The ubiquitous danger of substandard medicines

Shehzad Noorani/World Bank

Women working at GK Pharmaceutical Company in Bangladesh.

Article Highlights

  • Drugs are legally and poorly produced, which could lead to deadly results

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  • Recent study: More than 12% of drugs produced in emerging markets failed quality tests

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  • Counterfeit drug problem worse for emerging markets targeting home countries

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Dangerous medicines are a global problem. Increasing media attention focuses on the threat of counterfeit or falsified products which are intentionally made to deceive the patient. While counterfeits must be combated, drugs that are legally but poorly produced, substandard medicines-the subject of today's briefing-tend to get a free pass, even when they kill.

Demand for pharmaceuticals in mid-income and developing countries is increasing rapidly. Internationally-traded generic drugs, most commonly from India, not only have entered these markets, but tend to dominate them. Recently, many nations-sometimes supported by western aid agencies-have begun to develop their own pharmaceutical production capabilities.

In principle, expanded drug production is good for consumers, since increased competition will cause prices to fall, thereby increasing drug access and, ultimately, patients' welfare. Increased access to cheap products is only beneficial to the patient, however, if the products are "bioequivalent" (act in the same way in the body) to the approved products which they are copying.

"The worst offenders were domestic pharmaceutical manufacturers in Africa, followed by smaller producers in India, and all producers from China and Vietnam."--Roger Bate

What is a substandard drug?

Substandard drugs are medicines which are made by a licensed manufacturer supposedly adhering to pharmaceutical regulatory standards, but nevertheless fail to produce the correct therapeutic effect in the patient. This can be due to a variety of causes, including basic errors such as incorrect chemical ingredients or ingredient ratios. Repeated empirical studies revealed many errors of this type[1]. More complicated problems, which our analysis (published in a recent paper in the journal Pharmacologia[2] could not detect, include tiny, but potentially lethal, impurities and poorly chosen excipients (inert fillers and dyes) which prevent the active ingredient from releasing as planned in the body. These errors are caused by shoddy production and poor oversight of the often intricate formulation process.

Emerging Markets

In our analysis of over two thousand antibacterial and antimalarial drugs procured in 19 cities in emerging markets, we found that more than 4% (subsequent analysis shows it's more like 5%) of the legal products on sale were substandard (over 12% failed quality tests, but the majority of these were obviously degraded or counterfeit). The worst offenders were domestic pharmaceutical manufacturers in Africa, followed by smaller producers in India, and all producers from China and Vietnam. Products from large Indian, European, and American producers were consistently high quality.

India provides some insight into the factors which contribute to good production. Larger Indian companies performed better than the smaller ones, but it is perhaps more relevant that the best performing companies came from two states, Maharastra and Andra Pradesh[3]. Experts agree that these states enforce good manufacturing practices (GMP), whereas other Indian states are less diligent. It is unclear whether tougher regulation drives better performance, or better performing companies demand better regulation as a barrier to entry, but either way, overall quality is better.

All companies can make mistakes, but following GMP should ensure that company systems catch basic errors. Widespread and substantial production errors found in the sample below demonstrate that many emerging market producers simply do not follow GMP.

For example, China reputedly produces many, perhaps most, of the world's fake drugs[4], and allows sloppy production which has killed an indeterminate number of people[5]. It is not surprising, then, that approximately 5% of its legitimate products had significant quality problems. These oversight problems are dangerous not only to Chinese consumers, but to patients around the globe. Most of the world now purchases chemical inputs, including active pharmaceutical ingredients (API) from China; such slip ups and poor oversight of GMP means unwary producers, both inside and outside of China, may be receiving suspect API[6].

Our data also suggests that the problem is worse in emerging market companies targeting their home market. Domestic products failed quality tests more often than their internationally traded counterparts. We conclude that low quality standards and lack of GMP enforcement needs to be addressed by companies and governments in the developing world-but protection of local industries is a nontrivial problem, and one I suspect means substandard drugs will be hard to address.

As a result, donors must not just undertake one off product surveillance, but must ensure continuous and random post marketing surveillance of the products they buy-since some companies have shown themselves to be able to produce a good product, but not consistently deliver that high quality product to the market.

Roger Bate is the Legatum Fellow in Global Prosperity at AEI


1. Roger Bate, L Mooney and K Hess. "Medicine Registration and Medicine Quality: A Preliminary Analysis of Key Cities in Emerging Markets." Research and Reports in Tropical Medicine. 2010:1, 89-93 (Dec 2010). DOI: 10.2147/RRTM.S15199

2. Roger Bate, J Milligan and L Mooney, "The Danger of Substandard Drugs in Emerging Markets: An Assessment of Basic Product Quality" Pharmacologia 3 (2012): 46–51

3. Bate et. al. "A Safe Medicine Chest for the World." International Policy Network (May 18 2010), available at

4. "China’s Counterfeit Medicine Trade is booming." Canadian Medical Association Journal, (Nov 10 2009) 181, 10, available at

5. One example is the fatal melamine contamination of milk, see "Chinese Milk Scam Duo Face Death," available at

6. Office of the U.S. Trade Representative (USTR), "Special 301 Report," (2007) Available at: Accessed 15 August 2010

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About the Author


  • Roger Bate is an economist who researches international health policy, with a particular focus on tropical disease and substandard and counterfeit medicines. He also writes on general development policy in Asia and Africa. He writes regularly for AEI's Health Policy Outlook.
  • Phone: 202-828-6029
  • Assistant Info

    Name: Katherine Earle
    Phone: (202) 862-5872

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