The U.S. Food and Drug Administration (USFDA) announced sweeping expansion of unannounced inspections at foreign manufacturing facilities, a move expected to significantly impact pharmaceutical exporters, particularly in India and China.
The policy shift builds on the USFDA’s pilot program in both countries and aims to eliminate the long-standing disparity between domestic and foreign inspections. Until now, overseas facilities often received advance notice, unlike their U.S. counterparts.
“For too long, foreign companies have enjoyed a double standard,” said USFDA Commissioner Dr. Martin A. Makary. “That ends today.”
The USFDA conducts around 3,000 foreign inspections annually, many of which involve Indian pharmaceutical plants that supply a substantial share of generic drugs to the U.S. market.
"Despite the advanced warning that foreign firms receive, the FDA still found serious deficiencies more than twice as often than during domestic inspections," the agency said.
Impact on Indian pharma
India, often dubbed the “pharmacy of the world,” is home to over 600 FDA-registered manufacturing sites. Companies like Sun Pharma, Dr. Reddy’s, Cipla, and Aurobindo Pharma rely heavily on U.S. exports for revenue.
The USFDA’s move to unannounced inspections could increase compliance costs as firms must maintain constant audit readiness, and heighten regulatory risk, especially for facilities with prior warning letters or Form 483 observations. There will also be
pressure on margins if production disruptions follow adverse inspection outcomes.
But however this will boost credibility for compliant firms, potentially improving trust and market share.
The FDA emphasized that the new approach is part of a broader strategy to ensure that all products entering the U.S. are “safe, legitimate, and honestly made.”
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
