It has had a snow ball effect across 26 countries of Europe. Concerns raised by the French drug regulator ANSM - the French National Agency for Medicines and Health Products Safety - on the data generated by GVK Biosciences (GVK Bio) has caused a major hit to the reputation of the company that could have implications on the future viability of its generic drug testing business.
Technically, it is called the clinical pharmacology business. This is one of the six businesses of the Rs 700 crore company and contributes about 10 to 12 per cent of its total revenues.
"While we respect the decision of the regulatory authority and will re-do all the studies again, we are clearly disappointed by the outcome and do feel it raises questions on the future viability of this business," Manni Kantipudi, Chief Executive Officer of GVK Biosciences told Business Today.
Kantipudi points out that the company has been following the best practices for the last 10 years.
"We have provided detailed clarifications and third party findings (from doctors) but unfortunately the ANSM/CHMP (Committee for Medicinal products for Human use) has concluded that though the 'check-out' ECGs, which have no direct relevance to the quality of the testing of drugs, the fact that the same employees were involved in other critical activities, left an element of doubt on the bio-equivalence results," he says.
The "check-out" ECGs are electrocardiograms or tests to see the performance of the heart of the volunteers before they leave the facility after participating in studies.
Nevertheless, he says that "GVK will undertake again all the bioequivalence studies made between 2008 and 2014. These are some 110 to 115 and will involve an additional cost of around Rs 40 crore over the next 12 to 15 months."
This business, which has operations in Hyderabad and Ahmedabad, is hit and down to zero with concerns raised over the operations out of Hyderabad.
The French regulatory authority has on its website said the inspection revealed irregularities in documents associated with these trials although these documents are not essential to the demonstration of bioequivalence.
As a precaution, (it was decided to) suspend the marketing authorisation of 25 marketed generic drugs.
*The name of the company has been corrected in the headline