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For the past decade India’s major pharmaceutical companies, alongside the public
health community and police services, have attempted to drive forward a modern
drug regulatory system which, among other things, would have effectually
combated the scourge of counterfeit and substandard drugs. But due to a
combination of lobbying from middle-sized companies making suspect quality
drugs, as well as some states, which wanted to maintain control of drug quality
decisions, the status quo is to remain. This is a tragedy for the many thousands
who die annually from substandard medicines in India (and from India exports to
Africa and Asia), most estimates say that at least 10% of Indian drugs are
Radical revisions to the Drugs and Cosmetics Act of 1940 have been proposed
on and off for the past thirty-odd years. Yet the major amendments proposed in
October 2007 would have increased the minimum jail time for convicted drug
counterfeiters from five years to ten years and increased the minimum fine for
such offenses from 10,000 rupees (about $320) to a million rupees (about
In November 2008, The Indian health minister, Anbumani Ramadoss from Tamil
Nadu, pledged that through this amendment the Indian government would “go all
out to do away with spurious drugs.” But while he certainly tried to push the
amendments through parliament, and succeeded through the upper house, he has
failed to even get the lower house to hear the bill. With an election expected
in two months the amendments will have to wait for another administration. Some
local pharmaceutical company experts consider it may be years before the
amendments are tabled again.
The amendments would have created a central drug authority, which in
principle would have administered the entire drug regulatory system, overseeing
drug quality and authorizing product marketing. At the moment the Drug
Controller General of India authorizes new domestic and imported drugs but the
manufacture of drugs is controlled by individual state drug authorities. The
DCGI is underfunded and the states vary in the demands they place on companies
and the monitoring and enforcement of those companies infringing rules.
Maharastra, home to many large and respected pharmaceutical companies has nearer
western style quality control, with at least some push towards what would be
considered oversight of Good Manufacturing Practice (GMP). Whereas Uttar
Pradesh, home to many counterfeiters, has weaker oversight and non-existent GMP
control. Yet a drug manufactured and approved in one state can be sold anywhere
in the country, or exported. Substandard producers can locate in states with
weak controls and ply their wares everywhere, allowing hundreds of substandard
state-approved medicines to proliferate.
According to well placed locals, behind the scenes lobbying by politicians
from states with weak GMP controls, prevented the amendments from becoming law.
If they had failed they would lose revenue paid by pharmaceutical companies and
perhaps more importantly they would lose control. According to experts from
world class domestic and international pharmaceutical companies, while the
revenue loss would be minimal the loss of control would have meant a reduction
in opportunities for graft.
Meanwhile the U.S. Food and Drug Administration is establishing an office in
India to oversee drug quality exports to America. Now that the Indian Government
has effectively abdicated responsibility for quality control, it has made FDA’s
job much harder. By not squashing political opposition to the necessary legal
changes, India’s best companies may lose out on increasingly important export
India’s major pharmaceutical companies have been badly served by India’s
political system. While the Government plays to the militant anti-patent crowd,
defending the rights of politically connected companies that enjoy ripping off
western patents, it does nothing to improve the image of Indian companies
oversees. When the FDA banned the exports to US in fall 2008 of India’s largest
drug company, Ranbaxy, it was a major blow to Indian prestige, yet few found the
ban unexpected, given the lack of oversight by the Indian Government. Companies
like Ranbaxy are always looking for ways to cut costs, and even if top
management want to maintain high quality it is very easy for lower level
managers to cut corners if there is no local oversight.
If some of Ranbaxy’s drug stability data was falsified, as alleged by FDA and
US Department of Justice, is anyone really surprised?
India has seen how a series of product scandals took a harsh toll on China’s
global credibility, its arch-rival in industrial development, yet it has
squandered the chance to clean up its own act. This will, sooner or later, come
back to bite them.
Since 1975, successive Indian government commissions have urgently
recommended product safety reforms and been ignored. Perhaps only when hundreds
die oversees from Indian exports, and its drugs are discredited and then banned
across the world, will the necessary changes be made.
Roger Bate is a resident fellow at AEI.
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