status

“Furthermore, India’s record of such regulatory compliance has outshoned its largest counterpart, China, apart from some others like Mexico and Korea; however, it still lags behind its European counterparts such as the United Kingdom, Germany, Italy, and Spain, indicating room for improvement,” the study added.

In fact, the compliance record at about 11 per cent of inspections receiving a regulatory directive of some sort has been stable for over a decade, despite the number of manufacturing plants in India seeing an increase, Krunal Modi, Director at CareEdge Ratings, told businessline. Further, he added that Indian drugmakers were well placed to handle the corrective measures required of them.

“Any measures taken by the USFDA are part of their ongoing commitment to ensuring the safety and effectiveness of pharmaceutical products, without bias towards any country. In terms of compliance history, India holds a commendable position given its substantial number of USFDA-approved manufacturing facilities,” Modi said.

“When examining the total number of IAs and WLs received by Indian firms, it is noteworthy that for larger companies with annual revenues exceeding ₹1,000 crore, the number has remained low, between 2-4 per annum, from 2014 to 2023. Furthermore, these large pharmaceutical companies are adopting risk mitigation strategies such as site transfers and product filings from multiple locations to limit the overall impact on export revenue due to any adverse actions on one site,” he added.

While an increase in compliance costs is expected, there is also“a significant growth opportunity for the Indian pharmaceutical industry due to the large number of products going off-patent in the US market. However, the increased scrutiny by the USFDA for adherence to c-GMP (current Good Manufacturing Practices) norms continues to be a significant risk for Indian pharmaceutical companies, given their reliance on the US market,” he observed.

Inspection Outcomes

In CY23, the USFDA carried out more than 220 inspections in India. Even with an increase in USFDA-approved manufacturing sites in India, the proportion of Official Action Initiated (OAI) observations by the USFDA has stayed consistent at 10 per cent of total inspections in CY23, the study said.

“This indicates that, despite the increase in USFDA-approved manufacturing facilities in India, operational quality and compliance with Current Good Manufacturing Practices (c-GMP) have been largely maintained. India experienced its most challenging phase from CY13 to CY17, with OAI observations ranging between 15 and 20 percent. Since then, there has been a marked improvement in the compliance standards of Indian pharmaceutical companies,” the study said.