U.S. regulators who visited a Sun Pharmaceutical
Industries Ltd. (SUNP) drug plant in India before the facility was banned last
month from exporting to the U.S. saw testing flaws, a garbage pileup, and a
laboratory they called “un-cleanable.”
The Food and Drug Administration inspectors
observed that some workers misrepresented test data and deleted undesirable
results, according to an inspection report known as Form 483 that obtained via
a Freedom of Information Act request. There were rodent traps and a strong
smell of urine in a quality-control lab area and bathrooms were in “total
disrepair,” with what appeared to be human waste on a wall, the report said.
On March 12, the agency barred the antibiotics
plant in the western Indian village of Karkhadi from
exporting to the U.S., the factory’s primary market. The findings of the
November inspection haven’t previously been reported, and the FDA didn’t
disclose specific reasons when announcing the ban.
“We have sent our response to the FDA and given
that the facility now has an import alert, it’s clear that the FDA does not
agree with our view,” Sun, India’s largest drugmaker
by market value, said in an e-mailed response to questions from Bloomberg News.
“In this process, we have learnt and have resolved to work on further
strengthening our systems and controls.”
Sun this month agreed to buy Ranbaxy Laboratories
Ltd. (RBXY), which has four factories banned by the FDA. Last year, Ranbaxy
agreed to pay $500 million to settle a whistleblower
lawsuit and federal criminal charges that the company sold adulterated drugs
while lying about it to the regulator.
Indian drugmakers have
become major sellers to the U.S. as demand for cheaper generics rises. The
industry is also an essential provider of affordable medicines at home and in
other parts of the developing world such as Africa.
Drug factories in India are coming under greater
scrutiny after the FDA imposed restrictions on several suppliers of generic
medicines to the U.S. for failing to meet manufacturing standards. Sun hasn’t
faced FDA curbs in the past five years even as the regulator barred some
factories from Indian rivals including Ranbaxy and Wockhardt
Ltd. over the last year.
Founded by Indian billionaire Dilip
Shanghvi in 1983 with five psychiatry products and a
single manufacturing facility, Sun has grown into a company with net sales of
112.4 billion rupees ($1.8 billion) in the year ended March 2013, with production
sites in other parts of India and several countries including the U.S., Bangladesh,
Hungary and Israel.
While Sun’s banned facility contributed less than 1
percent of revenue in 2013, the stock could be
affected if “operational risks become repetitive,” Balaji
Prasad, an analyst at Barclays Plc in Mumbai, wrote
in a March 13 note to clients. The facility has a negligible contribution to
Sun’s revenue, the company said when the FDA issued
the import ban.
According to the FDA’s November report, the
inspectors reviewed Sun’s recordkeeping and the integrity of its data at the
plant, which makes cephalosporin antibiotics as well as bulk ingredients for
the medication.
The inspectors observed that “analysts regularly
delete undesirable chromatographic results, and products are retested without
initiating an investigation.” Manufacturing waste, old equipment and other
garbage was seen in the facility’s “perimeter manufacturing areas” making them
susceptible to pests, the report said.
Sun has implemented corrective measures on
cleanliness at the plant, and where testing procedures weren’t properly followed, it has taken the “necessary disciplinary action”
and replaced equipment. The drugmaker said some of
the FDA’s observations were related to the surrounding areas of the buildings,
and it hasn’t made a final decision on whether to shut the facility.
In 2009, the FDA ordered manufacturing to be halted
at Sun’s Detroit-based unit after a string of recalls over manufacturing
defects. Three years later, the FDA cleared the subsidiary to resume operations
with two products, according to a company statement at the time. Sun Pharma didn’t immediately respond to an e-mail requesting
an update on that unit.
The FDA last year banned about 20 plants in India
from exporting drugs to the U.S. and warned several others.
The latest ban on Ranbaxy occurred in January, when
the FDA barred one of its plants from exporting to the U.S. after finding
workers there overwrote raw data collected on samples over five months until
they got acceptable results.