Indian regulators have launched an inquiry into Abbott Healthcare’s supply chain for its codeine-based cough syrup Phensedyl, which the company halted production of in December 2024. Officials from the Uttar Pradesh state drug department conducted an on-site visit to Abbott’s Himachal Pradesh manufacturing facility on January 14, obtaining detailed manufacturing and distribution records. Though Abbott has not been named as an accused party, investigators are scrutinizing how existing inventories have continued to flow into the market through unofficial channels.

A government document reveals that between April 2024 and March 2025, approximately 22 million bottles of Phensedyl—valued at roughly $55 million—were distributed to wholesalers and vendors in Uttar Pradesh. This volume far exceeded estimated therapeutic requirements, prompting officials to conclude that a significant portion of the stock was being diverted for non-medical use. In one operation, authorities recovered about 30,000 bottles concealed in rice sacks on freight trucks, underscoring the scale and sophistication of the parallel diversion network.

Investigators are particularly concerned about cross-border smuggling into Bangladesh, where Phensedyl is banned, heightening regional public health risks. The probe’s findings could trigger tighter controls on narcotic cough syrups nationwide, potentially leading to more stringent record-keeping requirements and stricter penalties for distributors. For investors, an extended regulatory sweep may affect Abbott’s generics and established pharmaceuticals operations in India, a key growth market that accounted for over 15% of the unit’s revenues in the latest fiscal year.