Indian pharma cos need to step-up safeguards at plants: Handa

In the last five months, plants of nine Indian pharmaceutical companies - Cipla, Dr Reddy’s, Sun Pharma, Cadila, Lupin and Natco Pharma.- have come under the US Food and Drug Administration (FDA) scanner. So, the big question is what is really ailing India’s pharma sector and what is the outlook going forward? To provide clarity on this, CNBC-TV18’s Shereen Bhan caught up with Kewal Handa, Former MD, Pfizer India.Handa says, India is basically the largest supplier of generic drugs to the USA but it is not the only country where US FDA is issuing observations. Globally too, he says, number of cases have gone up. India, he thinks, does not have a strong rigour of plant inspections and the audits under the Indian FDA rules are not as stringent as those under US FDA. Therefore, it is important for Indian drug companies to step-up processes, safeguards at plants, he adds.Meanwhile, the Indian FDA is attempting to get more inspectors but it is still not enough.The US Law has increased mandated inspection of Indian drug plants and the observations are more to do with data integrity issues over here, says Handa. The management of companies need to have a proper governance system, a good value system and a good training at the grassroots level to avoid such repeated issues, he says. The Current Good Manufacturing Practice (CGMP) in India is much lower than that of the USFDA requirements, he says. Below is the transcript of Kewal Handa’s interview with CNBC-TV18's Shereen Bhan. Q: Let me start by asking you to explain this to us. Is there a schedule for instance that the US Food and Drug Administration (FDA) follows because it seems like there is a rash of observations coming in from the US FDA not just for plants of Lupin which is the case today but Dr Reddy's, Cadila, a bunch of other companies, Natco Pharma all recently have gotten observations, warning letters from the US FDA. Can you explain this process to us and why does it seem like the US FDA is on overdrive today? A: In 2012, the US FDA passed a bill called US Food Safety and Innovation Bill whereby the plants which were outside US now would be audited regularly. Prior to that only seven percent of the plants were getting audited every year as compared to the plants which were in US - 97 percent of them were audited once in two years. So, the bill also says the backlog of audit will be completed within five years. So, what we are seeing today is that they have increased the number of audits in this country, they have increased the number of inspectors doing the audit and therefore you are seeing more such cases coming up. Now, in global world India is not the only country where such cases of 483 and import alerts have taken place but globally also we have seen that number of cases have gone up. Q: So you are saying the number of cases have gone up because the US is actually going ahead with much more of the audit process. But what seems to be the problem as far as India is concerned in specific because a lot of the observations that we are picking up across different pharma companies and of course different facilities seem to be similar in nature? A: Globally, the major 483 are given for two areas is production and processes, that is manufacturing, production and processes and also for correcting and remedying the action plans. But in India what we are observing is more often data integrity issue where deliberately, consciously either we fudge the data or we hide the data, we use poor excipients, poor raw materials, we use rejected materials and this is something that is within the control of the management and it requires a proper governance system, a good value system and a good training at the grassroots level to avoid such repeated problems. Q: If the USFDA seems to be finding so many faults or so many issues with Indian facilities, where is the Indian drug regulator. We haven’t heard anything from the Indian drug regulator about the supply of these drugs to the Indian market, to the domestic market for instance ?A: India does follow a Current Good Manufacturing Practice (CGMP), which is what all the plants are approved for. However we do not have a very strong rigour of inspection of the plants. Very recently there was a press item which says that now they are going to appoint almost about 20 inspectors to do about 200 plant units which is just a drop in the ocean.We need to have a same type of frequency of audit as is laid down in the USFDA. Also remember that the CGMP of India is much lower as compared to the stringent requirement of USFDA. So, there are two different  types of audits that you will see, the USFDA audit would be still tougher in spite of the fact that you may pass the CGMP of India audit.Coming on the Lupin case. I believe what Lupin is saying that  they believe it is a voluntary action indicated. The final report has not yet come, this is just an inspection, observation.Final report can be a voluntary action indicated or it could be an official action indicated. When it is an official action  indicated then you are crossing that border and probably there would be a warning letter and then an import alert and therefore the plant may have to shut down.Q: What does this mean now as far as brand India is concerned? We are the low cost manufacturing hub, we are the generics hub of the world. This rash of observations that seem to be coming in not just from the USFDA but you also have the UK regulator for instance making similar observations, what does this mean as far as brand India is concerned?A: Indian export and Indian generic export is still very grand. We are the largest supplier of generic products to US. US needs us, we need US. US needs us because they are increasing the generic proportion in their global pharmaceutical business and they want to go upto 75 percent. So, they need us and we need US. Therefore recently the top Indian company owners and CEOs got together and said what is that we need to do to build brand India image? I think now they are realising it that you can't take shortcuts, you can't play with audits, quality is not just for inspection, quality is all the time and everywhere. I think that is something that they have to realise if they want to play in the US markets.