On June 20, 2024, Sun Pharmaceuticals Limited, India’s largest drug manufacturing company, made an announcement that its Dadra facility has received a warning letter from the United States Food & Drug Administration (USFDA). The letter they received was regarding the violations related to Current Good Manufacturing Practice (cGMP) regulations. They have violated critical guidelines related to the quality and safety of manufactured drugs.
Inspection and Official Action Indicated Status
The USFDA inspected the Dadra facility between December 4, 2023 and December 15, 2023. They had also issued an Official Action Indicated (OAI) status on April 11, 2024. This OAI status is the most stringent regulatory action. It indicates that further regulatory or administrative measures may be recommended for the Dadra facility.
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Company’s Response
Dilip Shanghvi, MD & Chairman of Sun Pharma, has expressed concern over the audit’s negative outcomes. In a recent call with an analyst Dilip Sanghvi said, “We are concerned about the negative outcomes in the audit report. I think it is our job to find a way to ensure that we come out of whatever the learnings that we have so that we perform better in subsequent audits.”
Shanghvi has also mentioned Sun Pharma’s implementation of corrective measures and expects a positive outcome in future audits.
Impact on Stock Market
The Dadra unit is very crucial for Sun Pharma. It produces oral solid dosage forms and manufactures the generic Revlimid, a key driver of sales for the company. Despite the warning letter, Sun Pharma is confident to take corrective actions.
On the D-Street, shares of Sun Pharma closed 1.05% lower on Wednesday at INR 1,505. In 2024, its stocks have seen a surge of 20%.
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Future Developments
In due course, USFDA will make the contents of the warning letter public. Sun Pharma’s management remains committed to addressing the issues. They are confident in improving their manufacturing practice to meet the regulatory standards as per USFDA.
About the Author
Mr. Radhesh Tarang Shah, is a third-year management student at Institute of Management, Nirma University. He has a passion for writing articles and poems. He has experience as a financial analyst, author, news writer, marketer and social worker.
