The purpose of this paper is to identify the cause and effect of increased number of warning letters (www.fda.gov) issued by the Food and Drug Administration (FDA) of United States year after year in spite of clarity in the guidance published by the agency. Increased number of warning letters is matter of concern for the drug product / drug substance manufacturer, drug authority and end consumers (patients). Author identified six pharma professionals through their personal contacts and interviewed each of them. Poor quality management systems and lack of management oversight were found to be the key reasons for issuance of warning letters. Issuance of warning letters had adverse financial impact on business, delay in approvals thus loss of business opportunity and negative image of the organization among regulators, customers. Quality culture in the organization plays an important role to ensure regulatory compliance and building up the right quality culture in the organization is vital. Involvement of top management and participation in the management review meetings is essential for monitoring the compliance level in the organization.