India Improves Efforts to Prevent Fake Drugs

Roger Bate | 01 Mar 2009
Economic Affairs
The Government of India has at last signaled its intention to combat the menace of fake pharmaceuticals. Last October the upper house of the Indian Government passed into law amendments to the Drugs and Cosmetics Act 1940, which create a comprehensive national food and drug authority, replacing the ineffectual structure where responsibility was shared between Centre and States and the villains operated freely in the gaps in between. Penalties for those manufacturing and trading in fake pharmaceuticals have been increased and it is now easier for wrongdoers to be shut down, tried and convicted.

While China has been reeling from contaminated food and counterfeit drug scandals over the past year, India has had its own problems. Its largest drug company, Ranbaxy Laboratories, lost the right to sell drugs into the US because of alleged breaches in manufacturing practices, with the US Government refusing to buy its HIV drugs for the extensive health projects in Africa funded by US taxpayers. The ban imposed by the FDA will be lifted if the company supplies acceptable proof that its production processes are adequate. The whole industry, currently estimated to be worth over $10 billion and annually growing at over 9%, has an unsavory reputation for producing substandard drugs. Data from local experts reported by the World Health Organisation is that perhaps 20% of the total market is substandard, which is much higher than China's 8% estimate--although data in China is scarcer, less accurate and most is controlled by the Government. My own research suggests that roughly 12% of a sample of five essential drugs sold in 26 pharmacies across the capital Delhi are substandard. Other researchers have put the figure in India as high as 35%.

Since 1975, successive government commissions have urgently recommended reforms and have been ignored; now suddenly ministers are falling over each other to enact them. Almost as soon as the Bill was passed, a ceremony was held to inaugurate the actual building of a central food and drug authority, and this was done by the Minister for Overseas Affairs, not the Minister for Health and Family welfare, who has been laboriously steering the Bill through parliament. Several things happening in conjunction may have contributed to this change of heart.

India's participation in the huge clinical trial market has been limited by its lack of international standards and regulation. The FDA ban on Ranbaxy's imports was a serious blow to prestige of all concerned. The WHO has widened the perspective towards the danger of substandard drugs--be they fake or just badly made. The final straw which has driven India's Government to action is the realisation that China has taken a huge hit to its credibility over its various product scandals, and that India's weak regulatory system would have had very little chance of preventing a similar calamity.

The law increases sentencing from a minimum of 5 years to a minimum of 10 years for the guilty. Some in Parliament pushed for the death penalty, fortunately they failed or any prosecutions would have crawled forward, given the understandably longwinded appeal systems when democracies take a life. Even more importantly, given that it is often shadowy businessmen who engage in substandard production, the new law increases fines from 10,000 Rupees (about $320) to a million rupees (about $32,000). This is a good advance, and certainly good for headlines, but the key to preventing the sale of substandard products is better policing and enforcement. If, as has historically been the case, counterfeiters can simply bribe police or prosecutors to allow them to continue to ply their odious trade, then it can be irrelevant how strict the law is in principle. So the less headline grabbing, but more useful parts of the law are increasing police powers to prosecute fakers as well as the formation of an autonomous Central Drug Authority. The CDA would coordinate all regulatory activities, including an expanded national pharmacovigilance (drug quality monitoring) program, which would link medical colleges and hospitals across the country. Whether this new-found political will can overcome the long-standing antagonisms between Centre and State and even among ministries that would be necessary to allow the CDA to function properly, remains to be seen.

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