The conundrum of USFDA inspections

Most of the large Indian pharma companies have faced some serious issues with USFDA inspection recently. Indian pharma companies are supplying to US market from the late 90s and early 2000s. However, a series of objectionable USFDA inspection outcome is quite a recent phenomenon for about the last five to seven years. A logical question arises that what has fundamentally changed that suddenly Indian companies are facing serious issues with USFDA inspection.

An analysis of the past outcome of USFDA inspections until about 2013-14, shows most of the inspections of Indian pharma companies were classified as either no action initiated (NAI) or voluntary action initiated (VAI). NAI is when at the conclusion of the inspection, no 483 is issued whereas in VAI 483s are issued but USFDA considers that the deficiencies can be mitigated by the firm voluntarily and no adversary official action is required. Today, Indian pharma companies supply about 40 per cent by volume finished dosage pharma products of the US market. So, from the perspective of public safety, regulators in the US are giving much importance to overseas manufacturers like in India. The yardstick and regulatory requirements have also changed dramatically. Most of the Indian companies have failed to improve procedures and processes as the FDA increased the scrutiny. 

One of the questions asked is why the large companies presumably having very experienced and qualified technical people and world-class manufacturing facilities have done poorly in last few years whereas smaller companies seem to have not faced much of an issue while clearing FDA inspection? The answer lies how USFDA classifies a company in their database. The classification is done based on the risk profile specifically past inspection history and the volume and number of critical products supplied to the US market. Most of the large Indian companies are today classified as high risk.

Within FDA, the inspectors are classified into three categories based on their experience and capability – Level 1, Level 2 and Level 3. The toughest and experienced inspectors are classified as Level 3, whereas comparatively inexperienced and new inspectors are classified as Level 1. Generally, all the big companies are considered high risk because of the volume and number of products they supply to the US market. Obviously, they would always have level 3 or at least Level 2 inspectors coming for inspections. Smaller companies having limited product approval or not much of critical products generally have Level 1 inspectors. FDA always classifies aseptic product manufacturers as high risk, irrespective of the size and volume supplied by the company. 

Between 2005 and 2015 period was the golden period of domestic generic pharma companies supplying products to the US. Though Ranbaxy was the first company in establishing pharma supplies of generic products in the late 90s, over the next decade, many companies started filing products to USFDA and getting approvals. During the period, most of the companies expanded by establishing multiple manufacturing sites due to increased demand for generic products in the US markets. In the meanwhile many of the blockbuster brands were going off-patent, thereby, allowing generic equivalents to be available in the market, the US government also consciously promoted generic drugs to reduce health care cost in the country. The Association for Accessible Medicines, in their 2017 Generic Drug Access and Savings Report, stated that in 2016 alone, generic medicine generated $253 billion in savings for patients and taxpayers. In the last decade, the US healthcare system has saved $1.67 trillion due to the availability of low-cost generic products. 

As the companies expanded, there was tremendous demand for technical pharma professionals to manage the newly established manufacturing facilities. The result, most of the established companies were having 35-40 per cent attrition rate specifically at the lower-level positions. The challenge for HR departments was enormous, not only to retain talents but also to recruit in vacant positions and train employees in their respective skills and the company’s ethos. The pharma industry is knowledge-based and involving trained people in operation always help in compliance with Good Manufacturing Practices (GMP) . Because of the gap between demand and supply, the growth in terms of position and emoluments of pharmaceutical professionals had grown substantially. However, the grind and the scrutiny normally people have while climbing the ladder in an organisation, were lost and many have moved to higher positions in different companies by changing job or w