Dr. Reddy’s Expects U.S. FDA Inspection Of Andhra Pradesh Plant By 2019-End
The U.S. FDA had in November 2015 issued warning letter relating to manufacturing practices at Dr. Reddy’s Srikakulam plant in Andhra Pradesh. (Photographer: Scott Eells/Bloomberg News)

Dr. Reddy’s Expects U.S. FDA Inspection Of Andhra Pradesh Plant By 2019-End


Dr. Reddy’s Laboratories Ltd. is expecting an inspection of its Active Pharmaceuticals Ingredients plant in Srikakulam, Andhra Pradesh, by U.S. Food and Drug Administration by the end of this year, Chief Executive Officer GV Prasad said on Tuesday.

"The API plant at Miryalaguda was given an Establishment Inspection Report in 2017 resolving the earlier warning letter. We also received EIR for the injectable site at the Duvvada and we are awaiting for CTO VI site at Srikakulam," Prasad, who is also the co-chairman and managing director of Dr. Reddy’s, said at the company’s annual general meeting in Hyderabad.

“Based on discussions, we expect an inspection ( by the U.S. FDA) later this year and are hopeful for resolution of the matter,” he added.

The U.S. FDA had issued warning letter in November 2015 relating to Current Good Manufacturing Practice deviations at Dr. Reddy's API manufacturing facilities at Srikakulam in Andhra Pradesh and Miryalaguda in Telangana, besides its oncology formulation facility at Duvvada, Visakhapatnam.

The U.S. FDA reinspected the Miryalaguda plant in January 2019 and issued an EIR against it in May 2019.

In February 2019, the U.S. FDA issued an EIR for the Duvvada plant and determined the inspection classification of this facility as Voluntary Action Initiated.

"In March 2019, we responded to the follow-up questions from U.S. FDA regarding the API facility in Srikakulam. Based on the subsequent discussion with U.S. FDA, we expect a reinspection to be conducted for the site," Dr Reddy's said in its latest annual report.

On the pharma industry, Prasad said major players across the world were in turmoil and drug manufacturing companies were under significant pressure because of the pricing environment in the U.S.

That said, Dr. Reddy’s Q1 results declared recently showed its profit beat estimates on the back of higher other income and improved sales in all key markets. Profit was aided by the Rs 345.7 crore settlement with U.S. drugmaker Celegen Corp. That compares with the Rs 482-crore consensus estimate of the analysts tracked by Bloomberg.

According to Prasad, there is also a disruption in the emerging markets as well as new opportunities in China.

"Healthcare systems around the world are facing huge cost pressures. We believe that these difficult industry situations which look like threats to our industry actually be huge opportunity for focused and efficient players," said Prasad.

Going forward, Dr Reddy's has chalked out three themes for implementation: building strengths in its core businesses of API and Generics, streamlining biosimilars and proprietary product business to accelerate their path to profitability, and continence of operational excellence across various functions to build world-class competitiveness.

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