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Credibility Crisis

The Indian pharmaceutical sector has been cited as a “flagship” sector by Prime Minister Modi’s government. It has one of the highest numbers of FDA, Medicines and Healthcare products Regulatory Agency (MHRA) and WHO Good Manufacturing Practice (GMP) approved manufacturing facilities for medical ingredients and formulations outside the US and Europe (1). These facilities are responsible for a quarter of all medicines consumed in the UK and make nearly 40% of generic drugs and over-the-counter products sold in the US, as well as develop many drugs and vaccines used by global aid agencies for health programmes (2). On paper, the industry is blossoming – so why, in reality, is it in the middle of a credibility crisis?

Increasing Doubts

Regulators from across the globe are becoming more and more worried about Indian manufacturing practices, with 39 drug-making facilities having been blacklisted by the FDA over the past few years. In 2015 alone, six Indian drug makers lost clearance to produce medicines for US consumers due to regulatory problems, while the EU banned 700 Indian-made generic drugs – voicing concerns about the credibility of their clinical trials.

To add to this, the increase in the number of FDA warnings against Indian manufacturers has risen from 9 to 15 over the past two years, and the consequences of this are significant. Import bans and regulatory fines are levied for noncompliance, which can dramatically erode existing trust and reputation; two qualities that are extremely difficult to reclaim in a highly competitive global industry. Pharma companies worldwide are, therefore, beginning to review their alliance plans with Indian drug makers, and influential pharmacy benefit managers from the US already seem to be looking for alternatives to India, as they have started to wonder whether the risks actually outweigh the benefits. The FDA has also formally indicated that it has stepped up oversight and scrutiny of Indian drug traders.

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Vivek Chaturvedi is currently Vice President of the EMEA Chemicals Practice at Hitachi Consulting. He has worked in the chemicals and life sciences industry for over 15 years, leading and delivering large-scale operational transformation projects in a variety of global settings with Big Pharma, biotechnology, CROs and medical devices companies.
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