Cadila is latest Indian drugmaker to feel sting of an FDA warning letter

Cadila's Moraiya dosage plant--Courtesy of Cadila Healthcare

The FDA is continuing its efforts to raise the standards of India's pharma industry, closing out the year with a warning to Cadila Healthcare, the company acknowledged in a report to the Bombay Stock Exchange. The citation follows warnings last year for a host of Indian drugmakers including Sun Pharmaceutical, Dr. Reddy's Laboratories ($RDY) and Mylan's ($MYL) sterile injectable operations in India.

Cadila reported that it received a Warning Letter for its Moraiya formulation facility as well as its Zyfine API plant in Ahmedabad. Cadila didn't say what issues the FDA raised with the company but more than 18 months ago, the drugmaker acknowledged receiving a Form 483 for its Moraiya plant after a "product specific" inspection. Cadila said that no products in the U.S. were made with APIs from the Zyfine facility.

Cadila in its filing insisted it takes quality seriously and will do what is necessary to meet FDA expectations. "We are committed to resolve all the issues and revamp our quality systems and processes as the top most priority," it said in its filing.

Depending on how its efforts to fix the problems affect production, the action could pose some financial challenges to the Indian company. Citing analysts, The Telegraph reports that the Moraiya plant chips in nearly 60% of the company's U.S. revenue, which hit about $151 million in its second quarter.

Other Indian drugmakers have had their finances whacked hard by the FDA actions. The ongoing regulatory concerns at Ranbaxy Laboratories led its largest shareholder to sell out to Sun last year. Then the FDA took action again at one of Sun's primary plants, steps that have significantly undercut its U.S. revenues even as the company is investing in fixing the Ranbaxy problems. Mylan reported in its last quarterly filing that it has already collected $80 million from Strides to cover supply disruptions that arose from the FDA actions. However, last month, it took steps to recover from Strides more of its costs to deal with the issues.

For years now, the FDA has both cajoled and berated Indian drugmakers about raising their plant standards. Some Indian industry and government leaders have complained that the FDA keeps changing the standards and have suggested the regulator has singled the country out. But the FDA points out that India accounts for about 40% of the generic and over-the-counter drugs sold in the U.S., and so it must make sure those products meet U.S. standards.

- here's the BSE filing
- and The Telegraph's story

Read more on