Photographer: /Bloomberg

Mylan Gets FDA Warning on Drug Quality at Factory in India

  • Drugmaker failed to investigate failed testing, regulator says
  • Stock falls as much as 2.2% after warning letter disclosed

Drugmaker Mylan NV failed to investigate why medications made at a factory in India didn’t meet quality standards and frequently didn’t report the substandard results from its tests, the U.S. drug regulator said.

The quality system at Mylan’s facility in Maharashtra, India, “does not adequately ensure the accuracy and integrity of data to support the safety, effectiveness, and quality of the drugs you manufacture,” the Food and Drug Administration told the company in a warning letter dated April 3 that was posted Tuesday. The shares fell as much as 2.2 percent.

While a lot is unknown -- including what kind of products are made at the plant and whether there’s any commercial risk for Mylan -- “in our experience, when something reaches a warning letter stage, it can show that the FDA is dissatisfied with the company’s attempts to explain or remediate the issue,” David Maris, an analyst at Wells Fargo Securities, said in a note to clients. He rates the stock market perform.

The letter highlights the FDA’s increased scrutiny on overseas production facilities in recent years, especially in India and China, where more than 80 percent of ingredients used in the U.S. drugs are produced. The agency stepped up its oversight as concerns have arisen about safety and reporting procedures, banning more than 40 factories in India from sending products to the U.S.

Mylan is “working closely with FDA to respond to and address the issues raised in the letter as comprehensively and expeditiously as possible,” said Nina Devlin, a company spokeswoman, in an email. The site continues to operate and is “in good standing with other global regulatory entities,” she said. The company doesn’t specify which products are made at its facilities, she said. 

The stock was down 1.9 percent to $38.50 at 12:12 p.m. in New York.

Error Signals

Mylan invalidated 101 out of 139 tests that showed from January through June 2016 that drug batches didn’t meet certain quality specifications, according to the FDA, which inspected the plant in September. The company didn’t investigate the reason for those failures, nor did it probe error signals that indicate lost or deleted quality data, the agency said.

In instances when it did investigate, Mylan often blamed the failing results on “power interruptions, connectivity problems (disconnection of the Ethernet or power cord), and instrument malfunctions,” according to the warning letter. Mylan retested the samples immediately after the interruptions, the FDA wrote.

The drugmaker has hired a consultant to help it meet U.S. requirements, the FDA said. The agency asked Mylan to conduct a detailed investigation of the extent of the inaccuracies and a risk assessment of the potential effects of the failures on the quality of the company’s drugs. The FDA said it could withhold approval of new drugs until it can confirm compliance with quality standards.

— With assistance by Jared S Hopkins

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