Tag Archives: Margaret

Is The Core Purpose of Pharma Business Much Beyond Profit Making?

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Dr. Margaret Chan, the Director General of the World Health Organization (WHO), at a briefing to discuss the Ebola outbreak in West Africa at the UN Foundation in Washington on September 3, 2014 said:

“Big Pharma’s greed for profits, not lack of funding, delaying Ebola treatment development.”

Highlighting that the disease has already taken lives of 4,951 people in West Africa, Dr. Chan castigated the pharmaceutical industry for failing to develop an effective treatment for the deadly virus Ebola since 1976. “Though the Ebola crisis has become the most severe acute public health emergency seen in modern times, a profit-driven industry does not invest in products for markets that cannot pay”, Dr. Chan added.

That said, the Big Pharma has now initiated some efforts in this area, as the disease currently poses a significant threat to non-African countries, including America.

The sentiment reverberates:

Echoing similar sentiment, an article published in the BBC News on November 7, 2014 reiterated:

“Big pharma companies are in the business to make money, so will generally develop those drugs that offer the greatest potential for profit. This means a number of important drugs are neglected – the current Ebola crisis being a case in point.”

The profit oriented approach isn’t restricted just to the diseases of Africa:

The above article also points out that, besides diseases of the developing world, the Big Pharma has been slow to develop newer and multi-drug resistant antibiotics, as well.

This is mainly because, it is lot more difficult for the pharma companies to make huge quantum of profit from discovery of newer antibiotics for acute infections having limited use for around 7 to 10 days, as compared to the medicines for chronic illnesses that people will have to necessarily take every day, for life.

It appears today that the ongoing public opinion and pressure are possibly not adequate enough to trigger even a slightest change in the fetish for profit-making incentives of the Big Pharma companies.

Despite high profitability, the fetish for even more profit continues:

The pharma industry that basically exists to help saving lives of patients of all types, status and color in various ways, now seems to focus mostly on generation of more and more profit than ever before.

- The following table would vindicate the point of profitability of the industry:

Highest and Lowest Profit Margins of 5 key Industrial Sectors, 2013                        (Profit Margin in %)

No.

Sectors

Highest

Lowest

1.

Pharmaceuticals

42

10

2.

Banks

29

5

3.

Carmakers

10

3

4.

Oil & Gas

24

2

5.

Media

18

6

NB: Highest and lowest margins achieved by individual company                             (Source: Forbes, BBC News)

To generate mind boggling profits, many of the Big Pharma constituents have reportedly resorted to various types of gross misconduct and malpractices too, the Chinese saga being the tip of the iceberg.

- The following are some recent examples to help fathom the enormity of the problem:

  • In September 2014, GlaxoSmithKline was reportedly fined US $490m by China for bribery.
  • In March 2014, the antitrust regulator of Italy reportedly fined two Swiss drug majors, Novartis and Roche 182.5 million euros (U$ 251 million) for allegedly blocking distribution of Roche’s Avastin cancer drug in favor of a more expensive drug Lucentis that the two companies market jointly for an eye disorder.
  • Just before this, in the same month of March 2014, it was reported that a German court had fined 28 million euro (US$ 39 million) to the French pharma major Sanofi and convicted two of its former employees on bribery charges.
  • In November 2013, Teva Pharmaceutical reportedly said that an internal investigation turned up suspect practices in countries ranging from Latin America to Russia.
  • In May 2013, Sanofi was reportedly fined US$ 52.8 Million by the French competition regulator for trying to limit sales of generic versions of the company’s Plavix.
  • In August 2012, Pfizer Inc. was reportedly fined US$ 60.2 million by the US Securities and Exchange Commission to settle a federal investigation on alleged bribing of overseas doctors and other health officials to prescribe medicines.
  • In April 2012, a judge in Arkansas, US, reportedly fined Johnson & Johnson and a subsidiary more than US$1.2 billion after a jury found that the companies had minimized or concealed the dangers associated with an antipsychotic drug.

Many more of such instances are regularly being reported by the international media, unabated.

More profit through high drug pricing – The key argument in favor:

The Big Pharma argues that high drug pricing is absolutely necessary to generate a kind of profit, that is essential to fund heavy investments for drug innovation to meet the unmet needs of patients. Moreover, only 3 out of 10 drugs launched are profitable, on an average.

This argument really goes over the top. It does not hold much water either, as the Big Pharma reportedly spends more on the process of drug marketing than on innovation (R&D) of new drugs.

The following table would paint a different picture altogether, marketing expenditure being far more than the R&D costs: 

R&D and Marketing Spend of World’s largest Pharmaceutical Companies

Company Total Revenue (US$ Bn.) R&D Spend  (US$ Bn.) Marketing Spend (US$ Bn.) Profit (US$ Bn.) Profit Margin (%)
J & J (US) 71.3 8.2 17.5 13.8 19
Novartis (Swiss) 58.8 9.9 14.6 9.2 16
Pfizer (US) 51.6 6.6 11.4 22.0 43
Roche (Swiss) 50.3 9.3 9.0 12.0 24
Sanofi (France) 44.4 6.3 9.1 8.5 11
Merck (US) 44.0 7.5 9.5 4.4 10
GSK (UK) 41.4 5.3 9.9 8.5 21
AstraZeneca(UK) 25.7 4.3 7.3 2.6 10
Eli Lilly (US) 23.1 5.5 5.7 4.7 20
AbbVie (US) 18.8 2.9 4.3 4.1 22

(Source: GlobalData, BBC News)

Thus, it is difficult to fathom why are numbers of drugs, such as, Sovaldi and others costing as much as US $ 84,000 and above for a treatment course, when the cost of manufacturing is no more than an insignificant fraction of that treatment cost?

Considering all these and looking at the published profit and loss accounts of various pharma companies, it appears that, the line between ‘making reasonable profit’ and ‘profiteering’ is getting increasingly blurred in the pharma world.

Why is the marketing cost so high?

Since about the last decade and half, despite reasonably high expenditure on R&D there does not seem to have been many reports on breakthrough innovations. According to an expert of the World Health Organization (WHO), “of the 20 or 30 new drugs brought to the market each year, typically 3 are genuinely new, with the rest offering only marginal benefits.”

In a situation like this, when the challenge mostly is of generating targeted revenues with the new products of ‘me-too values’ rather than with those having intrinsic ‘unmet values’, marketing costs to generate doctors’ prescription would obviously escalate disproportionately. Even the process followed to generate these prescriptions, often cross the red line of regulatory, ethics and compliance standards, as have been cited above.

The following questions come up consequently:

- Are these exorbitant avoidable marketing expenditures adding any tangible or intangible values to the ultimate consumers – the patients?

- If not, why burden the patients with these unnecessary costs?

India is no different against similar parameters:

Back home in India, the deep anguish of the stakeholders over similar issues is now being increasingly reverberated with every passing day, as it were. It has also drawn the attention of the patients’ groups, NGOs, media, Government and even the Parliament.

The quality of the pharmaceutical sales and marketing process in India has touched a new low and continues to go south, causing suffering to a large number of patients. Well documented unethical drug promotion is increasingly becoming an emerging threat to the society.

Even today, the Ministry of Health and the Department of Pharmaceuticals of the Government of India provide few checks and balances on unethical drug promotion in India and prefer to keep the eyes meant for vigilance, closely shut.

Despite deplorable inaction of the government on the subject and frequent reporting by Indian media, the national debate on this issue is yet to attain a critical mass. A related Public Interest Litigation (PIL) is now pending before the Supreme Court for hearing, hopefully in the near future. Its judicial verdict is expected to usher in a breath of fresh air around a rather stifling environment for healthcare in India.

I deliberated on a similar issue in one of my earlier blog posts of September 1, 2014, titled, “Pharma And Healthcare: Mounting Trust deficit In Post Halcyon Days”

Conclusion:

While it is well-acknowledged that pharma industry has contributed immensely for the development of a large number of life saving new drugs to save precious lives all over the globe, none can also deny that for such efforts the companies concerned have not been hugely profited either…and, as we have been witnessing, not necessarily through legitimate means, always.

That said, in the backdrop of all the above examples, the core issue that emerges today as raised by many, including the World Health Organization (WHO), is the growing inherent conflict between predominantly the profit driven business goals of the pharma players and the public health interest of a nation.

Considering a number of recent serious public outbursts of the global thought leaders and also from the international media on the ‘profit dominating goals’ of the pharma industry, in general, the following questions need to be addressed with all seriousness:

- Is there a need to define afresh the core purpose of pharmaceutical business for all?

- Does the core purpose go much beyond profit making?

- If so, how would the industry plan to engage the stakeholders for its credible public demonstration?

Meanwhile, taking a serious note of it and learning from the past examples, India should initiate experts’ debate on the subject soon, to effectively resolve the conflict of two different mindsets, not resting on the same page in many ways.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

Drugs From The Same Indian Plant: Safe For Europe, Unsafe For America, Why?

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Good number of stories on US-FDA banning several drug manufacturing facilities of major domestic players of India over serious quality related issues, have been doing the rounds since about a year and almost at a regular interval.

The quagmire has snowballed into serious apprehensions on the quality of Indian generic drugs, across the globe. Various statements of US-FDA Commissioner Margaret Hamburg, during her much talked about maiden visit to India, in February 2014, added further credence to the issue.

“If you want our market, meet our standards”:

During Hamburg’s India visit, her reported candid warning to the Indian drug exporters to America added further fuel to the above concern in India. She clearly underscored:

“If you want our market, meet our standards.”

Even in the face of this stern warning, when major drug manufacturers of India, such as, Ranbaxy, Wockhardt, Sun Pharma and some others continued to fail in meeting US-FDA drug quality standards in their respective plants, I wrote the following in one of my earlier blog posts titled, “Does India Believe in Two Different Drug Quality Standards?”:

“In a situation like this, especially when many Indian manufacturers are repeatedly failing to meet the American quality standards, the following questions come up:

  • Is the US-FDA manufacturing requirement too troublesome, if not oppressive?
  • If not, do the Indian and other patients too deserve to have drugs conforming to the same quality standards?

Answers to these questions are absolutely vital to convince ourselves, why should Indian patients have access to drugs of lower quality standards than Americans, with consequential increase in their health risks?”

The first question on ‘troublesomeness’ now partly answered?

This is because another recent media report brought to the fore that, having completed their assessment of drug manufacturing violations at Ranbaxy’s facility in Toansa, European regulators have said although deficiencies were found, they pose no risk to public health. The regulators said they were satisfied by corrective measures put in place by the company after U.S. regulators found deviations in January.

The report also highlights that this assessment of the European regulators stands in stark contrast to the response of US regulators to the deficiencies found at the same plant.

It is worth noting that US-FDA continues to restrict Ranbaxy from making and selling pharmaceutical ingredients from the Toansa facility “to prevent substandard quality products from reaching US consumers.”

The same plant meets drug safety standards of Europe, but ‘unsafe’ for America!

Quite contrary to the above stern statement of US-FDA, according to the above report from Reuters, European drug regulators commented as follows:

“The inspection team concluded that there was no evidence that any medicines on the EU market that have an active pharmaceutical ingredient manufactured in Toansa were of unacceptable quality or presented a risk to the health of patients taking them.” 

The further added, “This conclusion was supported by tests of samples of these medicines, all of which met the correct quality specifications.”

Regulatory audit standards were the same for both EU and US regulators:

It is also interesting to note from the report that according to a statement from the US-FDA:

“EMA and FDA inspected the Toansa facility using similar quality standards and underlying principles of current good manufacturing practices.”

Was the decision of US-FDA ‘import ban’ subjective?

This critical question arises because of another US-FDA statement that states as follows:

“While inspections were similar, the two regulatory authorities applied their own, differing, regulatory and legal standards to address the violations.”

Subjectivity in decision-making could encourage “Conspiracy Theory”:

Generic drugs currently contribute over 80 percent of prescriptions written in the US. Around 40 percent of prescriptions and Over The Counter (OTC) drugs that are now sold in the United States come from India. Almost all of these are cheaper generic versions of patent expired drugs. Total annual drug export of India, currently at around US$ 15 billion, is more than the domestic turnover of the pharma industry. Hence, India’s commercial stake in this area is indeed mind-boggling.

In a situation like this, the apprehension of subjectivity in the decision making process of US-FDA related to ‘import bans’, if linked with, say for example, even the missed opportunities for ‘first to launch’ generic versions of several patent-expired blockbuster drugs in the United States by Ranbaxy, could lead to much undesirable ‘Conspiracy Theory’, further souring the relationship between India and America.

As I mentioned in one of my earlier blog posts titled “Loss of Ranbaxy Gain of Big Pharma…And Intriguing Coincidences”, when the emerging dots associated with the missed opportunities for ‘first to launch’ generic versions of drugs like, Lipitor (Pfizer), Diovan (Novartis) and Nexium (AstraZeneca) are connected, an uncomfortable pattern could emerge favoring Big Pharma and obviously adversely affecting Indian companies like Ranbaxy.

The First Dot: Uncertainty over Lipitor generic launch:

Like many other large Indian players, ‘first to launch’ strategy with the new generic drugs has been the key focus of Ranbaxy since long, much before its serious trouble with the US-FDA begun in 2008. ‘Import Bans’ on two of its manufacturing facilities by the US regulator in that year created huge uncertainty in its launch of a generic version of Pfizer’s anti-lipid blockbuster drug Lipitor in 2011. On time launch of a generic version of Lipitor was estimated to have generated a turnover of around US$ 600 million for Ranbaxy in the first six months and commensurate loss to Pfizer for the generic entry.

Despite its neck deep trouble with the US-FDA at that time, Ranbaxy ultimately did somehow manage to launch generic Lipitor, after partnering with Teva Pharmaceutical of Israel.

The Second Dot: Indefinite delay in Diovan generic launch:

Lipitor story was just the beginning of Ranbaxy’s trouble of not being able to translate its ‘first to launch’ advantage of patent-expired blockbuster drugs into commercial success, thus allowing the Big Pharma constituents to enjoy market monopoly with their respective blockbuster drugs even after patent expiry.

Despite Ranbaxy holding the exclusive rights to market the first generic valsartan (Diovan of Novartis and Actos of Takeda) for 180 days, much to its dismay, even after valsartan patent expiry in September 2012, a generic version of the blockbuster antihypertensive is yet to see the light of the day. However, Mylan Inc. has, now launched a generic combination formulation of valsartan with hydrochlorothiazide.

US-FDA drug ‘Import Ban’ from the concerned manufacturing facility of Ranbaxy gave rise to this hurdle favoring the Big Pharma, as discussed above.

As a result, Novartis in July 2013 reportedly raised its guidance announcing that the company now expects full-year sales to grow at a low single-digit rate, where it had earlier predicted net sales to turn up flat. It also guided for core earnings to decline in the low single digits, revising guidance for a mid-single-digit drop.

The Third Dot: Delay in Nexium generic launch:

Ranbaxy had earlier created for itself yet another opportunity to become the first to launch a generic version of the blockbuster anti-peptic ulcerant drug of AstraZeneca – Nexium in the United States, as the drug went off patent on May 27, 2014. However, due to recent US-FDA import ban from its Toansa plant, this opportunity too seems to be fading away for Ranbaxy.

Delay in the launch of generic Nexium, which incidentally is the second-biggest seller of AstraZeneca, would make a big impact on the predator-chased company’s profit.

With the global sales of Nexium at US$ 3.87 billion and US sales at US$ 2.12 billion in 2013, retaining its monopoly status in the all-important US market beyond the end of May would not only limit a forecast decline in AstraZeneca’s 2014 earnings, but would also protect bonuses for top management of the British pharma giant, as the above report says.

Conclusion:

Let me hasten to add yet again, while highlighting the stark differences of interpretations on drug quality standards of the same plant between the European and American regulators and connecting the dots of significant missed opportunities of the Indian drug manufacturers, I do not intend to postulate any ‘Machiavellian Hypothesis’.

I just wanted to establish that both alleged ‘subjective’ decision making process of the US-FDA and coincidences of a series of missed opportunities encountered by the Indian drug manufacturers related to first to launch generics in America are now realities, which if remain unaddressed could germinate into a ‘Conspiracy Theory’, at least in some corners. This could further sour existing Indo-US relationship.

While, I am confident that the new government of India with its, so far, well demonstrated ‘Can Do’ spirit would take these critical issues up in the ensuing bilateral ministerial level meetings, an immediate and in-depth study should also be initiated with valuable inputs from the independent experts to ferret out the real reasons behind these facts, including:

  • Why are the cGMP related issues in India repeatedly arising mainly with the US-FDA?
  • Are  the requirements of the US-FDA though too onerous for the Indian drug manufacturers, yet reasonable as per global norms?
  • If so, how come the drugs manufactured in the same Indian plant though declared unsafe by the US-FDA, considered safe by the European regulators?

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

 

 

Does India Believe in Two Different Drug Quality standards?

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“Maintain and sharpen your intellectual honesty so that you’re always realistic. See things as they are, not way you want them to be.”

The above profound statement is what the Management Guru Ram Charan made in his book titled, ‘Execution: The Discipline of Getting Things Done’ co-authored by Larry Bossidy.

Placing the content of this book against current series of events plaguing the Indian pharmaceutical industry, a pertinent question floats at the top of mind. Are these books meant to hone the corporate leadership practices at all level or for preserving in the bookshelves, just as another collector’s item?

This is probably a good question to deliberate upon. Otherwise, why do we keep on encountering barrage of newspaper reports on rampant fraudulent practices within the pharmaceutical industry, especially related to quality of drugs and pricing?

Today’s flavor of ongoing practices:

Just to give a flavor of ongoing practices, following are what appeared in today’s newspaper headlines, besides umpteen numbers of instances reported in the past:

  • “USFDA says team threatened during Wockhardt inspection”
  • Or “FDA caution on Wockhardt US unit”
  • Or even “GSK Consumer fined for overcharging” Crocin Advance tablets

All these similar and unabating instances of “short changing” the systems by the business leadership, vindicate the point that much sought after management Pandits’ precious wisdom to corporate honchos seems to be falling in deaf ears, as a sizable section of the Indian pharmaceutical industry apparently sacrificing the “Intellectual Honesty” in the alter of greed and quick profit making.

“Medicine is for people, not for the profits” – George Merck:

To exemplify “Intellectual Honesty” in the above book, Ram Charan and Larry Bossidy deliberated on ‘The 10 Greatest CEOs Ever’. One of these 10 greatest CEO is George Merck of the global pharmaceutical giant Merck & Co, who articulated his vision for his Company way back in 1952 as follows:

“Medicine is for people, not for the profits.” 

George Merck believed that the purpose of a corporation is to do something useful, and to do it well, which also ensures decent profits.

Some say, those were the good old days of ethics and values. Things do not seem to be quite the same in today’s India, for various reasons. ‘Walking the Talk’ clutching the ethics and values close to one’s heart, is glaringly missing in a large section of pharma leadership of date.

Currently, all indications confirm that the market would keep growing at a decent pace, despite all odds, as we move on. To achieve sustainable success in the rapidly changing business environment, especially in the healthcare space, globally accepted quality standards of products and services, delivered in a credible and equitable way with built in scalability, would matter the most

Does India believe in two different drug manufacturing quality standards?

Not withstanding the possible opportunities galore, as stated above, the spate of ‘Warning Letters’ from the US-FDA have brought to the fore existence of two different quality standards for drug manufacturing in India:

  • High quality plants dedicated to serving the largest market of the world – the United States and following the US-FDA regulations.
  • Other plants, with much less regulations, to cater to the needs of the Indian population and other developing non-regulated markets.

In a situation like this, especially when many Indian manufacturers are repeatedly failing to meet the American quality standards, the following questions come up:

  • Is the US-FDA manufacturing requirement too troublesome, if not oppressive?
  • If not, do the Indian and other patients too deserve to have drugs conforming to the same quality standards?

Answers to these questions are absolutely vital to convince ourselves, why should Indian patients have access to drugs of lower quality standards than Americans, with consequential increase in their health risks?

Different strokes for different folks:

To immediately alleviate the business risk of Indian exporters through resumption of business with those banned drugs in the United States, the only immediate solution is to ensure strict conformance to US-FDA regulations by enhancing organizational ethics and value systems to the desired level of acceptance of the US regulator, as most of these were identified as fraudulent practices and alleged ‘threats’, as reported above.

However, for getting answer to the question of dual drug manufacturing quality standards in India, Indian Ministry of Health has already made the public understanding on the subject even more complicated.

This is due to conflicting acts of two responsible officials in the Ministry of Health of India on the same issue, as follows:

  • On February 10, 2014, Dr. Keshav Desiraju, the then Secretary of Health signed a “Statement of Intent” with Dr. Margaret A. Hamburg, Commissioner of US-FDA to encourage collaboration between American and Indian regulators to effectively address this issue.
  • The very next day, on February 11, 2014, the Drug Controller General of India, while addressing the media expressed his great apprehension against over regulation of the US regulator.

It is, therefore, amazing to note the above different strokes for different folks by the same ministry and on the same very sensitive subject, creating a snowballing effect of confusion within the stakeholders.

Conclusion:

To reap rich harvest out of the emerging gold-plated opportunity, as stated above, not just coming from India, but across the world, Indian pharma does need a strong leadership with unflinching belief in business practices weaved in corporate ethics and values.

Even to come out of the episodes of repeated ‘Warning Letters’ from US-FDA, casting aspersions on the quality of Indian drug manufacturing standards, which are mainly related to alleged fraudulent business practices, strong corporate leadership with high ethics and value standards at all level is of absolute necessity.

Equally important is to follow the visionary statement of the pharma iconoclast George Merck, made way back in 1952 that “Medicine is for people, not for the profits”.

Moving towards this direction, would the newly formed Ministry of Health clarify expeditiously, without any ambiguity and with intellectual honesty that Indian patients are taking as safe and effective medicines as their counterparts, living in any other corner of the developed world, including the United States?

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Threats to Indian Generics: Failing in US Inspections is Just Half The Story

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At a recent event of the American Enterprise Institute, Dr. Harry Lever, a senior cardiologist at the Cleveland Clinic in Ohio, reportedly expressed his concern based on his personal experience regarding inconsistent quality among Indian generics. As a result, he requires switching patients off them, almost routinely, for desired therapeutic effects.

Many reasons may be attributed to such medical concerns on Indian generics in the United States, however limited those may be, the core issue can nevertheless be wished away.

Back home in India, many doctors reportedly have also expressed similar apprehensions on the quality of many generic formulations produced by over 10,000 pharmaceutical manufacturers in the country.

US-FDA on its part has taken action to protect health safety of the patients in the United States through import bans of drugs manufactured in all those facilities, which failed to meet its cGMP standards during inspection.

Not an old story:

Not so long ago, just in 2013, quality related concerns with generic drugs exported by India came to the fore after Ranbaxy reportedly pleaded guilty and paid a hefty fine of US$ 500 million for falsifying clinical data and distributing ‘adulterated medicines’ in the United States.

Thereafter, US-FDA banned drug imports from Ranbaxy and Wockhardt, manufactured in all those facilities that failed to conform to its cGMP quality standards.

Those are the stories for generic formulations. Most recently, following yet another ‘import ban’ and this time for Active Pharmaceutical Ingredients (API) manufactured at its Toansa plant, Ranbaxy has suspended all shipments of APIs pending review. With this step, Ranbaxy would virtually have no access to the top pharmaceutical market of the world.

A not very responsible remark either:

Unfortunately, in the midst of such a scenario, instead of taking transparent and stringent measures, the Drug Controller General of India (DCGI) was quoted as saying, “We don’t recognize and are not bound by what the US is doing and is inspecting. The FDA may regulate its country, but it can’t regulate India on how India has to behave or how to deliver.”

The DCGI made this comment as the US-FDA Commissioner Margaret Hamburg was wrapping up her over a weeklong maiden trip to India in the wake of a number of ‘Import Bans’ arising out of repeated cGMP violations by some large domestic generic drug manufacturers. Whereas, Hamburg reiterated the need for the domestic drug makers of India to make sure that that the medicines they export are safe for patients, the DCGI’s above comment appears rather arrogant and out of tune, to say the least.

Just recently, on the above comments of the DCGI, the American Enterprise Institute reportedly commented, “Indian drug regulator is seen as corrupt and colliding with pharma companies…”

Failing in US-FDA inspection is just half of the story:

Around 40 percent of prescriptions and Over The Counter (OTC) drugs that are now sold in the United States come from India. All most all of these are cheaper generic versions of patent expired drugs. Total annual drug export of India, currently at around US$ 15 billion, is more than the domestic turnover of the pharma industry. Hence, India’s commercial stake in this area is indeed mind-boggling.

It is now well known, if such ‘Import Bans’ continue or grow due to shoddy compliance of required cGMP standards, there could be a serious challenges for the Indian drug exporters to salvage their reputation on drug quality for a long time to come. Consequently, this will offer a crippling blow not just to their respective organizational business outlook, but also to future drug exports of India. It is worth mentioning that drugs and pharmaceuticals are currently a net foreign exchange earner for the country.

The other half of the story:

Threats related to export of Indian generic drugs on quality parameters, as flagged by the US-FDA in India, is just half the story. The other half of the story begins in the US, instead of in India, and is related to stringent new measures taken by the same regulator in its own land to have a check on the quality of imported generic drugs consumed by the patients in America.

A recent report highlights that around twelve academic centers of the United States are now involved in the firstever widespread safety and quality evaluation of generic drugs. This program is run by the US-FDA and would continue through 2017.

This initiative has been prompted by the fact that generic drugs currently contribute over 80 percent of prescriptions written in the US. In 2014, the said program will reportedly focus on cardiovascular drugs, ADHD treatments, immune-suppressants, anti-seizure medicines, and antidepressants. The grand plan is highlighted to project the priority emphasis of the US-FDA on the quality of generic drugs, especially after it banned medicine import from four India-based facilities over a period of last nine months.

Some Examples:

- A widespread testing program of USFDA followed its 2012 finding that generic copies of antidepressant medication Wellbutrin XL did not work as good as the original. This study eventually led the largest generic drug player of the world -Teva to withdraw its generic version from the market in 2012.

- According to the report, US-FDA is now reviewing a 2013 study done by a Boston-based researcher that found widespread impurities in the generic version of Pfizer’s anti- cholesterol drug Lipitor manufactured outside of the US. The research reportedly found that some generic versions of Lipitor produced overseas were rendered ineffective as a result of manufacturing impurities. However, US-FDA action on the same is not known, as yet.

Thus, the other half of the story unfolds the reality that, even if any exporter escapes USFDA inspection in India, there is a fair chance now that the generic formulations could be tested in the US itself under the above program and if found wanting in quality parameters, concerned generic formulation could face a ban in the United States.

Conclusion:

There is nothing like tightening all loose knots in the required cGMP process for all drugs manufactured in India, without bothering much about their testing in the US. If the drug quality consciousness becomes robust in the shop floor, well before the products leave the shores of India, there is no reason why the country would face similar embarrassing incidents in future, along with a strong global furore.

The US-FDA Commissioner’s recent calling on the DCGI to join hands with the US to enforce more rigorous oversight of drug manufacturing facilities, needs to be followed up with due earnest, the above avoidable comment of the DCGI not withstanding.

The Commissioner reportedly reiterated that the US would increase the number of FDA inspectors in India from 11 to 19 as it intensifies inspections of drug manufacturing plants, simultaneously with arranging cGMP compliance related workshops for the drug exporters. The DCGI also made an announcement that India intends to increase its inspectors from 1,500 to 5,000 over the next five years.

A deepening economic spat over cheaper generic drugs, not withstanding, all these good intents to maintain a robust drug quality standard need to be translated into reality.

Trying to find ghosts nurturing dubious intentions against India, especially in areas pertaining to drug quality standards, may not augur well for the patients at large, not just of the United Stated, but for our own homeland too.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.