India faces the coming year still mired in a long list of U.S. FDA manufacturing compliance failures that have snared the top generics makers and overshadowed domestic reform efforts--but that might change drastically.
A failure to adequately maintain records, cleanliness and follow procedures at more than two dozen plants across India means they are now barred from sending drugs to the U.S. That may seem like a job for a take-no-names consulting firm to fix.
But industry watchers said that it is the top management at drugmakers who will have to beat the drum in 2016 on quality and spend money and time on the problems, as well as make hard calls.
For one industry veteran, a management "hard call" would be to just shut some plants and start anew, or hire another company to do the work.Indian Pharmaceutical Alliance secretary general Dilip Shah
In fact Dilip Shah, secretary general of the Indian Pharmaceutical Alliance, which represents domestic drugmakers, has called for a "quality culture" of hires.
For Sun Pharmaceutical Industries a form of triage is already in place with troubled plants it inherited from Ranbaxy Laboratories with at least one of four not expected back online. But the question for many is whether remedial work will get companies on track or if a root-and-branch effort is needed.
"One could see a company like Sun, or another big name, hand over manufacturing to a professional firm, a contract manufacturing company, and become a demanding client seeking quality at a low cost, a role they might like," the industry veteran, who declined to be named, said.
"Marketing and deal making might take precedence and manufacturing gets outsourced. That might also fit with M&A plans abroad for Indian companies."
Apart from the high-profile problems with manufacturing, India does have plans in the works to overhaul its intellectual property rights regime.
An October case that saw India's Supreme Court rule in favor of Merck ($MRK) against Glenmark Pharmaceuticals for selling a generic version of Januvia has been cited as a hopeful sign on the IPR front for multinationals.
Still, cases like the 2012 India Supreme Court ruling against a Novartis ($NVS) to hold onto its patent for its cancer drug Glivec/Gleevec show that the country's Section 3(d) of the Indian Patent Act (1970) can swing the other way, and frequently does.India's commerce and industry minister Nirmala Sitharaman
However, in response to trade talks over the issue, India's commerce and industry minister Nirmala Sitharaman said at the end of 2015 that a new IPR policy is in the works.
The details remain unknown, but one avenue that may open up is a form of arbitration for some IPR disputes. That could involve new ways to look at how IP is handled for newer innovative drugs and products, which the pending Trans-Pacific Partnership has set a higher bar on.
India relies on agreements such as the Trade-Related Aspects of Intellectual Property Rights (TRIPs) under the World Trade Organization as a basis for its right outside of its patent law to issue compulsory licenses. But it may want to show flexibility to get wider market access for its products and garner investment at home.
Analysts say some disputes over access and cost could be handled like Gilead's ($GILD) decision to license its hepatitis C therapies to about a dozen Indian drugmakers that manufacture them at home and sell them domestically and to specified emerging markets at lower costs.