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India’s generics supply to US in jeopardy

People check a list of medicine prices outside a drugstore in CaracasU.S. regulators are mobilizing to shore up confidence in America’s generic-drug supply as alarm grows over the quality of products made in India, and the head of the largest U.S.-based maker of the medicines predicted more trouble lies ahead.

“It’ll get worse before it gets better,” said Mylan (MYL) Inc. Chief Executive Officer Heather Bresch, whose company has half of its more than 20,000 employees in India. As regulators boost inspections there, consumers will see “more market disruption, more companies being shut down, more bans on facilities,” she said in an interview. “I’d be shocked if there’s not.”

Food and Drug Administration officials said they plan to be more transparent on how they regulate the $30 billion industry as a way to persuade U.S. consumers that safeguards are in place. Generic drugs, which make up 84 percent of the medicine used in the U.S., helped Americans save $193 billion in 2011, an industry group has said, as health-care costs rise and insurers force more consumers to use them.

The FDA is studying where “knowledge gaps” about generic drugs exist for consumers and wants to increase the number of people responsible for communication on generic drugs to 10 from two or three, Kathleen Uhl, acting director of the agency’s Office of Generic Drugs, said yesterday in an interview. A 2012 law increased funding for generic-drug reviews.

“Our vision with setting up a communications team in OGD is to help educate the public about the drugs that fill the majority of prescriptions in the U.S. and help consumers and health-care providers understand that generics approved by the FDA are of high quality, safe, and effective,” Sandy Walsh, an agency spokeswoman, said in an e-mail.

Over the past nine months, the FDA has banned four Indian plants — two each belong to Wockhardt Ltd. and Daiichi Sankyo Co.’s Ranbaxy Laboratories Ltd. (RBXY) — from selling drugs in the U.S., and said it is increasing the inspections it will undertake there. The comments by Bresch yesterday followed a congressional briefing a day earlier in which doctors and researchers said the quality of generics from India is inconsistent at best.

Indian companies supply a quarter of the medicines used in the U.S. In 2012, $260.8 billion were spent on prescription drugs in the U.S. with $30 billion for generic medicines, according to the U.S. Centers for Medicare and Medicaid Services and data compiled by Bloomberg.

Mylan, the Canonsburg, Pennsylvania-based maker of more than 1,300 generic drugs, had 21 facilities located in India at the end of 2013. The company supported a 2012 law that required generic-drug makers to pay fees to have their products reviewed by the FDA, Bresch said in an interview at the company’s New York City offices. Those fees will help produce funding to raise the number of agency staff in India to 19 from 12, and will support more inspections, the FDA has said.

In the past, the lack of funding for FDA inspection overseas led some companies to operate with looser standards, Bresch said.

“If there’s no speed limit, would anybody drive the speed limit?” she asked. “Knowing there’s no chance of getting caught leads to chaos.” The generic-drug fee system will change that, Bresch said.

Mylan’s products shouldn’t be lumped in with those made by India-based companies, according to Bresch. Mylan has a “one-quality” standard, meaning that it holds its factories in India to the same standard as its U.S. facilities, she said. Mylan is currently working to bring up to code plants gained in the acquisition of the Agila injectable drugs unit of Indian drugmaker Strides Arcolab Ltd. (STR), which were cited by the FDA for manufacturing issues.

Drug safety isn’t just an issue for generics companies, she said. “Brand companies have had more than their fair share of recalls and consent degrees,” Bresch said.-Bloomberg