India's pharma industry is likely to see a sharp increase in the number of surprise inspections by the US Food and Drug Administration (FDA) after President Donald Trump signed an executive order seeking closer scrutiny of overseas plants by the US drug regulator.
Marty Makary, commissioner, US Food and Drug Administration (FDA), said as much on Monday. Trump is directing the FDA to improve enforcement of active pharmaceutical ingredient source reporting by foreign drug producers and consider publicly displaying a list of facilities that do not comply.
Trump has pushed for faster regulatory approval timelines for new manufacturing plants based within the US as part of his efforts to boost fresh investments. Leading drugmakers like Eli Lilly and Roche have committed billions of dollars for investments in new facilities in the US. Makary's statement sent shivers across India's pharma industry and stocks of major companies such as Sun Pharma, Lupin and Dr Reddy's were marginally down on the NSE.
However, sector experts remained unfazed and said the move, though concerning, saying higher unannounced audits won't be an issue as most companies are already geared to be compliant on manufacturing practices round the year. The notice for surprise audits ranges from 72 hours prior notice or even less than one hour before the officials commence inspections.
"This is a carefully drafted order which can potentially have adverse implications on the pharma industry as President Trump tries to impose indirect barriers for India. The industry needs to be physically and mentally prepared and think ahead of time," said Dinesh Dua, former chairman, Pharmaceuticals Export Promotion Council of India (Pharmexcil). Decoding the math behind the order, Dua said that things will be clearer in the next few days.
"Majority of intermediates, even for exports from India to the US, come from China. The companies will have to clearly display the source of material they are using and from where it is sourced. If even one component is not approved by the US FDA, there could be a problem. Trump may turn around and say that tariffs will be imposed on the components which are imported from China."
Another assumption, Dua said, is that practically 70-80% companies in India have two plants at the same premises, a US FDA approved plant and a domestic plant. "They (US) might come down on these companies on an assumption that the API may get mixed thereby creating further issues," Dua explained.
Dua said the US is already facing shortages and backorders and this will add on another worry. "If India slows down dispatches it will be a crisis situation for the US as they don't have the capacity. This may lead to drug shortages and hit the common Americans," Dua said.
Harish K Jain, president of the Federation of Pharma Entrepreneurs, suggested that it was time Indian pharma diversified its business portfolio rather than depending on one major buyer.
"It is also important that Indian pharma invests in innovation and research and be one step ahead. Compete on quality rather than price. Indian pharma also should not shy away from investing in manufacturing plants abroad including the US," Jain said.
( Originally published on May 06, 2025 )
Marty Makary, commissioner, US Food and Drug Administration (FDA), said as much on Monday. Trump is directing the FDA to improve enforcement of active pharmaceutical ingredient source reporting by foreign drug producers and consider publicly displaying a list of facilities that do not comply.
Trump has pushed for faster regulatory approval timelines for new manufacturing plants based within the US as part of his efforts to boost fresh investments. Leading drugmakers like Eli Lilly and Roche have committed billions of dollars for investments in new facilities in the US. Makary's statement sent shivers across India's pharma industry and stocks of major companies such as Sun Pharma, Lupin and Dr Reddy's were marginally down on the NSE.
However, sector experts remained unfazed and said the move, though concerning, saying higher unannounced audits won't be an issue as most companies are already geared to be compliant on manufacturing practices round the year. The notice for surprise audits ranges from 72 hours prior notice or even less than one hour before the officials commence inspections.
"This is a carefully drafted order which can potentially have adverse implications on the pharma industry as President Trump tries to impose indirect barriers for India. The industry needs to be physically and mentally prepared and think ahead of time," said Dinesh Dua, former chairman, Pharmaceuticals Export Promotion Council of India (Pharmexcil). Decoding the math behind the order, Dua said that things will be clearer in the next few days.
"Majority of intermediates, even for exports from India to the US, come from China. The companies will have to clearly display the source of material they are using and from where it is sourced. If even one component is not approved by the US FDA, there could be a problem. Trump may turn around and say that tariffs will be imposed on the components which are imported from China."
Another assumption, Dua said, is that practically 70-80% companies in India have two plants at the same premises, a US FDA approved plant and a domestic plant. "They (US) might come down on these companies on an assumption that the API may get mixed thereby creating further issues," Dua explained.
Dua said the US is already facing shortages and backorders and this will add on another worry. "If India slows down dispatches it will be a crisis situation for the US as they don't have the capacity. This may lead to drug shortages and hit the common Americans," Dua said.
Harish K Jain, president of the Federation of Pharma Entrepreneurs, suggested that it was time Indian pharma diversified its business portfolio rather than depending on one major buyer.
"It is also important that Indian pharma invests in innovation and research and be one step ahead. Compete on quality rather than price. Indian pharma also should not shy away from investing in manufacturing plants abroad including the US," Jain said.
( Originally published on May 06, 2025 )
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