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Even as the Indian pharma sector catering to the US market may see further increased scrutiny from the US drug regulator during the year, the sector is expected to maintain its growth trajectory, according to CareEdge Ratings.
Despite more US Food and Drug Administration (FDA)-approved facilities and increased inspections, Official Action Indicated (OAI) observations stayed around 7%, down from 15-20% between calendar year (CY) 2013 and CY17. This highlights improved compliance with cGMP by Indian pharma companies standards, said the company in its latest report on US FDA Inspections in India. The report said that Indian pharma is at the crossroads of opportunity and responsibility, amidst the increasing inspections.
Post the pandemic-induced dip in inspections, there has been an increasing trend in US FDA inspections of Indian pharmaceutical manufacturing facilities. In calendar year 2024 (CY24), the US FDA conducted over 256 inspections of Indian pharmaceutical manufacturing sites, expecting further growth in inspection frequency in CY25.
"Looking ahead, CareEdge Ratings expects the Indian pharmaceutical sector to maintain its growth trajectory, underpinned by consistent investments in research and development, regulatory compliance, and quality enhancement," said the report.
"The sector is well-positioned to effectively manage and navigate any potential escalation in regulatory scrutiny by the US FDA, reinforcing India’s role as a vital supplier of quality drugs in the global pharmaceutical supply chain," it added.
India has the second-highest US FDA-approved pharmaceutical manufacturing facilities worldwide, second only to the US. With the US being the largest pharmaceutical market in the world and India being one of the largest exporters of generic drugs, approximately 35% of India’s pharmaceutical exports were to the US market in FY25.
As per the US FDA, Generic Drug User Fee Amendments II, out of the 2013 facilities approved to produce a finished dosage form (FDF) of human generic drug or an active pharmaceutical ingredient, 530 facilities are in US, while 499 facilities are in India, followed by 416 in Europe and 340 in China.
"This underscores India's critical role in supplying quality pharmaceutical drugs to regulated markets, particularly the US," said the report.
Over 90% of India's US FDA-approved plants are involved in the production of API and FDF, accounting for 56% and 35% of the total plants, respectively. The contract manufacturing organisations (CMOs) constitute 5%, while 3% of plants handle API and FDF, reflecting India’s diverse and robust pharmaceutical manufacturing capabilities.
In 2018 (pre-Covid), the US FDA conducted 1,116 inspections globally (excluding the USA), with 259 in India. However, due to pandemic-induced restrictions, inspections dropped to just 192 globally and a mere 9 in India in 2021. With the easing of global travel restrictions and renewed regulatory focus, 2024 has seen a marked rebound.
The US drug regulator has carried out 854 inspections globally (excluding the USA), with 256 inspections in India, almost matching the pre-Covid-19 numbers for India.
“The resurgence of US FDA inspections to pre-pandemic levels and the concurrent decline in major adverse regulatory actions against Indian pharmaceutical facilities underscore the growing regulatory maturity of the Indian pharmaceutical sector," says D Naveen Kumar, associate director, CareEdge Ratings.
"India’s position as a key supplier of generics to the US market has been reinforced by sustained improvements in compliance frameworks, quality control systems, and operational discipline,” he added.
“As the US FDA intensifies focus on high-value product categories—such as complex generics, injectables, and critical supply components—Indian pharma companies are well-positioned to capitalise on emerging global opportunities, provided they continue to invest in technology, talent, and regulatory engagement," says Pulkit Agarwal, director, CareEdge Ratings.
Moving forward, compliance will not merely be a regulatory requirement, but a core driver of growth and sustainability in the global pharmaceutical ecosystem, added Agarwal.
The US FDA has prioritised inspections of facilities linked to high-priority drugs and those involved in complex generics and injectables. While this intensifies the compliance pressures on Indian manufacturers to maintain stringent quality protocols, the current inspection trends align with the broader global emphasis on strengthening pharmaceutical supply chains and ensuring product safety in regulated markets. This may also aid in faster product approvals.
The frequency of OAI observations issued by the US FDA on its approved pharmaceutical facilities in India has decreased over time. The OAI observations have gone up from eight per cent in 2018 to almost 44% in 2021, but came down to seven per cent in 2024.
This indicates improving compliance standards of Indian pharmaceutical manufacturing facilities, which has aided in the accelerated pace of product filing and approvals, said the report.
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