Divis Pharma refuses FDA inspection, lands up on the Import Alert List

Created: 31 Aug 2016

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Over the last few months, several Indian and Chinese

companies have been placed on import alert for refusing an
inspection by the FDA
Indian active pharmaceutical ingredient (API) manufacturer and
the darling of the Indian bourses Divis Laboratories received
a setback this week when its affiliate Divis Pharmaceutical
Private Ltd got placed on FDAs Import Alert List for refusing an inspection by the USFDA.
The two facilities of Divis Pharmaceutical Private Ltd that were placed on the FDAs Red List
are Divi Towers in Hyderabad, and a facility in Medak district, Telangana. Divi Towers is also the
corporate headquarters of Divis Laboratories. The facility in Medak manufactures APIs such
as fluoxetine for which Divis Pharma had recently applied for permission to expand its
manufacturing footprint.
The refusal to permit inspection of a foreign facility or provide reasonable access to FDAs
inspectional personnel, combined with other evidence, provides an appearance that the firms
products are manufactured, processed, or packed under insanitary conditions, says the FDA
website.
Divis Laboratories, which posted sales of US $ 586 million (Rs 3,816 crore) last year, was founded
by Dr. Murali Divi in 1990 as Divis Research Centre. In the 1980s, Dr. Divi, along with Dr. Anji
Reddy, had taken over Cheminor, an ailing contract manufacturing company Dr. Divi also joined
the board of the newly formed Dr. Reddys Laboratories in 1984. Few years later, Dr. Divi and Dr.
Reddy parted ways.
Divis Pharma has Dr. Divi on its board, though the company is being run by his nephew Mohan S.
Divi, who is its managing director.

Joining others who refused inspection

Along with Divis Pharma, Mumbai based G. Amphray Laboratories was also placed on the import
alert list. The FDA action follows similar episodes in June when Indian contract manufacturer
Cheryl laboratories and API and intermediate manufacturer, Phalanx Labs Visakhapatnam site
were banned from exporting products to the US as they too had refused FDA inspections. Cheryl
Laboratories manufactures creams, ointments, gels and antiseptic solutions.
On August 11 this year, Laxachem Organics Private Ltd was placed on import alert for refusing to
allow FDA inspectors to inspect their Ahmednagar facility in Maharashtra. The import alert stops
all Laxachem pharmaceutical products from entering the United States legally.
Laxachem will remain on import alert until it has been fully inspected by the FDA and found to
meet US standards. The company manufactures APIs for repackagers, labelers, and wholesale
drug distributors, some of which sell API to manufacturing facilities in the US.
In China too, several companies have been placed on import alert for refusing an FDA inspection.

Our view
Over the last few years, FDA has increased inspections of foreign facilities in order to address
concerns related to the quality of APIs and formulated drugs manufactured overseas. This is
reflected in the dramatic increase in warning letters issued to manufacturers in countries like India
and China.
However, refusing an FDA inspection is a new trend. Companies often refuse an inspection if they
arent prepared for one, or if they find it unreasonable on part of the FDA to inspect a particular
office or facility.
For instance, a facility many not even be exporting drugs to the US. Or in the case of Divis, the
executives may have found it unwarranted to inspect their corporate office.
While manufacturers in India and China need to prepare themselves for more of such surprise
inspections, the FDA on its part needs to ensure that the inspection is indeed warranted.

Errata: This is an updated version of the story. This website inaccurately mentioned Divis
Laboratories in its headline in the version posted on Aug 31, 2016. The error is regretted.