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US will continue to buy Indian generics despite quality concerns Posted 06/06/2014

According to a recent report by India’s most respected rating agency the high number of import alerts issued by the US Food and Drug Administration (FDA) in 2013 will have no impact on the existing US exports revenue of Indian pharmaceutical manufacturers.

The special report titled ‘Impact of 2013 US FDA Actions on Indian Pharma’ was released by India Ratings and Research, part of the Fitch Group, on 7 May 2014. It highlights the fact that 2013 was a bad year for Indian pharmaceutical companies, who received the highest number of import alerts in a year so far during 2013. In fact, 21 US FDA import alerts were issued against Indian manufacturing facilities during 2013, including those of Ranbaxy Laboratories and Wockhardt, see Table 1.

Table 1: Import alerts issued to Indian pharmaceutical companies during 2013



Amsal Chem


Global Calcium


Kamud Drugs


Konduskar Laboratories


Micro Labs


Nivedita Chemicals


Promed Exports


Ranbaxy Laboratories


RPG Life Sciences


Smruthi Organics


Unique Chemicals


Vignesh Life Science






The 21 import alerts in 2013 compare to only seven in 2011, nine in 2012. However, for 2014 the total looks to be going even higher, with Indian pharmaceutical companies having received 32 US FDA import alerts up to March 2014.

Despite the import alerts during 2013, the agency still believes that the Indian pharmaceutical industry has the potential to grow at a 20% CAGR over the next five years, primarily based on US exports growth. It is also expected that Indian pharmaceuticals manufacturers will face increased FDA inspections due to the increasing number of manufacturing facilities registered with FDA.

India has the highest number of FDA approved facilities outside the US and Indian manufacturers have been registering increasing number of products every year. Indian companies supplied 40% by volume of US generics imports and accounted for 39% of the total generics approvals during 2013. However, the continuance of good manufacturing practices and high quality standards including implementing strict compliance and record keeping regimes need to be put in place urgently in order to maintain these levels.

The reasons that the import alerts have not had a big impact on the Indian generics industry so far is stated as being due to the fact that most of the manufacturing sites which came under the FDA import alert in 2013 and in the first quarter of 2014 were small API manufacturers. For example, Sun Pharma’s Gujarat-based API unit that came under FDA import alert in March 2014 accounts for below 1% of the company’s revenue [1].

Closer scrutiny of the warning letters issued since 2013 reveals that most Indian manufacturers struggle with maintaining proper records and thereby an audit trail – an issue that most Indian companies should not find too difficult to resolve.

The conclusion is therefore made that, given its focus on reducing the cost of health care and increasing the use of cost-effective generics, the US will not discourage Indian generics, given that India is its largest source of generics.

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1. GaBI Online - Generics and Biosimilars Initiative. Sun Pharma’s Gujarat site under FDA import alert [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2014 Jun 6]. Available from: www.gabionline.net/Generics/News/Sun-Pharma-s-Gujarat-site-under-FDA-import-alert

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Source: India Ratings

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