Published on : Dec 21, 2015
While the global pharmaceuticals industry is showing signs of advancing, the same cannot be said for the Indian pharma industry. Industry experts are saying that the market has been in a major overhaul process after the previous pharma leader, Ranbaxy Laboratories, was made to pay US$500 mn in damages after it was proven that the company provided falsified data to mislead regulators. Since then, the international eye on the Indian pharma industry has grown stronger. In the midst of the tightening regulatory grip, many companies are finding it difficult to adapt to the new, stricter rules.
After the Ranbaxy suit, the USFDA has ramped up its inspection of foreign manufacturing locations quite significantly. This has led to a chain of import bans and warnings issued to manufacturers all over India, after they showed consistent problems ranging from repair issues, hygiene issues, and data compromise.
India currently supplies more than 40% of the generic and OTC drugs consumed in the U.S.
The latest Indian company to fall in the market due to a USFDA warning is Sun Pharma. Share prices of the international pharma giant slipped nearly 7% on Monday, after the regulatory authorities from the USFDA had issued multiple warnings regarding the violation of standards in key manufacturing plants, further deepening the woes of the Indian drug industry.
A large number of investors and analysts have unanimously stated that the warnings display how most of the top companies in the Indian drug industry are struggling to stay on top of the regulatory norms laid out nearly two years ago. Sun Pharma had stated earlier that it was working on improving standards after warnings issued over the manufacturing conditions at its key facility at Halol. The warning was issued in September 2014.
Analysts at Morgan Stanley have published a note on Monday, which said that the firm has lowered its estimated for 2018 and 2017 earning for individual shares. They cited the slower growth in the U.S. due to the knockdown of Sun Pharma supply. The delays have been happening due to the delays in obtaining approvals by Sun Pharma from the USFDA.