In June, when the U.S. FDA lifted the years long ban on Sun Pharma’s Halol plant it was great news not only for the company but for the whole manufacturing industry. Share prices of India’s largest drug maker greeted the news with a slight upswing. At the same time, pharma stocks reflected an overall positive sentiment on that day.

The U.S. regulator slapped restrictions on some of the products manufactured in the  facility at Halol, located in the western Indian state of Gujarat, in 2015 following a site inspection which reported deviations in the manufacturing process. Since then, Sun Pharma has been working with the agency to get the issues listed in Form 483 sorted out.

The FDA clearance of the Halol plant was crucial for Sun Pharma as the products made in  the facility used to be a major contributor to its export earnings. The company’s sales revenues from the U.S. market started declining soon after the ban. Removal of supply restrictions in the Halol factory, which is designed to manufacture specialized products, could significantly boost Sun’s top line growth in the year 2019, analysts forecast.

The long running Sun saga is an interesting example illustrating how persistent Indian generic firms are when it comes to the U.S. market. Several of the Indian manufactures, both big and small, are currently at various stages of addressing the issues pointed out by the FDA, which they deem, probably, the toughest regulatory agency in the whole world.

Flagging the world’s largest pharma market as their most important destination, more than 500 companies are supplying pharmaceutical products to the U.S. They together fill as much as one billion prescriptions made in the country. In 2017, Indian firms supplied about $12 billion worth of formulations to the U.S. market, according to reports.

Recent pro-generic reforms initiated by the FDA also helped Indian companies to expand their market share in the U.S. They claim nearly 40 percent of all filings to the agency and the number of ANDA approvals are going up exponentially every year.

Just as submissions increase, the number of warning letters has also been rising. Manufacturing lapses continue to vex the companies regardless of their size and rank. Until a couple of years ago, almost half of all the warning letters issued by the FDA went to Indian suppliers.

However, the scenario has started showing signs of a slow turnaround, analysts say. The generic makers have begun to acknowledge the problems afflicting their manufacturing-a stance contrary to the earlier one which is, largely, defensive.

A recent industry report by McKinsey & Co. says Indian manufacturers are receiving a lower proportion of warning letters from the FDA. The agency cleared 51% of the inspected companies without making any adverse observations in 2017. The figure was only 32% two years ago. At the same time, the number of FDA inspections to the factories located in India fell to 192 from 272 over the same period.

The proportion of warning letters has dropped, though facilities in India received more letters in absolute terms, finds the report commissioned by the Indian Pharmaceutical Alliance (IPA), a group of leading domestic companies.

Now the companies are putting in more efforts and investments to improve awareness on the importance of compliance and build capabilities. As in the case of Sun Pharma, most of them also work closely with the regulators for identifying and resolving the issues.

Meanwhile, expedited generic approvals by the FDA led to the entry of more players into the U.S. marketplace. With more products joining the fray, established firms often encounter stiff competition from relatively smaller new entrants, as well.

On many occasions, it happens to be that Indian companies find the fiercest competition from none other than firms from their own homeland. For instance, when Dr. Reddy’s received clearance for omeprazole and sodium bicarbonate combo (generic of Zegerid), Ajanta Pharma too bagged the same from the FDA the same day.

A small to mid-cap player from Mumbai, Ajanta added over a dozen ANDA approvals to its portfolio over the last year and a half. Now the company is readying a pipeline to substantially increase the number of filings targeting up to seven percent of its annual sales revenue from the U.S. this fiscal year.

However, the issues pertaining to manufacturing compliance is far from over. Manufacturers from India need to work even harder to benchmark themselves with the standards and practices that are being constantly updated by leading regulators.

About the author
S. Harachand is a pharmaceutical journalist based in Mumbai. He can be reached at harachand@gmail.com.