India and the USA need to collaborate

This week saw a high profile visit from the US Food and Drug Administration to its Indian regulatory counterparts. FDA Commissioner Margaret Hamburg met with officials at India’s Ministry of Health and Family Welfare to sign the first Statement of Intent between the two countries (pictured). The statement was said to have been signed “in the spirit of continued collaboration and a commitment to quality.” However, according to reports in the Economic Times, collaboration hasn’t been that forthcoming. Indian officials apparently raised serious concerns in the meeting over the FDA’s recent inspections of Indian companies including Ranbaxy Laboratories (BSE: 500359) and Wockhardt (BSE: WOCK), and what it calls “disproportionate penalties”. The fourth sanction recently imposed on Ranbaxy saw a total ban on manufacturing and distributing APIs for FDA-regulated products. As it generates 43% of its income from North America, this was a huge blow for the company last month. It has been asked by the FDA to remedy the issues raised and also must hire a third-party expert to inspect the facility in question on behalf of the FDA.

Compromise solution turned down

During this week’s meetings, the Economic Times reported that Ranbaxy pleaded with the FDA to lift the ban while they take remedial measures. The drugmaker argued that if it is allowed to continue its exports, this will give it the revenue needed to take the expensive corrective steps. The newspaper reports that at a private meeting between pharma executives and Commissioner Hamburg, Ranbaxy managing director Arun Sawhney asked her to create a policy to allow them to continue doing business in the USA which is so vital to their finances. In a Catch 22 situation, the company would reap more money for the essential measures to meet the FDA’s criteria if it allowed it to continue to operate. Apparently this request was met by a polite but firm ‘no’ from Commissioner Hamburg, who has said that her priority is “ensuring that the products distributed in the USA meet our requirements for product safety and quality.”