A hard drumbeat of U.S. FDA complaints against more than two dozen companies in India for quality violations has affected 39 drugmaking facilities, creating an avalanche of remedial work that could take years and is steadily driving up medicine costs in the United States.
In a special report, the Financial Times detailed the cost in figures and prestige for a core industry in the country and one hailed by Prime Minister Narendra Modi as a key to boosting manufacturing jobs.
The FT said it counted 6 Indian drugmakers that had manufacturing sites hauled up by the FDA this year alone. Altogether, there have been 39 manufacturing cites encompassing 27 companies. from the world's fifth largest generics maker, Sun Pharmaceutical Industries, to Mumbai-based Wockhardt's recent spate of massive product recalls.
The figure does not include testing facilities recently sanctioned by the European Medicines Agency in the case of GVK Biosciences, or by the World Health Organization in the cases of Quest Life Sciences and Svizera Laboratories.
The FT said a focal point of each plant action has been record-keeping and laboratory tests on quality. High-profile plant bans have also noted poor sanitation, all of it leading to a basic issue of trust.
"Trust has eroded so much among foreign regulators, I don't think they take anything that's said at face value," Dinesh Thakur, a whistleblower who pointed out fraud in testing at Ranbaxy Laboratories to U.S. regulators in a case that led to a $500 million fine against the company and criminal charges in 2013, told the newspaper.
Last year, Indian drug exports gained a tepid 3%, the FT said, citing the Pharmaceutical Export Council of India, well below rates above 12% for much of the past decade and drawing concern by key clients such as Express Scripts ($ESRX).
Thakur told the newspaper that the issue of quality is cultural.
"As a culture, we've accepted that if it meets 80% of our requirements, that's OK," he told the FT. "This is not a systemic pharmaceutical industry problem. This is a systemic cultural problem."
D.G. Shah, secretary-general of the Indian Pharmaceutical Alliance, told the newspaper that companies are changing quickly and moving to eliminate problems by working with the FDA, but price and cost pressures are growing at the same time in the home market, affecting emerging markets around the globe.
"Importing countries benchmark their prices against the domestic price," Shah told the FT.
At the same time, growth hopes at home are soaring with a report released this week saying the domestic generic drug market may reach $27.9 billion by 2020 from $13.1 billion now, linked in part to FDA approvals for Indian pharma companies, according to industry body Assocham and market research firm RNCOS.