Why USFDA has Indian generic drug cos worried

What is the News?

The US Food and Drug Administration(USFDA) has decided to restart an old pilot project of conducting surprise inspections of foreign manufacturing plants. This could be a litmus test for Indian generic drug makers.

What is the surprise inspection  project announced by USFDA?

The USFDA will conduct unannounced inspections of manufacturing plants in India and China in an attempt to uphold the quality standards of drugs that are supplied to the US market. 

Under the current practice, the USFDA gives advance notice to foreign manufacturers before it begins its regulatory inspections.

How will this impact Indian generic firms?

In 2014, a similar ‘surprise’ inspection pilot was started by the US FDA. 

This move led to a 60% increase in regulatory action against generic companies. Between 2014 and 2015, India’s top five generic companies collectively lost a market cap of ₹15 billion.

Why has the US announced this surprise inspection  project again?

Around 40% of the finished drugs sold in the US are made outside the country. The demand to safeguard the drug supply chain and bring manufacturing closer to the US has grown over the last few years.

What can Indian drugmakers do?

Large drugmakers have already started diversifying their business beyond the US market. This would continue.

There is also a possibility of firms asking the Indian government to intervene and initiate dialogue with the US administration.

Source: This post is based on the article “Why USFDA has Indian generic drug cos worried” published in Livemint on 8th Feb 2022.