It's a tough road ahead for pharma companies

Post Ranbaxy episode, domestic pharma companies may face frequent inspections and deeper scrutiny. These companies need to ensure that not only their own quality and standards improve but also their vendors’ and service providers’.

The following two quotes from the United States Food and Drug Administration (FDA) news releases may help put the Ranbaxy controversy in perspective.

The first sums up what it is that drives the FDA and the second is typical of the challenge the pharmaceutical industry faces.

(1) “The consent decree shows that FDA is serious about enforcing the manufacturing standards essential for safe and effective prescription drugs,” said John Taylor, Associate Commissioner for Regulatory Affairs at the FDA.

“It should also reassure the American people that we are doing everything we can to preserve the integrity of the American drug supply.”

(2) “FDA’s last inspection found Paxil CR tablets, approved to treat depression and panic disorder, could split apart. This deficiency could cause patients to receive a portion of the tablets that lacks any active ingredients, or alternatively a portion that contains an active ingredient and does not have the intended controlled-release effect. Additionally, FDA found that some Avandamet tablets, used to treat Type II diabetes, did not have an accurate dose of rosiglitazone, an active ingredient in this product."

Incidentally, both these quotes pertain to a consent decree signed by GlaxoSmithKline (GSK) in 2005.

The message is loud and clear. The USFDA has zero tolerance for manufacturing deficiencies. Compliance is a challenge for any company, whether Indian or American, generic or innovator.

The challenge is greater for an Indian company because the country for decades has lived and grown up in a regime with high levels of tolerance, whether it is drinking water, personal hygiene, food or medicine.

Hence, when an Indian company decides to operate under different and challenging standards, the entire organisation - from top to bottom - has to change its attitude to compliance.

This change demands compliance with not only technical standards but also ethical standards; it cannot be limited to one section of the organisation, for example manufacturing, but should be implemented across the organisation.

The attitudinal change requires time, patience and commitment from top management. Those companies that entered the US market early initiated these changes and are ahead of others.

Even early movers, however, have not yet been able to spread these changes across the entire organisation.

They are still in learning mode. They have done well so far; being driven by business ambitions, they will do better.

The Ranbaxy episode has underlined the loss of potential business opportunities if pharmaceutical firms do not change.

Hence, one impact of this episode will be greater focus on attitudinal changes to build quality organisations.

And building a quality organisation happens by design, not accident. It must be manifest in everything that one does - the plant layout, the equipment, the standard operating procedure, office ambience, and so on.

The improvement in the company’s standards and quality is not enough. It has to percolate through all its vendors and service providers.

This brings into the picture the “application integrity” issue.

Any company seeking USFDA permission to sell a generic drug is required to submit certain data with the application.

The data prove that the generic version is equivalent to the innovator’s product. Such data should not be compromised - a charge that Ranbaxy faces.

The generation of such data is mostly outsourced. However, the company submitting the application has to ensure its integrity.

Unless the service provider also has equally stringent standards, the integrity of data could come into question. Hence, the third impact will be on improving quality and standard of data generation and its integrity.

These are some of the major internal impacts on Indian drug manufacturers as a result of the controversy. There would also be the external impact.

The first would be doubts about reliability. Regulators, doctors and patients may wonder if they can rely on generic drugs from India.

The second would be exploitation of this doubt by the competitors to compromise, if not destroy, India’s image as a supplier of safe and quality medicines at affordable prices.

The third would be its influence on the drug regulatory agencies. They would be more circumspect in approving generic drugs from India and also subject service providers to scrutiny.

The frequency of inspections may increase. The scrutiny may be deeper. The Indian drug regulatory agency, the Central Drugs Standard Control Organisation (CDSCO), will also come under the scanner for its role.

Finally, till such time as the industry’s image is restored, there could be some setback to exports on two counts: delays in approvals/registrations and switch to alternate sources.

Domestic pharmaceutical companies are capable of facing both the internal and external impacts.

The internal impact is within their control and would be the sole responsibility of their promoters and CEOs. They could decide the pace of change.

Some bigger companies have already progressed on this path and changed their organisation cultures. Many others have to initiate this change.

When it comes to external impact, however, the industry alone cannot resolve it. All stakeholders, including the USFDA and other foreign regulatory agencies, will have to work together to restore faith in affordable generic medicines from India.

The media, too, has a role to play. It must be mature enough to move away from alarmist reporting and accept that a zero tolerance policy will invariably result in recalls and import alerts.

This has happened to many companies from developed countries. The numbers of import alerts by country as reported by the USFDA are: China 75, Canada 63, Mexico 63, Hong Kong 48, Thailand 47, India 46, UK 42, Japan 40, Germany 35, and South Korea 35.

So it is incorrect to think that India is being targeted. The USFDA has as much interest in accessing affordable generic drugs as in ensuring the safety, efficacy and quality of medicines.

India’s health ministry in particular has to focus on restoring the CDSCO’s image, since manufacturers are often judged by the quality of the country’s drug regulator.

India has neglected building a robust CDSCO. Several expert committees’ recommendations since 1999 have remained in cold storage.

A Bill for the creation of a Central Drugs Authority has been languishing in Parliament for several years. We need someone to pilot this Bill, quickly.

The author is Secretary General of the Indian Pharmaceutical Alliance, which comprises 18 leading Indian companies engaged in R&D