India's drug and CRO manufacturing travails gather pace as New Delhi calls on diplomats to help

India Prime Minister Narendra Modi

Repeated quality violations by Indian drug manufacturing and contract research firms are casting a long shadow on the country's hopes to be a key global supplier of medicines and services. And they come at a particularly acute time for Biocon, which opens an initial public offering for its Syngene unit next week.

First up is India's Aurobindo Pharma as the latest domestic drug manufacturer to be notified by the U.S. FDA that one of its plants has come up short in a recent inspection, the Economic Times reports.

This news came swiftly on the heels of trouble at Emcure Pharmaceuticals and a list that includes Wockhardt plus Sun Pharmaceutical Industries and its Ranbaxy Laboratories unit, among others.

An unofficial tally has seen at least 20 Indian drugmakers receive import alerts since 2013 when a broad crackdown began by the FDA on manufacturing quality.

India's Bharatiya Janata Party, which came to power in May 2014, has stepped up efforts to get domestic drug firms to improve quality, while also seeking advice at home and abroad on how to navigate the stricter U.S. enforcement.

GVK Biosciences CEO Manni Kantipudi

However, New Delhi has also asked diplomats in Europe to avert fallout on India's generic drug exports from recent moves by the European Medicines Agency to halt imports of medicines that had validation conducted by GVK Biosciences, the Financial Express has reported.

Pharmaceutical exports from India are currently worth around $15 billion annually, according to the Financial Express, with generics more than 90% of the market.

The aim of the "diplomatic campaign," the Financial Express said, citing official sources, is to get regulators to reconsider and reverse their finding and restore the reputation of GVK Biosciences and Indian validation procedures.

The EMA issue began in May when investigators from France's Agency for Medicines and Health Products Safety examined 9 trials conducted at GVK's Hyderabad facility. The inspection found GVK employees repeatedly switched outpatient ECG scores with those of healthy volunteers.

Quest Life Sciences managing director T.S. Jaishankar

It was followed by a stinging rebuke from the World Health Organization to CRO Quest Life Sciences this month over falsified ECGs in an HIV drug trial.

The series of events across manufacturing and research come ahead of a closely watched IPO for the extent of foreign participation.

Biocon will open its IPO on July 27 and run it till July 29. The offer should see it cut its stake to about 74% from nearly 84% and use the funds of about $95 million to fund parent company growth plans, according to Reuters. Last month, India's Foreign Investment Promotion Board sharply hiked the foreign investment limit allowed to 44% from 10% in the IPO.

Syngene works with clients such as Merck & Co. ($MRK) and Bristol-Myers Squibb ($BMY), as well as handling in-house work for Biocon.

Earlier this year, when Biocon sold a 10% stake in the research unit, Syngene was valued at about $600 million.

It remains to be seen if the repeated incidents in manufacturing and CROs cast a shadow on demand for Syngene shares. But the pace of inspections industry-wide has caused concern about the scope for more investment in either manufacturing or services.

In the case of Aurobindo, the FDA said that a weeklong inspection at its Unit 12 manufacturing site raised quality management system issues, the Economic Times said, citing a source familiar with the results. The unit mainly exports products such as tazobactam and piperacillin, an antibacterial injection to the U.S., the newspaper said.

"However, the company has taken up the task of addressing the issues and will file the remediation report with the FDA," this source told the Economic Times.

The company declined to comment to FiercePharmaAsia on the report.

Two years earlier, the FDA had lifted a ban imposed on one of Aurobindo's important manufacturing facilities, Unit 6, which was also inspected in the current round with on "minor" issues, the Economic Times said.

- here are stories from the Economic Times and Financial Express

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