The State of Drug Manufacturing in India

Siegfried Schmitt, principal consultant at PAREXEL, discusses the state of drug manufacturing in India.
Jan 31, 2014

Q. Some recent high-profile cases of quality issues at Indian manufacturers have given reason to examine manufacturers more closely. What are some issues that should be considered?

A. Indian manufacturers of APIs and drug products have been in the news for some time now, mostly under negative headlines. This fact may lead some to believe that there is something fundamentally wrong with them. Before jumping to conclusions, however, we must look closer at the issues at hand. The move east
Continued cost pressures and increased outsourcing in recent decades resulted in many European and US companies sourcing their APIs from countries, such as India and China, which have lower labor costs. India was an obvious choice for its large pool of skilled and unskilled labor, plus an existing chemical and pharmaceutical industry. Currently, between 50-70% of APIs imported in the US and Europe are sourced from India (1). This is why European and US regulators have conducted many inspections in India, and why FDA even established permanent offices in Mumbai and New Delhi (2). This high volume of inspections has resulted in a large number of findings.

From APIs to drug products
Profit margins for drug products are significantly higher than those for APIs, and several Indian companies have decided to capture their share of this lucrative market, particularly US and EU markets. Regulatory requirements for drug products, especially sterile ones, are much more demanding than those for APIs, and this is where many Indian drug manufacturers face their most serious problems. Warning letters and import alerts have been issued to several leading Indian pharma companies, triggering much of the negative publicity previously noted (3). It is important to note that EU inspection reports are only made public if requested under Freedom of Information legislation from the National Competent Authority, which conducts the inspection.

Data integrity concerns

Although inspection findings in India reflect those cited elsewhere, what sets them apart is that often data-integrity issues are being singled out in an inspection (4). Therefore, one might conclude that data falsification is rife. Though there is no denying that data-handling irregularities have been detected, there has not always been a malicious intention behind them. In several cases, there has been a misguided belief that data should look good. However, such data manipulation or data invention still constitutes fraud, irrespective of a person’s intention.

Ultimately, Indian drug manufacturers are in the spotlight because of non-compliance issues, such as insufficient environmental monitoring or a lack of documented evidence. Many US- and EU-based companies, however, often times garner attention for the same reasons. This fact is of real concern: why does the mature pharmaceutical industry in Europe and the US still struggle to comply with applicable regulations? If anything, the expectation is that there should be a much higher level of compliance among US and EU companies compared with their Indian counterparts.

Clearly, these issues must be resolved by all Indian companies concerned, just as everywhere else. As remediation efforts are under way, we hope to soon see more positive headlines coming from that part of the world.

1. S. Bennett, Specialty Chemicals Magazine (June 2013),, accessed Nov. 6, 2013.
2. A. Lal,  “FDA In India: Going Global, Coming Home,” accessed Nov. 6, 2013.
3. FDA, Import Alerts,, accessed Nov. 6, 2013.
4. “MHRA Cites Wockhardt Plant for GMP Noncompliance,,, accessed Nov. 6, 2013.

Siegfried Schmitt