Cheap, Unreliable Generic Drugs

"The numbers here are so large -- in terms of the facilities and types of drugs being made and ingested -- and it's just a drop in the bucket how many are getting inspected."
"And yet you look at the inspections that have occurred now, and you see dozens of warning letters over the last several years for these facilities in India."
Andrew Beato, Washington lawyer

"When we talk about generic substitution, we always talk about cost, not quality. The way that this manifests itself on the other side -- when you do not have proper regulatory oversight -- is that people try to cut corners."
Dinesh Thakur, chemical engineer, former executive Ranbaxy Laboratories

"These guys are not keeping records, are fudging records, are systematically deleting records."
"It [IPCA report] is managing to do things no company should be able to do on the production line."
Amir Attaran, health policy expert, University of Ottawa

Dhiraj Singh/Bloomberg   Health Canada has barred drug imports from Dr. Reddy's plant in India after a U.S. Food and Drug Administration inspection found questionable conditions.

Generic-produced drugs are less expensive variants of drugs having the same properties as those pharmaceuticals whose patent protection has expired, allowing the industry to use the formulae of the original drugs without penalty. They are quite a bit less expensive, and represent a boon to humanitarian groups working in under-developed countries who rely on them to produce the same effects as the patented and more expensive drugs.

They are also much cheaper for health insurance companies and provincial health benefit regulators in Canada and government agencies elsewhere to access, to help keep the steeply rising costs of drugs to manageable levels. But reliance on their effectiveness and sterility when they are sourced in some questionable venues means that their use can be a gamble if the generic manufacturers fail to test the effectiveness of their drugs, and fail to ensure that their manufacture is without contaminants.

Take for example Dr. Reddy's Laboratories Ltd. in India where American inspectors found that the water used to produce ingredients in part of medications produced is free of biological contamination in a country whose unsafe drinking water is notorious. Tests showed that unknown impurities were to be found in some of the drugs produced by the plant. Worse, samples had bacteria and mould whose presence appeared "TNTC": too numerous to count.

It was noted as well that factory workers' washrooms had no hot water, no soap, neither air dryers or single-service towels. After the U.S. Food and Drug Administration inspection results were made known, Health Canada barred imports from this producer. India's pharmaceutical manufacturing is a booming business where generic drugs can be sourced cheaper than the cost of their production elsewhere, however, and this is a lure.

Unfortunately, foreign regulators are discovering questionable manufacturing standards to be the norm in India, as well as manipulated records, and the manufacture of defective drugs. An industry that was once concentrated in Europe and North America, pharmaceuticals have increasingly depended on the developing world for production where lower production costs feed into the thrust for less expensive acquisition of patent-expired products in the West.

Governments and insurers have looked increasingly to achieve lower prices through generic drug production. And those generic drugs become the choice for patient prescriptions. The generic pharmaceutical industry that has developed in India has a value of $15-billion, achieved through labour costs roughly one-tenth of those in the West. The result is that one in 20 of Canada's finished drugs are produced in India.

About ten percent of the factories supplying active ingredients or finished products to Canada come from India, according to Health Canada. Indian facilities have been investigated then charged with sloppy practices including fraud. Leading Health Canada to launch a website listing concerns relating to standards at pharmaceutical factories, and of the new "Inspection Tracker" website focuses, eleven of the 15 plants listed were located in India.

Ten drugs were recalled from the active market due to quality defects in the last five months, and four of those were produced in Indian factories, including lots of antibiotic generics, removed due to fears that the intravenous solution was contaminated with foreign particles. Imports from both Dr. Reddy's Indian plant and another owned by IPCA Laboratories were shut off from entry into Canada by Health Canada. "Data integrity" issues; testing for the presence of active ingredients or impurities cited as the issues.

In 2004, Dinesh Thakur, a former executive with Ranbaxy Laboratories noticed that a generic antibiotic produced by the company he worked for designated for the home market in India did nothing to solve his son's severe ear infection. He switched his son's medication to the brand-name version of the drug and his son's high fever was down to normal overnight. That episode convinced him to reveal his findings.

Amit Bhargava/Bloomberg/Files   A researcher works in a Ranbaxy Laboratories Ltd. lab in Gurgaon, India.

And that led to a half-billion penalty imposed by the American government against Ranbaxy Laboratories in 2013 for selling adulterated drugs, for hiding incriminating data, and for misleading regulators. According to experts the outstanding problem with the Indian industry appears the regulatory system itself. Where the national regulator employs fewer than four hundred people to investigate over 1,300 factories.

State level regulators tasked with overseeing drugs exported abroad have a reputation for corruption. And nor are they trained sufficiently to do their job, even with corruption discounted. An Indian parliamentary committee three years earlier examining the drug-approval process, reached the conclusion that regulators conspired with the companies they governed rather than placing the interests of safe consumer products first.

"If parliament says that about their own regulators, you can imagine how bad things are", Mr. Thakur stated. "If you're only focused on costs, you don't know what the long-term outcomes are. I don't think there's enough science ... to say that mandatory generic substitution is always the right thing."

Scott Eells/Bloomberg   India's chief drug regulator has said he plans to add hundreds more staff and promised greater oversight.