Dr. Reddy's blasted in warning letter for hiding existence of testing lab from FDA

An FDA warning letter to Dr. Reddy's Laboratories ($RDY) shows that inspectors found many of the data manipulation issues and contamination concerns that have landed many of India's top drugmakers in trouble. But most troubling to the agency was the discovery that for years Dr. Reddy's was testing drug batches in a laboratory that the FDA was never told existed and often shipped to the U.S. products that had repeatedly failed tests for impurities.

When Dr. Reddy's acknowledged this month that it had received the warning letter for three of its Indian plants, it proclaimed it was "actively engaged" with the FDA to resolve the issues. But according to the letter posted on Tuesday to the FDA website, even after the company responded 9 times to the host of observations, the regulator is not yet satisfied. Dr. Reddy's responded last December and in January and March, right after the inspections at each plant, as well as in January, April, twice in May, July, and September, but still did not get at everything the agency was looking for.

Top of mind for the FDA was the quality-control lab the Dr. Reddy's plant in Srikakulam had used through 2012 for APIs the company had been shipping to the U.S. It was not until the day before the inspection was complete that an employee let slip the existence of the "uncontrolled Custom QC laboratory," the FDA said. What it discovered inside were records that showed the company had been repeatedly testing APIs for impurities, never recording failed tests, and only including those that showed the batches had passed.

Inspectors also found plenty of recent examples at that plant and an API plant in Miryalaguda that supervisors were not keeping control over equipment and records to prevent them from being changed or destroyed and that workers had been doing exactly that. One analyst blamed record changes and deletions on an "unknown individual" said to have used the worker's credentials to log on to computers.

At Dr. Reddy's Oncology Formulation manufacturing facility at Duvvada, inspectors raised a number of issues about the potential for contamination in the way that employees handled vials. It also found that there were no standards to ensure drugs met specs for strength, quality, and purity and that employees were often not trained in how to determine which vials should be kept and which rejected.

Dr. Reddy's now finds itself in essentially the same place as Sun Pharmaceutical and Ranbaxy Laboratories, which Sun now owns, as well as Wockhardt and others. All have had warning letters or plant bans that have taken their attention and beaten down their sales and earnings.

- here is the warning letter

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