5 important things about USFDA warning letters, slow resolution

Drug maker Wockhardt last Wednesday announced after closing hours of the market that it has received a warning letter from US regulator for its Morton Grove facility in Illinois, US. The next day the stock plunged by as much as 7 percent. Wockhardt said it has initiated appropriate measures since last several months to address the issues raised by USFDA with the help of consultants. It’s the second warning letter Wockhardt received from USFDA this year. It’s not just Wockhardt alone – other Indian drug makers including Sun Pharma, Dr Reddy’s, Cadila Healthcare and Ipca have all been issued warning letters over the last two years.Here is the list of five things to know about warning letters.What is a warning letter, why do drug firms get them?USFDA issues a warning letter to firms that have significantly violated FDA regulations. In the case of Indian companies, the warning letters are typically related to non-compliance of good manufacturing practices. The warning letter also makes it clear that the firm must correct the problem. It provides directions and a time-frame for the company to inform the US regulator of its plans for correction. USFDA then checks to ensure that the company’s corrections are adequate. If the company fails to adequately address the problems flagged by USFDA, it may trigger an import alert or ban on the facilities.What kind of impact does warning letters have on companies?A warning letter means that the facility that received it will not get new product approvals until it fixes the problems. However, a warning letter doesn’t restrict a company from selling the products from its existing portfolio approved by USFDA. New generic approvals are critical to sustain momentum for drug makers as the existing portfolio gets commoditised. How many warning letters did Indian companies get and why is the spike? According to Edelweiss Research, since Generic Drug User Fee Amendments (GDUFA) implementation (Oct 2012), FDA inspections have doubled in India and China (20 percent versus 11 percent of total USFDA inspections earlier), which led to considerable increase in issuance of warning letters (55 percent versus 33 percent of total earlier). Out of 217 warning letters issued after GDUFA implementation in October 2012 onwards, a third of warning letters were issued to Indian plants, while between January 2009 and September 2012, of the total 242 warning letters India’s share was only 14.5 percent.What is the link between GDUFA and warning letters?Analysts point out the spike in warning letters is linked to the Generic Drug User Fee Amendments (GDUFA) of 2012 -- a law aimed at fast-tracking approval process by charging fees for applying manufacturers. The GDUFA’s other main intention was to subject overseas generic drug manufacturers to the same level of quality standards expected from US manufacturers. Prior to GDUFA, USFDA was required to inspect US-based generic drug manufacturers every 2 years, but no such requirement existed for non‐US manufacturers due to insufficient resources and work-overload at USFDA. The GDUFA revenues helped USFDA to address its resource crunch.Around four-fifths of active ingredients used in generic medicines and more than half of the finished products are manufactured overseas. What’s worrying about warning letters?Resolution. Warning letter resolutions are taking more time than ever before. Only 9 out of 108 warning letters have been sorted taking an average of 500 days. Data for India and China is even bleaker with just one resolution out of the 64 WLs issued in past 52 months, Edelweiss report said. “Cadila Healthcare’s Moraiya unit (474 days) looks poised to be resolved soon post its recent re-audit that had no FDA observations. While data suggests that Sun Pharma’s Halol unit (454 days) and Dr Reddy’s (349 days) are closer to resolution timeframe, the concern is that the WLs are not easy to resolve,” the report added.