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Indian Pharma – A case of regulatory failure?

February 12, 2014 - Posted in Business , Indian Pharmaceutical Industry Posted by:

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Disclaimer: I work for Novartis, an MNC pharmaceutical player. However, the view expressed in the post are my own, and do not reflect those of my employer.

Indian pharmaceutical companies cannot be judged by American standards. – GN Singh, Drug Controller General of India [source]

If you are looking for one reason for the mess that the Indian pharma industry is in, you do not need to look further than the statement above. This is a statement made by the head of the body responsible for ensuring the quality of drugs manufactured and sold in the country.

As any physician will tell you, one of the prime reasons for them prescribing higher priced brand of generic medicines is that the quality of those brands can be trusted. Call them fake, spurious, or poor quality drugs, it is one of the worst kept secrets of the Indian pharma industry. While the US FDA imposes stringent norms on the quality of drugs sold in US, such enforcement of standards is missing in India. The DGCI is severely understaffed and enforcement of manufacturing norms questionable. Manufacturers often get away using approvals from state FDAs which are even more limited than the DGCI in terms of resources for checking the quality of drugs.

For example, there are 200 brands available for  Metformin 500 mg (a common drug for diabetes) and the price of a strip of 10 tablets varies between Rs. 8 to Rs. 80 per tablet, with an average price of Rs. 17. In fact, brands by reputed manufacturers like USV, Abbott, and Glenmark are available for around the average price of Rs 17. Brands by Emcure and Torrent are available at Rs 12. In fact, most manufacturers have multiple brands at different price points. For example, Cipla has a brand at Rs. 7 and another at Rs. 18. Same drug, same composition. [Source: HealthKart Plus]

While theoretically you should be able to switch medicine brands, as long as they have the same composition and formulation, without change in efficacy, it is not true in practice in India. I have personally heard from a number of physicians that the quality of drugs, especially those supplied to the government, is highly questionable and that they often suggest their patients to procure the drugs from open market as those supplied for free at the hospital may not be efficacious. If the DGCI and state FDAs ensures quality, the price variances would come down and the premium charged by major trusted manufacturers decrease making medicines more affordable.

While a lot of people blame big pharma players and MNCs of having hidden interest in raising quality issues, do we not agree that the problem is not just access to medicines, but access to quality medicines.

2 Comments

Nachiket 3 years ago

Nice series, Amit.

So what you’re saying is that manufacturers selling multiple brands at different price points may imply, in most cases, lower quality for drugs. But, isn’t multiple pricing just a strategy to capture markets in the Tier 2 zones? Maybe un-regulated manufacturers take part in such practices but I don’t think that a major, or even a mid-size, manufacturer would go through the hassle of formulating a less efficacious version of their drug for the lower tier markets. It’s easier for them to just re-package and re-brand. Have I missed some news related to this? Please share.

I agree with the regulations part of the article. Just recently, I had a discussion with a friend on spurious drugs supplied to government. He said something similar about spurious drugs supplied to the government. However, I remember him saying that the problem with such drugs is that the government, in spite of approving contracts for bulk manufacturing, doesn’t make sure that the manufacturers adhere to FDA (US or Indian) regulations. And we all know how government contracts get awarded.

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Goyal 3 years ago

Nachiket, that is not what I meant.

Lower quality manufacturers have low priced brands, to compete with which major manufacturers have multiple brands. However, it proves that it is possible for major manufacturers to price good quality generic drugs at a lower cost at a decent/acceptable profit. However, since in the mind of the physicians price becomes an indicator of quality, they prefer to prescribe the higher priced version. If the FDA is able to ensure quality, this price premium, we pay to ensure quality, will be reduced and make medicines more affordable.

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