About 180 new product launches, or 18% of the total pipeline, of large Indian pharmaceutical firms is likely to be delayed as the US Food and Drug Administration (FDA) issued twice the number of warning letters to these drug-makers within the first 10 months of 2019 as compared to the whole of 2018, a report by CRISIL said.

The US FDA issues warning letter to a pharmaceutical company’s plant when it observes repeated violations of good manufacturing practices at the facility. Usually when a warning letter is issued, the regulator withholds approvals for applications for new products.

“With intensifying regulatory scrutiny, sales growth (for Indian firms) from the US market will drop to 10-11% during fiscals 2020-22, compared with a growth of 16% in fiscal 2019," CRISIL Ratings director Sameer Charania said in its report. “A substantial delay in resolution of regulatory issues and/or heightened scrutiny could derail the US growth story."

The US, the most profitable market globally for generic drug makers, accounts for about ₹55,000 crore in annual sales, or a third of total topline of Indian firms, as per the report.

A similar trend was seen in 2015, when the US FDA had intensified its scrutiny of Indian pharmaceutical companies, and consequently US revenue growth had dropped to 6% in 2016-17 as new product launches got delayed, as per the report.