Lupin's MP plant under FDA scanner

Firm gets a 483-observation for violation of Current Good Manufacturing Practices, which could lead to a warning or import alert

Drug makers including Lupin, have come under the scanner of the US Food and Drugs Administration (USFDA), which has raised concerns over the manufacturing practices followed by these companies. Natco and Alembic Pharma are the other firms to have come under the scanner in the past two days.

Lupin received a Form 483 observation for its manufacturing plants at Mandideep in Madhya Pradesh; its second site after Goa to come under scrutiny. The two units contribute nearly 80 per cent to the drug maker's US sales (the US market accounts for more than 40 per cent of its total revenue). The stock plummeted 12 per cent in intra day trade on prospects of adverse impact on the business.

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• Fresh concerns over Lupin plant

The stock later recovered and closed 6 per cent lower, after the company clarified the observations were not serious in nature and would not lead to supply disruptions. It said no remediation measures were required and no disruption in supply was expected from the plant.

“We believe that these observations are minor in nature and have already addressed these observations. We believe that the outcome of the audit will be Voluntary Action Indicated only and no remediation would be required,” it said.  

Lupin said one of the observation which was erroneously quoted relates to use of non-conforming intermediate for making API prior to 2015.

“This was based on laboratory trials and scientific rationale, that further processing steps were capable of producing desired quality API. All API batches and drug product batches manufactured using such APIs complied with the specifications and hence were released in the market. Appropriate corrective and preventative actions were already implemented in 2015 and verified by the FDA investigator.”

As an abundant precaution, we have since recalled batches manufactured from this period. There is no financial impact of the recall. We don’t expect any disruption in product supply. There are no pending applications from the facility,” it said.

The market reaction indicates investor nervousness. Pharma stocks have underpeformed the broad index since January, with Lupin itself falling 24 per cent on a year-to-date basis.

A Form 483 is issued for violations of current manufacturing practices which if unaddressed can lead to a warning letter or import alert by the regulator.

Lupin has a dosage and an active pharmaceutical ingredient plant at Mandideep, both of which were inspected last month. Separate 483 observations were issued to the company following the inspections.

Brokerage firm IIFL, in its report said, the FDA observations to Lupin were serious in nature and pertained to violations in standard operating practices. It added it would require up to 18 months to complete remedial action.