Hyderabad: Dr.Reddy’s Laboratories Ltd chairman Satish Reddy has urged Indian drug makers to work together to address quality and regulatory issues faced by the industry.

The pharma industry faces greater regulatory scrutiny because India has the largest number of manufacturing sites approved by the US Food and Drug Administration (USFDA) outside the US, Reddy said.

Reddy told a shareholders’ meeting that the Indian Pharmaceutical Alliance (IPA)—the industry lobby group that represents large domestic Indian drug makers—is taking serious steps to enable all pharma companies to evolve a common quality strategy.

Reddy was president of IPA till December when he was replaced with Nilesh Gupta, managing director of Lupin Ltd, for the next two years.

IPA this year brought together three key regulatory bodies—the USFDA, UK health regulator Medicines and Healthcare Products Regulatory Agency (MHRA) and the Drug Controller General of India (DCGI)—to discuss a host of quality-related issues the industry is confronting.

“The major positive fall-out of the conference was a recognition of our industry’s need to shift focus—from merely trying to be compliant at an operational level to delving into the root causes for quality issues and resolving them at a more fundamental level," Reddy said.

“A road map has been drawn up, which places priority on enhancing collaboration with the government of India to strengthen regulatory systems, build confidence in quality standards, enhance current good manufacturing practices (cGMP) compliance and upscale technology innovations to meet regulatory stipulations," Reddy added.

Dr. Reddy’s on 5 November received a warning letter from USFDA for alleged violations of manufacturing standards for its active pharmaceutical ingredient plants at Srikakulam in Andhra Pradesh and Miryalaguda in Telangana, and an oncology formulations facility in Visakhapatnam (Andhra Pradesh).

The company said it had completed the remediation work and will be seeking USFDA’s re-inspection in the coming weeks.

Reddy expressed concern over the government bringing more drugs under price control, calling for a more balanced approach; price controls shouldn’t be imposed at the expense of innovation, he said.

Reddy said the industry has to live with the challenge of margins narrowing because of channel consolidation in the US, the largest market for generic drugs.

Large drug makers exporting to US are squeezed by more rivals filing applications for approval to introduce new drugs and consolidation of distribution channels which has hurt pricing power.

In 2012, Express Scripts Holding Co. and Medco Health Solutions Inc. merged in a deal valued at $29 billion. Similarly, in a more recent move in October 2015, Walgreen Co. acquired Rite Aid Corp. for $17.2 billion. Such transactions create large buying groups, which can push for higher rebates from drug makers.

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