Tables turned: Mylan cited by FDA for quality violations at Indian plants
- Three of generics manufacturer Mylan's plants in India—all acquired in 2013 as part of the Agila Specialties purchase—have been cited by the FDA for quality-related manufacturing violations.
- Ironically, Mylan has been one of the most vocal critics of Indian biopharma companies' quality-related problems.
- Mylan has stated that this problem will not affect full-year earnings for 2015. The stock was down less than 1% on the news.
The FDA conducted inspections at Mylan's plants in India in August and September 2014, as well as February 2015. Mylan, which has 15 days to respond, has issued a statement affirming its diligence in addressing the FDA's quality concerns. In addition, Mylan stated that it has progressed with its efforts. That's a standard response and most likely reflects behind-the-scenes scrambling to bring all manufacturing facilities in India up to code.
The other part of this story is where the irony lies. Not only has Heather Bresch, CEO of Mylan, made pointed remarks about the woes of Indian biopharma companies, as they relate to quality-control problems, but she went as far as predicting that the situation in India will get worse in the near term and that the market will be disrupted. In addition, she predicted more company shut-downs and banned facilities. She even went as far as saying that Mylan has distinguished itself in contrast to the companies in India plagued by quality-related issues.
It should be pointed out that the acquisition of the Agila facilities was recent. The market does not seem to be overreacting, which may bode well for the outcome of this challenge. At the moment, Mylan is continuing to attempt to acquire Perrigo for $33 billion. but there is still a great deal of uncertainty around the outcome of these efforts.