A new year brings with it new hope but all indications are that 2016 is going to be a mixed bag for the pharmaceutical industry. As a new year gift, the Ministry of Health & Family Welfare accepted, with immediate effect, the new National List of Essential Medicines (NLEM 2015) on December 23. As recommended by the Core Committee headed by Dr VM Katoch, the NLEM 2015 brings 28 more medicines under price control, while deleting some others. An analysis of the NLEM 2015 by TwoFour Insight Group, shows that in line with past comments from the Modi government on making cancer care more affordable, anti-cancer medicines make up the bulk of the additions, followed by anti-retrovirals (ARVs) to treat HIV/AIDS and medicines for hepatitis B and C. In the area of chronic diseases, few new medicines were added. But, despite the growth of diabetes in India, the anti-diabetes segment had only one new addition (glimepiride). Likewise, telmisartan was the sole addition to the cardiovascular area.
Though an initial analysis by AIOCD Pharmasofttech AWACS seems to suggest that there has been no major increase in the span of coverage on the overall Indian pharma market (IPM), individual companies might be affected. With the strong possibility that the additions to NLEM 2015 could also be added to the DPCO 2013, the new year could see a few fiery debates. This is sure to dampen the festive spirits of the pharma sector, which hoped to close the year on a rare high: crossing the Rs 1,00,000 crore mark in the November IMS Health Market report, on the basis of Moving Annual Total (MAT).
But a deeper worry is warning letters (WL) and import alerts from the US FDA. Sun Pharma, on top of IMS Health’s November charts with a market share of a little over eight per cent, received a WL dated December 17 for its Halol, Gujarat facility. More than a year after the US FDA inspected the facility in September 2014, and after four communications from the company of remedial actions taken (October 10 followed by December 12, 2014 and February 10 and May 5, 2015), the US FDA remains sceptical. The December 17 letter refers to observations of water stains and buckets to collect water from leaks during the inspection conducted from September 8-19, 2014 in the parenteral manufacturing area personnel corridor. In addition, there were 483s related to sterility issues and computer system validation methods.
Sun Pharma’s Managing Director Dilip Shanghvi vowed to “continue to cooperate with the US FDA and undertake any additional steps necessary to ensure that the US Agency is completely satisfied with our remediation of the Halol facility.” A company release spoke of ‘significant investments in automation and training to enhance its Quality Systems’ as well as ‘working with external consultants to ensure its remediation activities have been completed in an appropriate manner.’
On a conference call, the company said it would respond to the US FDA warning letter within next 15 days and also pointed out that most of its other US approved facilities inspected by US FDA over the last 15 months have not received any major observations, hinting that the company had the internal tech ops resources to sort out the issues at the Halol facility. A Motilal Oswal research reports points out that it is critical for the company to get the Halol facility back in the good books of the US FDA as it contributed seven to nine per cent of overall sales in FY15/16.
Besides Sun Pharma, other Indian pharma companies under the US FDA scanner include Dr Reddy’s, Ipca Labs, Wockhardt, and of course, Ranbaxy, which is now part of Sun Pharma. The good news is that December 24 brought the welcome breather that API manufacturer SMS Pharmaceuticals’ Andhra Pradesh unit had reportedly cleared a US FDA inspection without adverse comments. Sun Pharma too was proactive about sharing news of the WL.
The bad news is, it seems to be taking longer to close out WLs. Sun Pharma’s struggles are more visible as it is the market leader, even though the immediate impact on its bottom line is projected to be ‘limited if the situation does not worsen’, according to the Motilal Oswal report. Could it be a case of miscommunication about the extent of remedial actions already taken, as hinted by senior Sun Pharma officials? Seems a bit of a stretch, considering that there were three follow up communications over 2015.
WLs and import alerts contrast sharply with PM Modi’s Make in India campaign. Our first cover story in 2016 is a reality check on the pieces that still need to fall into place. (‘Make in India: On the right track?’ pages 20-25, Jan 1-15, 2016). Let’s hope 2016 sees a pick up in momentum.