Ipca’s Wait For U.S. Exports Gets Longer After Fresh FDA Observations For Piparia Unit

The U.S. market has been out of bounds for Ipca Laboratories Ltd. since 2015 when the American drug regulator issued import alert against three of its facilities. The wait might get longer.

Its units in Indore and Ratlam in Madhya Pradesh and Piparia near Silvassa, Dadra & Nagar Haveli, can’t export to the U.S. following the import alert. The company, according to its Aug. 24 filing, received three fresh observations from the U.S. Food and Drug Administration after inspection at the Piparia plant.

While Ipca didn’t disclose the details, the U.S. FDA said manufacturing practices didn’t meet required standards, no review is carried out when a batch or ingredients fail to meet specifications and quality control procedures are not followed, according to the Form 483—BloombergQuint has reviewed a copy. The regulator said the drugmaker wasn’t able to investigate the root cause of impurities and failure of results.

The U.S. FDA will take some of the observations very seriously, Amit Rajan of Prosfora Technologies, a firm which advises pharma firms on good manufacturing practices, told BloombergQuint. He said the second observation summarises that whatever corrective actions taken were misleading and the company hasn’t made progress on data integrity since the last inspection and, in fact, the standards slipped.

The company didn’t immediately respond to BloombergQuint’s emailed queries. But it said in its filings that it will submit its comprehensive response to the U.S. FDA within the stipulated time frame. This was the first inspection since the 2015 import alert.

Here’s what the U.S. FDA said in the Form 483:

Observation 1: Deviations from written test procedures and laboratory mechanisms are not recorded and justified.

• The unit has not been effective in carrying out its duties of ensuring that drug products are manufactured in accordance with current good manufacturing practices.
• The firm is unable to investigate the root cause for presence of unknown peaks and impurities in active pharma ingredients used in drug manufacturing.
• The firm lacked adequate oversight on employee practices for conducting quality control tests and reviewing test data prior to batch release.
• The U.S. FDA raised queries on incomplete data, questioning the data integrity procedures of the company.
• The discrepancy in the firm’s ability to retrieve, review and investigate all electronic raw data is a significant gap in the data Integrity procedures.

Observation 2: There is a failure to thoroughly review any unexplained discrepancy and failure of a batch or any of its components to meet any of its specifications—whether or not the batch has been distributed.

• Out-of-specification and out-of-trend investigations are deficient; failures were invalidated based on acceptable retest results without identifying the root causes.
• The FDA pointed out three instances, including changing equipment, wrong technique and non-monitoring of drugs.

Observation 3: The responsibilities and procedures applicable to the quality control unit are not fully followed

• The quality unit deviated from written procedures and failed to timely identify and investigate root cause, take appropriate corrective and preventative action and close investigations within defined timelines.
• The unit allowed the destruction of draft and interim laboratory investigation reports using shredders.

Brokerage View

Based on the the company’s filings which didn’t give details of the observations.

HSBC

• The company has spent more than Rs 100 crore on plant remediations over the past two years.
• The inspection of the Piparia plant broadly indicates the U.S. FDA has noted remediation measures submitted by Ipca and it can inspect the Ratlam and Pithampur plants in the near term.

Prabhudas Lilladhar

• There are 30 drug filings pending with the U.S. regulator, with the majority of them coming from the company’s Indore plant and few from Piparia.

Emkay

• One of the key catalysts for stock re-rating would be U.S. FDA clearance for the three plants as Ipca has 48 pending filings from the facilities.
• Ipca incurs Rs 70-80 crore annual losses due to the under-utilisation of these plants along with remediation expenses.