Shares of Dr Reddy’s Laboratories Ltd (DRL) were trading in the red after the company announced that it had obtained an Establishment Inspection Report (EIR) for its manufacturing plant (CTO-6) located in Srikakulam, Andhra Pradesh, from the US Food & Drug Administration (USFDA).

The US drug agency has categorised the inspection as “Voluntary Action Indicated” (VAI), which means that although some minor concerns were uncovered, no major breaches were discovered.

The fact that the USFDA classified the inspection as a VAI means that it believes the facility is functioning in accordance with its regulations and that it does not plan to take any additional action.

In its regulatory filing, the company said, “The USFDA has classified the inspection as Voluntary Action Indicated (VAI) and concluded that the inspection is closed.”

This follows the company’s earlier intimidation from 7 June 2024 regarding the inspection conducted by the US regulator at the company’s Active Pharmaceutical Ingredient (API) facility.

Moreover, the National Medical Products Administration of China (NMPA) suspended the import, sale, and use of the company’s Atomoxetine Hydrochloride, which is used to treat attention deficit hyperactivity disorder (ADHD) in both children and adults. 

The NMPA recently conducted a remote inspection of DRL’s FTO-3 formulations manufacturing facility, focusing on Atomoxetine Hydrochloride capsule production. The inspection revealed non-compliance with China’s Good Manufacturing Practices (GMP) for Drugs. 

As a result, the National Drug Joint Procurement Office (NDJPO) revoked DRL’s “won” status for Atomoxetine Hydrochloride, impacting the company’s supply to the Chinese market.

Furthermore, the company cannot engage in central drug procurement activities until 28 February 2026, as it has been added to the NDJPO’s Violation list.

At 12:32 pm, the shares of Dr Reddy’s Laboratories were trading 0.305 lower at Rs 6,675.95 on NSE.

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