FDA warning fails to deter investors’ confidence in Cadila Healthcare

MUMBAI: The tough warning by USFDA (Food & Drug Administration) did not deter investors’ confidence in Ahmedabad-based Cadila Healthcare, as the stock bounced back on Wednesday after seeing a drop in the past one week. The shares closed up 1.83% at Rs 319.3 at the BSE on Wednesday as investors did not spot data integrity issues with the warning.

The USFDA has pulled up Cadila Healthcare for not taking corrective and preventive action for violations of and deviations from current good manufacturing practices at two plants, saying its process was “not in a state of control”. The FDA also raised concerns over Cadila’s lack of response to consumer complaints and failures in maintaining proper records.

The regulator’s warning comes after lapses were discovered during inspections of two plants in Ahmedabad in 2014, and after the company’s responses were reviewed. “Our inspection found that your firm did not adequately investigate and address consumer complaints on multiple occasions,” Thomas Cosgrove, director in the FDA’s office of manufacturing quality, wrote in a warning letter dated December 23 addressed to Cadila chairman and managing director Pankaj R Patel.

“Over a three-year period, your firm received nine consumer complaints related to potential mix-ups among products produced at your facility. Complaints were reported by different pharmacies and distributors.” The letter said that although Cadila had documented that some of the mixed-up drugs were manufactured on adjacent equipment lines, it never completed the root cause analysis.

Another issue the FDA highlighted was the failure to record quality-related activities. The US regulator said its inspectors found that employees used “rough or unofficial notebooks” to document various good manufacturing practices. The FDA asked Cadila to inform it about steps being taken to “correct and prevent the recurrence of violations and deviations” and to provide supporting documentation within 15 days or indicate by when it can complete the corrections.