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Many high quality drugs are manufactured in India, and the sub-continent has become the largest generics manufacturing location in the world. But it also has a significant problem with counterfeit and substandard drugs.

The enforcement of private rights (notably trademarks) must be given more support, both domestically and in international fora such as at WHO and with respect to the EU.

Further, the Government of India should not sponsor and promote reports which contain much misleading information concerning drug quality in India. Worse, some state governments have been very lenient towards local counterfeiters. In some instances officials have been directly bribed, and nearly all courts throughout the country have considerable backlogs of cases--allowing traders of potentially lethal products left free to ply an odious trade.

Our surveys show that a small but significant proportion of drugs purchased at retailers and traders in Delhi and retailers in Chennai fail at least one quality test. A significant minority of actors (manufacturers, wholesalers, pharmacies) are intentionally supplying counterfeit and substandard medicines in order to line their own pockets.

Fortunately private companies are finding innovative ways of preserving the identity of their products from counterfeiters, through serialisation systems (utilising new technologies) and more secure supply chains.

But such measures can only go so far. These companies, and patients, need the protection of the law, operated under efficient, independent and fair courts--both civil and criminal. Their prosperity and health relies on it.

This study is available as an Adobe Acrobat PDF.

Roger Bate is the Legatum Fellow in Global Prosperity at AEI. Julian Harris is a research fellow at the International Policy Network (London, UK). Barun Mitra is the Executive Director at the Liberty Institute (Delhi, India). Lorraine Mooney is a Medical Demographer at Africa Fighting Malaria (Cambridge, UK).