Chalta hai attitude does not work with the US FDAFeb 09, 2017(11:11)
All firms that plan to sell medicines in the US market must have approval from the US FDA (Food and Drug Administration). Plants adhering to the CGMP (Current Good Manufacturing Practices) as described by the US FDA are a pre-requisite for obtaining marketing approval of drugs manufactured at the plant/facility. The application seeking approval for generics is known as ANDA (Abbreviated New Drug Application).
To ensure safety and consistent high quality CGMP standards, FDA conducts inspections using a risk-based approach and has targets to maintain frequency of inspections at 2 years (plus or minus 20 percent) for FDF (Finished Dosage Formulations) plant and 3 years (plus or minus 20 percent) for API (Active Pharmaceutical Ingredient) plant.
Possible outcomes of FDA Inspections
No observations: If FDA investigator(s) have no observations at the end of inspection i.e. no Form 483 is issued means this is the best outcome of a plant inspection for the pharma company because it implies that the plant complies with the CGMP standards and can continue to export drugs to the US. It also implies that FDA may not withhold pending ANDA approvals for drugs the firm plans to manufacture at the facility.
Form 483 issued: At the end of an inspection, if an investigator(s) observes that CGMP standards have been violated, each observation is noted in a clear and specific way on a formal document called Form 483. Form 483 is presented and discussed with the companys senior management. The companies are encouraged to respond to the FDA Form 483 in writing with their corrective action plan (typically in 15 days) and then the suggested corrective action plan is implemented expeditiously.
Implications of Form 483: Form 483 does not necessarily mean that a final FDA determined is in violation. A written report called Establishment Inspection Report (EIR) along with all evidence or documentation collected on-site and any response made by the company is also considered. FDA considers all of this information to determine what further action, if any, will be appropriate to protect public health. (Source: fda.gov) Observations related to data integrity issues are considered serious, whereas procedural observations can be easily corrected.
Possible Scenarios after Form 483 is Issued:
Successful Resolution of Form 483: If FDA is satisfied with the corrective action plan submitted by the firm, then the FDA may issue successful closure of inspection and issue an EIR.
Warning Letter: If FDA is dissatisfied with the firms corrective action plan, FDA may issue a warning letter to the firm.
Implications of a Warning Letter: Any pending ANDAs seeking approvals for drugs manufactured at the facility may be withheld until the successful resolution of the observations and closure of inspection via issue of an EIR.
FDA may re-inspect the facility after approximately one years time before issuing successful EIR. The impact on the stock price is that all the sales from future drugs (approvals expected in about 1-2 years time) that were priced-in would be removed and the stock price may fall significantly. Note that it typically takes at least 1 year to successfully resolve a warning letter and obtain an EIR.
Import Alert: It is typically issued when the FDA finds that the drugs produced at the plant have safety concerns or FDA finds substantiation determining that drugs may be adulterated or misbranded. In both cases, drugs from the plant will not be allowed to enter the US as a result of which all drug sales from the facility will be zero. Even the existing drugs inside the US at the time of issuance of the import order may be recalled by the manufacturer to minimize possible legal exposure. Stock prices fall sharply depending upon the contribution of sales from the facility.
Implications of an Import Alert: It may take at least three years for a company to have its import alert lifted. Firms typically hire foreign consultants (Lachman Consultant, a US-based consultant is well known) to advise them on resolution and corrective actions. FDA generally re-inspects facility after submission of corrective action plans; resolution in import alert cases is a long-drawn process. Two of erstwhile firm Ranbaxys plants (now part of Sun Pharma) are still under import alert since Sep 2009 (Source: fda.gov).
Its not that the US FDA has been harsh on Indian pharma companies in the last few years by issuing Form 483s or warning letters or import alerts but that the FDA has significantly increased its workforce that has enabled FDA to conduct frequent foreign inspections almost at parity with domestic inspections.
Thanks to the GDUFA Act (Generic Drug User Fee Amendments of 2012) which has increased filing fees for generic drug applications, for allowing FDA to hire more employees who in turn would work on these applications leading to faster approvals. This is evident in the recent flurry of approvals received by Indian firms, thus, reducing backlogs and increasing sales. Also, the goal time to review applications has been set at 10 months for 90% of applications submitted on or after Oct 1, 2016 (Source: fda.gov), compared to uncertain time goal before GDUFA was enacted in 2012. This has done more good than harm to generic pharma firms worldwide.
FDA has set the tone and has been sending the message that it will not compromise with drug quality. The chalta hai attitude does not work with the US FDA.