Can sort out USFDA concerns on Telangana plant: Dr Reddy's

The US drug regulator's observations on Dr Reddy's Laboratories active pharmaceutical ingredient plant at Miryalaguda in Telangana are procedural and correctable within a reasonable timeframe, company executives and external consultants have told Moneycontrol.

“The observations were minor in nature, but we still felt that we shouldn’t have got them in the first place,” a Dr Reddy's Laboratories executive said on the condition of anonymity.

“None of the observations were repetitive,” said the same executive, referring to the observations made by the US Food and Drug Administration in its previous inspection a couple of years ago, which had prompted a warning letter.

Two other external consultants who worked with the company and have knowledge of the inspections corroborated the executive's claims.

“These are minor observations, and can be addressed easily without requiring another re-inspection,” said a large consultant that is helping several Indian companies including Dr.Reddy’s on remediation.

Last week, Dr Reddy's Laboratories officials received three Form 483 observations from the USFDA for its Miryalaguda API plant. Typically, the US drug regulator conveys its concerns on manufacturing practices through Form 483.

The company initially didn’t explain the nature of these observations. Miryalaguda plant was one among the three plants for which the company received US drug regulator warning letter in November 2015.

A company spokesperson said on Tuesday that the observations raised by USFDA are addressable and the company is responding to it.

The Miryalaguda plant supplies active ingredients for the company’s captive consumption as well as for its customers.

In its November 2015 warning letter, the USFDA mentioned deviations in good manufacturing practices such as failure to adequately investigate out-of-specification results and implement appropriate corrective actions; failure to maintain all quality-related documents appropriately; failure to prevent unauthorised access or changes to data and failure to identify storage containers for intermediates in batch production records.

Companies that receive its observations must respond in writing with a corrective action plan and implement it quickly. If the company fails to meet the regulator’s expectations, a warning letter may be issued.

The letter had also mentioned concerns over manufacturing standards at an API plant at Srikakulam and an oncology formulations facility in Visakhapatnam. The three plants put together were contributing about 10-12 percent of total sales, in addition to several key generic and Drug Master Filings in US. Since receiving the warning letter, the company lost a third of its market value and never really recovered.

The company has now completed remediation work at its plants and expects USFDA to complete reinspection by the end of March.

The US contributes about half of the company's sales and has been under pressure owing to lack of new approvals and erosion of base business.