Increased USFDA vigilance in China may benefit Indian cos
December 16, 2014: As the American drug regulator is increasing its efforts to step up vigilance on Chinese companies, it is reported that it may open a significant business opportunity for the Indian pharmaceutical industry.
It is important to note here that the US Food and Drug Administration (USFDA) has decided to increase its workforce by more than threefold to 26 from the current eight and the number of drug inspectors to 11 from just one at present in China.
It is a well-known fact that India and US are two largest buyers of Chinese pharmaceutical raw materials, accounting for close to US$ 6 billion annually. According to a latest report from Edelweiss Securities, stricter USFDA action and rise in foreign inspections during 2008-14 have worsened drug shortages in the US. Based on China's DMF filings, a tougher FDA could potentially aggravate shortages in antibiotics, chemo and cardiovascular drugs. It has been reported that several Indian drug companies are looking at ramping up their manufacturing facilities to capitalise on the opportunity. In addition, these companies are urging the government to expedite the bulk drugs policy through trade bodies.
It may be noted that India produces and exports a large portfolio of bulk drugs to the North American market covering nearly 80 per cent of the product portfolio covered by Chinese companies. As compared to China's 1216 DMFs, India has close to 3,601 DMFs registered in the US market. However, India depends on China for a few intermediaries and bulk drugs that need fermentation technologies.
Companies like Lupin, Aurobindo et al that have large bulk drugs manufacturing capabilities are expected to benefit from the increased inspections in China. However, as India is dependent on China for some of the intermediaries and bulk drugs, the rising inspections in China may create a supply vacuum for some of the Indian companies.