In the past decade, Indian pharmaceutical companies have experienced an increase in regulatory inspections from the U.S. Food and Drug Administration (FDA), yet the rate of Official Action Indicated (OAI) classifications has dropped by half, according to a representative from McKinsey & Company.
Official Action Indicated (OAI) classifications refer to regulatory or administrative actions recommended by the FDA. Over the last ten years, the percentage of OAIs has decreased from 23% in 2014 to just 11% in 2024, as highlighted by Sathya Prathipati, a senior partner at McKinsey. In 2014, there were 109 inspections conducted by the FDA, with 25 resulting in OAIs. By 2024, the number of inspections increased to 166, but the number of OAIs decreased to 19.
During this period, inspections of global pharmaceutical companies fell from 1,849 to 940, while the percentage of OAIs escalated from 6% to 14%. Prathipati noted that the nature of observations from inspections has shifted; issues now commonly include aseptic practices or contamination, maintenance gaps that jeopardize sanitary conditions, and unexplained discrepancies.
The upcoming Global Pharmaceutical Quality Summit, organized by the Indian Pharmaceutical Alliance—a platform for major domestic pharmaceutical manufacturers—will, however, not feature representatives from the U.S. FDA. Organizers attribute their absence to the ongoing transition within the agency under the new administration.
Additionally, the summit coincides with reports of opioid misuse allegedly linked to an Indian company in West African nations. Industry representatives indicated that the Indian drug regulator has halted the production and export of a combination drug implicated in these reports.
Sudarshan Jain of the Indian Pharmaceutical Alliance emphasized the significance of the $58 billion Indian pharmaceutical market, which supplies 70% of the world’s anti-retroviral medications and 60% of global vaccine supplies. Currently, there are 2,050 WHO-GMP (Good Manufacturing Practice) certified plants and 752 facilities approved by the U.S. FDA in India. To further support the industry, the association is establishing training institutes in Ahmedabad and Hyderabad, with sites finalized at both locations to educate graduates and industry professionals.
