Home >companies >news >Dr Reddy’s shares slump 8%; firm to reply to FDA warning by 7 December

Hyderabad: Drug maker Dr Reddy’s Laboratories has bought time until 7 December from the US Food and Drug Administration (FDA) to tell the regulator how it plans to address a string of alleged manufacturing violations at its plants in India.

The FDA issued a warning letter to Dr Reddy’s on 5 November alleging violations of good practice, including testing at undisclosed labs, manipulation of data, questionable staff qualifications and manual interference in drug making at three plants in Andhra Pradesh and Telangana.

“The company is in the process of preparing a response to FDA’s warning letter. The FDA has granted an extension until 7 December 2015 for the submission of the response to its warning letter," Dr Reddy’s said in a statement on Thursday.

FDA typically gives firms 15 working days to submit a reply, but Dr Reddy’s wanted more time.

The US drug regulator, in its letter, warned it may withhold the approvals of new applications or supplements, citing a host of violations of good manufacturing practice.

The FDA has, in the past few years, stepped up scrutiny of manufacturing sites across the globe. A host of Indian drug makers have been held responsible for failing to follow US manufacturing norms, raising questions about their credit-worthiness and the quality of drugs they export.

“FDA has so far not issued an import alert, so the company can continue to supply drugs," said an analyst who did not want to be named. “In case it gets an alert, it may send it to other geographies. But it may take anywhere between 12-18 months for the firm to address these issues. But the company may not get any fresh approvals (to market a drug in the US) until it addresses the issues."

The management of Dr Reddy’s had earlier indicated 10-12% of its revenue comes from these three plants, without disclosing the details of the drugs produced there.

The warning letter requires Dr Reddy’s to respond in writing, specifying the steps it plans to take to correct and prevent the alleged deviations and violations, along with supporting documents. FDA has also asked the company to conduct a third-party assessment of the extent of inaccuracies in its data; the root causes of the deficient documentation and data management practices; and the potential impact that these failures may have on its products.

FDA also suggested a third-party assessment of steps that involve “contacting customers, recalling products, conducting additional testing, adding lots to your stability programmes to assure stability, monitoring complaints, revising procedures, implementing new controls, training or re-training personnel".

A company spokesperson said Dr Reddy’s will not share details of its planned actions or measures before addressing these to FDA. “Our complete focus is on responding to the warning letter by a mutually agreed time line and addressing all concerns they have raised," the spokesperson said in an email.

Shares of the company tanked 8.21% to 3,110.35 at close of trading on Thursday on BSE Ltd even as the benchmark Sensex ended 0.71% up at 25,958.63 points.

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