 "Malignant growth")
The message in the three developments is not hard to decipher: the entire drug chain in the country has serious problems that need urgent plumbing. Clinical trials, manufacturing, prescription and retail - malpractices abound at every stage. At stake, apart from the fortune of hundreds of businessmen and jobs of a whole army of scientists and salesmen, is the reputation of India as the supplier of inexpensive medicine to the world. Forty per cent of the generic drugs and over-the-counter medicine (which can be sold without a doctor's prescription) and 10 per cent of finished dosages sold in the United States come from India. The industry earned Rs 72,000 crore last year, almost 45 per cent of that in exports.
But, as of today, it faces a serious crisis of confidence.
Indian companies, almost all of whom make generic medicine (off-patent drugs), may cry themselves hoarse that this is just a Big Pharma (as multinational patent-holding drug makers are called collectively by activists) conspiracy against low-cost producers, but the lapses that have come to light tell a different story - one of disdain for best practices and apathy to patients, one of cutting corners to make a quick buck.
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The problem starts at the development stage. India, considered for long an inexpensive destination for human clinical trials, lacks adequate laws to regulate these experiments conducted on vulnerable patients who often do not even properly know the disease they are suffering from. Instead, the law regulating clinical trials seems to allow the trial sponsors to get away without even a rap on the knuckles in case of death or adverse effects. According to the health and family welfare ministry, there were 2,868 deaths in clinical trials during 2005-2012; however, merely 89 of these were accepted as trial-related and 82 were compensated. Last year, 436 people died during clinical trials but only 16 of these deaths have been attributed directly to the trials. Compensation has been paid in only two of these cases: while Novartis gave Rs 2.5 lakh in one case, Sun Pharma made an interim payment of Rs 50,000 in the other.
Experts and health activists say these numbers underestimate the ground reality because many deaths often remain unreported, and those which are reported can be blamed on extraneous factors. Moreover, the government depends fully on hospitals to collect the data; activists allege that the hospitals, which collaborate with companies for clinical trials, have a vested interest in under-reporting the numbers. Unethical clinical trials conducted by various companies and the government's failure to keep a check have led to judicial intervention into the sensitive matter. On January 3, after allegations of irregularity in the approval process came up, the Supreme Court banned clinical trials for all new chemical entities unless they were personally vetted and cleared by the Union health secretary. Last week, after the government admitted that only five of the 162 approvals granted since then had been vetted by the health secretary, the Supreme Court asked the ministry to reexamine the other 157 approvals by December 16.
There are other things wrong as well with clinical trials. Some time back, a report of the Parliamentary Committee on Health and Family Welfare had found that expert opinions necessary for drug approvals were ghost-written by the companies that had sought the approvals. Reports sent in by different experts on the same drug were found to be exact copies of each other, with the same errors! The committee also found that pharmaceutical companies were carrying out clinical trials of new drugs in Tier II and Tier III towns. It is an open secret that these companies prefer to go to small towns because it is cheaper to carry out clinical trials there. Also, awareness levels are lower there.
Following the apex court's intervention in the matter, the Drugs Controller General of India and the ministry of health and family welfare have come up with draft guidelines to register all clinical trials conducted in the country, to monitor them and to report adverse effects and deaths. Guidelines are being framed to empower the ethics committee of the hospital involved to determine the compensation for victims of clinical trials. However, health activists question the sanctity of the ethics committee itself. "Many of these ethics committees are not functioning ethically themselves, then how can they recommend compensation?" questions Mira Shiva of All India Drugs Action Network which moved the courts on the issue.
The cost of any delay in sorting out the mess could be significant on business. Frost & Sullivan has estimated that the Indian clinical trial industry was worth $450 million in 2010-11, is growing at 12 per cent annually and will cross the $1-billion mark in 2016. "There is certainly an impact on the business because normal work has suffered and the Indian industry is losing opportunity," says Suneela Thatte, president of the Indian Society of Clinical Research. According to Thatte, the timeline of approvals and other procedures has become unpredictable because of the ongoing litigation. "Globally, one has to make a proper plan with estimated timelines et cetera to conduct clinical trials, but because of regulatory uncertainties, planning has become so much more difficult (in India)."
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Since 2012, as global regulators started tightening their vigilance, many Indian drug makers including Ranbaxy, Wockhardt, RPG Life Sciences and Strides Arcolab have been accused of substandard manufacturing practices. Some have even been charged of contamination in products. The lid got blown off this deep-rooted malaise in May when Ranbaxy admitted that it had falsified data while seeking approval to launch its drugs in the United States and paid a penalty of $500 million to close the case.
Inspections carried out by the United States Food and Drug Administration (US FDA) showed that some Indian plants didn't even have adequate written instructions for employees or proper drainage systems! For instance, one of the latest inspections of Ranbaxy's Mohali facility revealed that the toilet "did not have running water for hand washing and toilet flushing". The US FDA authorities also found contamination in the form of some black fibre suspected to be hair from an employee's arm and black spots on tablets which could be machine oil. Last week, when I visited Mohali, the company turned down my request to see the facility from inside.
In March this year, US FDA inspectors visiting a Wockhardt factory found torn files in a waste heap and urinals that emptied into an open drain in a bathroom six meters from the entrance to a sterile manufacturing area. And on inquiry by an inspector about the contents of unlabelled vials in the laboratory's glassware washing area, a worker dumped them down a sink and said the contents could not be determined, according to a July 18 letter from the regulator to the company.
Data shows that so far in 2013, as many as 19 Indian drug manufacturing facilities have been barred from supplying to the US, against no import alerts in 2010, two each in 2009 and 2012, and seven in 2011. While many argue the trend is not unique to India, data shows that enforcements are fewer in other countries. For instance, China, has received only seven import alerts so far during 2013. Some of the other generic developers such as Australia, Canada and Japan received two each during the same period, while South Africa faced only one import alert. Israel, which is a huge producer of generic medicine, has not received any import alert so far.
Lupin Vice-Chairman Kamal K Sharma says medicine is serious business and companies need to understand this. "I do not think there is any room to play games here." Adds ChrysCapital Managing Director Sanjiv D Kaul, who has worked with various drug makers including Ranbaxy: "The global market for generic drugs is expanding and the competition is also getting tougher. This will obviously trigger changing compliance and stricter quality standards." According to Dr Reddy's Labs Vice-chairman & Managing Director K Satish Reddy, import alerts are often the result of pharmaceutical companies not paying adequate attention to the fact that there has been an increased scrutiny of manufacturing practices by US FDA.
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There are thousands and thousands of drug makers in the country. They cannot advertise prescription products. So how do they sell in this hyper-competitive market? This is where incentives to doctors come in. These can range from stationery to cars, overseas junkets and even taking care of a family wedding. In return, doctors need to prescribe the "right" medicine. The result is over-prescription. Amit Sen Gupta, joint convenor of Jan Swasthya Manch, a coalition of civil society organisations working in the field of healthcare, had told Business Standard last year this is the reason doctors continue to prescribe cough syrups, though "no medical student is taught to prescribe them. Cough syrups are a throwback to the 1960s." Indiscriminate prescription of antibiotics, according to him, has made India a major source of superbugs. When doctors write expensive drugs, patients do not buy the recommended dosage and run the risk of under-medication. Inducements are also offered to pharmacists and chemists; in return, they frequently hand out medicine without a doctor's prescription, or switch one medicine for another. Sandeep Nangia, president of Delhi Retailers and Distributors' Association, insists such incidents happen only in small towns and villages where there are few doctors and no hospitals, and many people do not have the money to pay the doctor's fees.
The bigger crisis at the moment is the standoff between retailers and wholesalers on one side and the drug makers on the other. Ever since the government notified the price caps for the National List of Essential Medicines in May this year, drug makers want to reduce the margin of wholesalers from 10 per cent to 8 per cent and of retailers from 20 per cent to 16 per cent on the grounds that these are the margins the government has assumed while fixing the price caps. But the all-powerful All India Organisation of Chemists and Druggists will have none of it. (There are over 750,000 chemists across the country; most of them are members of this lobby group. Naturally, it wields enormous clout.) It says drug makers, hiding behind the price caps, are trying to fatten themselves at their cost. This prompted the ministry of chemicals and fertilisers to write to various states in September to monitor the situation and ensure that essential medicine is readily available. A reconciliatory meeting called last week by the ministry remained inconclusive.
The rot continues.