Both CARE Research and ICRA (India) credit agencies report that more stringent enforcement of GMPs by the FDA represents a significant risk to the revenue growth of Indian pharma companies -- if they do not raise their game.
Companies like Ranbaxy and Aurobindo have had quality and compliance issues that are stunting their current revenue growth. Closing of manufacturing units, delisting products and other woes have stricken these companies.
Indian companies are taking notice and responding by investing more in quality. This may be a short term increase in their costs and decrease in profits, but in the long run will make it easier for them to compete in more regulated Western markets.
The increase in FDA scrutiny is of course also happening in the US and elsewhere, and the India response of more investment in quality is just what the agency wants to see. Companies that invest in quality will only become more competitive in the future.
Posted by Bruce Lehr Jun 25th 2012.