New Delhi/Washington: Indian pharmaceutical firms are unfazed by the prospect of increased scrutiny by US regulator Food and Drug Administration (FDA), which faces charges of slipping up on inspection of non-US drug makers.

In fact, say some drug industry experts, Indian drug makers may actually benefit from more intensive interaction with the FDA—even if it meant more inspections—as it could help reduce delays in approvals for introducing drugs and importing chemicals into the US, the biggest market for such products.

A recent US government audit has pointed out that in a year, the FDA inspected merely 7% of the drug makers outside the US that export drugs to that country and that it will take up to 13 years, at this rate, to inspect all such drug makers in the world.

Dr Reddy’s facility in Hyderabad. The company says increased inspections will enhance its reputation as a quality supplier

“It might mean more paperwork and costs for us, but good manufacturers needn’t worry," said Swati Piramal, director of communications and strategic alliances at Nicholas Piramal India Ltd. She added that US concerns could be arising on account of certain Chinese pharmaceutical products showing up banned chemicals.

A spokesperson from Dr Reddy’s Laboratories Ltdsaid they welcome any increase in inspections as it will “only serve to enhance our reputation and standing as a quality supplier".

The US imported $48.3 billion, or nearly Rs1.9 trillion, in pharmaceutical products this year through August, up from $42.3 billion a year earlier, according to the commerce department.

Indian drug companies currently account for half of all approvals for so-called active pharmaceutical ingredients, or APIs, which is the raw material used to make medicines, a quarter of formulation drug approvals, and have the largest number of FDA-approved manufacturing sites.

D. G. Shah, secretary general of industry lobby Indian Pharmaceutical Alliance, says that since Indian companies export to a slew of countries, their facilities are inspected often by several other regulators— those of the UK, Australia, the European Union, Brazil, and South Africa besides the FDA—compared with the facilities of US drug makers.

“The US FDA system is based on standard operating procedures and focuses on extensive documentation. These documents can be inspected even after years," Shah said, explaining that physical inspections, even if irregular, could be made up for by tracking paperwork.

With 906 approved API makers in China and 400 in India, the FDA is “logistically" better off if it is to set up an office in the region, according to Sanjiv Kaul, industry expert and managing director of private equity firm, ChrysCapital Investment Advisors.

“Closer working with FDA will only benefit the Indian drug companies as they will cross over from a principal-agent relationship to that of collaborators," Kaul said.

For the fiscal year to 31 March, the FDA inspected 13 of 714 firms in China and 65 of 410 Indian drug makers, according to the US government report. These two countries have the largest bunch of drug makers registered with the FDA to export drugs to US.

Shah also believes the paranoia was largely due to certain harmful products from out of China in the recent past and India could just be getting clubbed in the category.

C.R. Sukumar from Hyderabad contributed to this story. Justin Blum is with Bloomberg in Washington.