India's Faulty Medicine and the Risk to Patients

India's Faulty Medicine and the Risk to Patients
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New peer review empirical research, published in the American Journal of Health Economics, finds that at least seven percent of Indian medicines are substandard. My colleagues and I procured 1470 medicines to treat infectious diseases across 22 emerging nation cities. The distribution of failure is not random, some Indian drug companies segment their markets based on quality sending substandard medicines to poorly regulated markets, such as in Africa. As Indian Prime Minister Narendra Modi visits Washington DC next week (June 7th/8th), we hope that Congressional leaders push him to improve oversight of this industry—the largest exporter of generic medicines in the world.

India’s flawed drug industry is not a new phenomenon. Eleven years ago I received an email from an Indian drug company whistleblower telling me how his company, Ranbaxy, was lying to regulators about its drug quality and sending substandard products to those with HIV in Africa. I was doubtful about the provenance of the email, but found out a few years later that the situation at Ranbaxy was actually far worse, covering dozens of products, even those sold into US. Ranbaxy was found guilty in May 2013 by a US court of seven felonies and had to pay $500m in fines and penalties.

While Ranbaxy maybe the worst example, dozens of Indian firms have now been caught lying to the US Food and Drug Administration. Indian generics are the cheapest in the world, but there is increasing concern among doctors that Indian products sometimes do not work. Dr Harry Lever runs the hypertrophic cardiomyopathy group at the Cleveland Clinic in Ohio and perhaps like many physicians he simply tries to avoid Indian medicines. He told me last year: “I simply can’t trust them anymore… I’ve seen many patients who haven’t responded properly to them, and although I’ve complained repeatedly to FDA, they do very little.”

Dinesh Thakur, the Ranbaxy whistleblower, and CEO of Medassure, says that consistency of quality is not a high priority for Indian producers. In fact he claims there are different grades of production within many Indian companies, where the inferior products are sent to poorly regulated environments, and the better sent to richer nations like US. But of course mistakes are made and inferior products occasionally make it to US too.

For the past decade, my research colleagues and I have been sampling medicines from Africa, India and a variety of middle income nations and testing them for quality. Once I heard Mr Thakur’s detailed allegations in 2013 I decided to investigate from within our samplings whether Indian drug manufacturers cut corners and make substandard drugs for markets with non-existent, under-developed or emerging regulatory oversight, notably Africa. Since Indian drugs are the most prevalent around the world it was fairly easy to find within our sample the same types of products made by the same Indian companies sold within India and overseas.

We compiled the data and drafted a paper on the results which was published as a working paper of the prestigious National Bureau of Economic Research in September 2014. That research now updated in AJHE assesses the quality of antibiotic and tuberculosis drug samples in solid oral form (tablet or capsule) that claim to be made in India and were sold in Africa, India, and five mid-income non-African countries. We still find that over seven percent of those products are under-dosed and the distribution of these substandard products is not random: they are more likely to be found as unregistered products in Africa than in India or non-African countries. The most likely explanation is that Indian pharmaceutical firms and their export intermediaries are indeed differentiating drug quality according to the destination of consumption.

We certainly did not expect Indian producers or the Indian government to be happy about our findings, but we did not expect that within a few days of publication the Indian Commerce Ministry demanded that we be sued for criminal defamation. While they have no case, the threats demonstrate a facet of the Modi administration. When he was Minister of the state of Gujarat he used criminal defamation to silence his opponents and his administration threatens to follow his example.

Now that the paper has passed rigorous peer review and appears in the summer issue of the AJHE, we hope that it draws attention to the vast but flawed Indian drug industry. Indian generics are cheap and vital to public health; billions of dollars of Indian generics are imported into US every year. But until Prime Minister Modi addresses the underfunded and corrupt federal drug regulator and drug laws that mean most generics can be approved without establishing good quality, flawed products will continue to harm patients the world over.

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