US FDA wants third-party audit of Dr Reddy's units

Drugs major says clause that will come into effect in March 2017 was at odds with Make in India initiative

The US Food and Drug Administration (FDA), which had issued a warning letter to Dr Reddy's Laboratories over quality issues two weeks ago, said it might even refuse entry of products into the US from the three plants cited in the letter if the company fails to correct the violations.

Until the company completes all corrections and confirms compliance with current good manufacturing practices  it may withhold approval of new applications, a drug product or active pharmaceutical ingredients, it maintained.  The US drug regulator has suggested corrective actions on each of the critical observations, related to three manufacturing facilities of Dr Reddy’s. FDA in its warning letter dated November 5 — which is now available on its website — also asked Dr Reddy’s to conduct third-party audits as part of the compliance exercise. Dr Reddy’s on November 10 had informed the stock exchange about the US drug regulator’s order. The company spokesperson did not respond to a query about the reference to this previously existed testing lab.

Meanwhile, the company on Wednesday said the Centre’s move on introduction of sunset clause for special economic zones (SEZs) with effect from March, 2017, was at odds with the ‘Make in India’ objective.

Reacting to the government’s press release on simplification of taxation laws,

Dr Reddy’s president and chief financial officer Saumen Chakraborty said the sunset clause could be deferred for a few more years, considering the significant investments by the companies, as also the impact of SEZs encountered due to the minimum alternate tax levy.