Time the pharma sector was refurbished

Dinesh C Sharma

Dinesh C Sharma
Journalist and author

Generic drugs manufactured in India are sold in dozens of countries around the globe. America is a major consumer of India-made medicines. A bulk of the supplies of anti-HIV medicines in Africa is from the Indian manufacturers. Indian companies are also among the largest suppliers of tuberculosis drugs. In addition, the country provides many other nations their supplies of life-saving vaccines. This has made India a hub of affordable generic medicines globally, earning it the title of ‘pharmacy of the world.’ By volume, India is among the leading manufacturers of drugs in the world.

India’s formidable position in the generic drug market also attracts criticism from time to time. Inventor drug companies are peeved as the Indian companies make generic versions of their drugs and sell in global markets. The Indian industry is also caught in patent wars and is often a target of multinational lobbies in India and abroad.

A few years back, a book had exposed the toxic pollution being caused by pharmaceutical manufacturing units near Hyderabad. Now, another provocatively titled book, Bottle of Lies, by an American author, Katherine Eban, has created a controversy about the quality of India-made drugs sold in America. The Central government, according to reports, plans to take ‘appropriate action’ to counter the allegations.

India’s journey from being a hub of multinational companies in the 1960s to becoming a global supplier of drugs has been remarkable. Medicines in India then were the costliest in the world and even basic ones, like the antibiotics, were imported. The reason for the situation was an archaic 1911 patent law that permitted product patent.

Following a series of inquiry committees, long parliamentary procedures and intense lobbying, a new patent law was passed in 1970 to replace the product patent with process patent regime. The change meant that Indian companies could make patent drugs using novel processes and sell them in India and elsewhere. This gave birth to the generic drugs industry in the 1970s and brought down the prices tremendously.

The foreign exchange restrictions also made things difficult for the foreign companies and most multinationals exited the Indian market. The new patent law, along with other regulatory measures like the Drug Prices Control Order, ensured affordable drugs for Indians.

Slowly, the Indian companies mastered ‘reverse engineering’ with technical help from the national research laboratories and entered the international markets. The breakthrough came in 1999 when Cipla announced that it was ready to supply a cocktail of anti-HIV drugs for $1 a day per dose. This caused a tremor among the global pharma companies that were selling the dose for $14,000. Even with a change in the patent law in 2005, as part of obligations under global trade agreements, Indian generic manufacturers have maintained their edge.

Katherine Eban’s book is not against generic drugs but has exposed loopholes in the manufacturing practices of the Indian drug companies, notably Ranbaxy. It relies on inspection reports and testimonies from the officials of the US Food and Drug Administration (FDA) to show how the Indian companies have been falsifying data and records to be able to export to the US.

In the process, it has exposed the Indian regulatory system. In fact, the issues flagged in the book are not entirely new. They have been highlighted in the media, parliamentary panels and by whistleblowers like Dinesh Thakur. The most damning was the investigation of the parliamentary standing committee in 2011 and 2012 that went into the functioning of the Central Drugs Standard Control Organisation (CDSCO) and the Drug Controller-General of India. It found major lacunae in the mandate and structure of the regulator, functioning of the state drug regulatory authorities and drug testing labs, processes for new drugs and licensing of fixed dose combinations.

Since then, a few changes have been made, such as increasing the number of posts, and setting up special courts, new norms of inspection etc. The arrest of a deputy drug controller a few weeks back shows that a lot more needs to be done. The person caught for corruption had earlier worked in several pharma companies. This also raises the issue of the need for clear conflict of interest and integrity policies in the regulator.

This means that the problems flagged in the book are valid, though the government and the regulator may not agree with their extent or depth. But the reported response of the government indicates that it is taking it purely as an image issue that needs to be countered. Instead of looking at the problem at hand and recognising it, the approach seems to be that of denial.

This is what had happened when the research paper about NDM-1 superbug named after New Delhi had appeared in 2010. The health ministry and the Indian Council of Medical Research swung into action and denied the research report. Those who wrote the research paper were hounded and scientists speaking about the problem — multidrug resistance — were gagged. All this was done because private corporate hospitals felt that it would hurt India’s image as a destination for medical tourism and, of course, their business. But within a year, ICMR and the health ministry had no option but to form a task force on drug resistance and develop a plan of action.

The issues with drug regulation —those raised in the book or otherwise — are not a mere image problem or one that concerns only the pharma exporters. Every consumer — whether Indian or in countries where Indian drugs are sold — has a right to safe, affordable as well as quality drugs.

And it is the job of the Indian regulator to ensure this. We need a robust, science-based, efficient and transparent drug regulatory regime. It is the duty of the Central government to provide adequate funds and expertise for this task. If the states are not giving their share, the Centre must fund this activity. The industry has a vital role but it should not be allowed to subvert regulation. It is time we stop treating the ‘pharmacy of the world’ as a holy cow.