 "pharma, drugs, medicine")
The US Food and Drug Administration (USFDA) recorded a significant decline in serious regulatory findings at Indian drug manufacturing facilities between January and December 2025.
Data reveals that ‘official action indicated’ (OAI) cases — the most severe classification — nearly halved over the past year. This signals a shift in the compliance landscape even as manufacturers grapple with high remediation costs and persistent enforcement risks.
In the crucial drugs segment, OAI instances dropped to 11 in 2025 from 20 in 2024.
These classifications are critical for the industry, as they often serve as precursors to warning letters, import alerts, or legal action.
The overall volume of inspections also saw a contraction.
The US regulator conducted 212 inspections of drug facilities in India during 2025 compared to 284 in the previous year for which inspection outcomes have come out.
If one considers devices and biologics manufacturing units, then the overall inspections stood around 218 compared to 299 last year.
Outcomes may take a few weeks to a few months following the inspection. Hence, the overall inspection numbers could be marginally higher.
No Action Indicated (NAI) observations for drug facilities fell to 109 in 2025 from 158 a year earlier, while voluntary action indicated (VAI) cases declined to 92 from 106 (see chart).
Under the USFDA’s classification framework, an NAI outcome indicates that no objectionable conditions were identified during an inspection. A VAI classification points to deficiencies that firms are expected to address voluntarily without immediate enforcement. An OAI classification signals serious regulatory violations that may warrant administrative or legal action.
Final inspection classifications are typically communicated within 45-90 days of inspection completion.
While the decline in adverse outcomes is notable, industry experts warn against complacency. They caution that the decline in adverse outcomes should not be interpreted as a softening of regulatory standards.
The drop in NAI and VAI cases suggests that while there are fewer “clean” reports, the regulator is also conducting fewer routine visits.
“Lower OAI counts in 2025 reflect a shift in regulatory focus rather than leniency,” said Nirali Shah, pharma analyst at Ashika Group. “With weaker facilities already filtered out, scrutiny has moved towards complex products and supply-chain risks.”
Despite the broader statistical improvement, individual enforcement actions remain a thorn in the side of major players.
On December 18, Sun Pharmaceutical Industries confirmed that its Halol facility in Gujarat was classified as OAI following a June 2025 inspection. The plant remains under an import alert, blocking most shipments to the US.
Conversely, Lupin secured a win in January when its Pithampur Unit-1 received a VAI classification, which the company described as a “satisfactory outcome” following its 2024 inspection.
While the number of severe findings has dipped, the impact of existing enforcement remains steady.
According to ratings agency ICRA, the number of import alerts and warning letters issued to Indian sites stood at 23 for the first 11 months of 2025, largely consistent with previous years.
The number of import alerts and warning letters issued to Indian facilities stood at 25 in 2023 and 21 in 2024.
OAIs typically escalate to warning letters and import alerts.
Mythri Macherla, vice-president and sector head at ICRA, said these actions carry a heavy price tag.
“These lead to delayed launches, failure-to-supply penalties, and significant remediation costs — including external consultants — that can weigh heavily on profitability,” Macherla added.
For Indian pharmaceutical companies, data indicates that while inspection outcomes improved in 2025, regulatory compliance and supply-chain resilience remain critical risk factors.
This comes as the USFDA sharpens focus on complex therapies and global manufacturing networks.
