Gambia cough syrup deaths expose  dirty underbelly of Indian pharma
Representational pic

Gambia cough syrup deaths expose dirty underbelly of Indian pharma

Accounting for 60% of production and 70% of exports in the Indian pharma sector, MSMEs do not abide by norms or have adequate infrastructure; they can easily ‘buy’ the licence and quality certificates

The death of 66 children in the poor African country of Gambia due to substandard cough syrups imported from India has brought under the spotlight the issue of spurious medicines in India. The WHO rightly described the tragedy as a “very serious issue.” It has caused an image problem for India, and more adverse impacts will inevitably follow.

India has come to be tagged as the “Pharmacy of the World.” It is the third major exporter of pharma products globally in terms of volume, accounting for around 20 per cent of global pharmaceutical exports. Export of pharmaceuticals and drugs account for 5.92 per cent of total Indian exports. India exported ₹180,555 crore ($24.35 billion) worth of pharma products in 2021-22. Considering all these, the African tragedy would also inevitably boomerang as a major economic blow to India in the arena of international trade.

Hence, such a gory tragedy should have sent a chill down the spine of the Indian leadership. One would have expected the government to unleash a major crackdown on the manufacturers and exporters of such spurious drugs. But, except for some routine token action against the Haryana firm guilty of exporting such spurious cough syrups, no such major drive seems to be underway.

Multifaceted problem 

The problem of spurious drugs in India is a multifaceted one. On the one hand, there are entirely counterfeit drugs. The wrapper or the container of the medicine would look exactly like that of the original. But inside, the tablets or capsules would be cheap chalk powder or some other cheap base material.

Also read: All you need to know about cough syrups linked to deaths in Gambia

On the other hand, there are also adulterated substandard drugs. The tablet or capsule would contain only 20-30% of the original chemical formulation mentioned and 70-80% would be some other worthless chemical. So, the manufacturer would be able to save the bulk of the input cost, and the drug would have low potency. The manufacturers of such substandard drugs usually bribe some officials in government hospital networks and supply such them in bulk.

And then there are bogus claims by pharma companies about their drugs. We have seen how black-marketeers fleeced patients of lakhs of rupees by selling controversial Remdesivir, which is of doubtful value in treating Covid-19 infection. The Indian market is full of medicines that claim to cure even cancer and HIV.

Quantum of spurious drugs

How serious is the problem of spurious drugs in India? A 2019 report by the United States Trade Representative said 25 per cent of all pharma products sold in India were counterfeit ones. Even if one doesn’t believe a US official, our own trade body Assocham, in a special report submitted to the Centre in 2007, claimed that 35 per cent of fake drugs in the world originated in India. 

While the WHO said in 2017 that 10.5 per cent of the drugs sold in India were substandard, the Central Drug Standard Control Organisation (CDSCO) said 4.5 per cent of all generic drugs manufactured in India were substandard.

And what is the record of government action in curbing fake drugs? In 2019-20, India recalled just 27 batches of four drugs for being substandard. And how strong is the quality-control machinery? In 2019, India had only 47 drug testing facilities, which tested only about 8,000 samples per year.

In August 2003, the Mashelkar Committee recommended death penalty for the manufacturers of spurious medicines that cause deaths. Successive governments ignored it. Even enhancing the penalty to life imprisonment would have had some effect. But currently, what is in force is the 2016 amendment to the rules framed under the Drugs and Cosmetics Act, which award imprisonment for three to five years or a fine of ₹10,000.

The crooks who get convicted in rare cases pay ₹10,000 and get away. No wonder, very few land up in jail while counterfeit drugs are flooding Indian, and even overseas, markets. Following the Mashelkar Committee’s report, a special task force was also set up to go into the issue of fake medicines. Still, the menace continues and the fake medicines mafia continues to thrive.

Quality enforcement challenge

The composition of the Indian pharma industry is varied. Sixteen big-ticket companies, including Dr Reddy’s, CIPLA, Sun Pharma, Pfizer, and Merck, account for 23 per cent of the total turnover of the industry. Despite transgressions, they do face at least some quality control tests. 

But the MSMEs in the pharma sector, numbering around 24,000 — including around 7,000 registered SMEs — account for 60 per cent of production and 70 per cent of exports from India. They face very little quality control.

Also read: India-made cough syrups deaths in Gambia: Drug regulator initiates probe

In other areas of manufacturing, the operation of market forces might work as an inbuilt mechanism to discourage substandard production. But in the case of the production of substandard medicines, lives would be lost. So, the manufacture of spurious medicines is a quality challenge of a different order.

The big pharma companies have their share of problems, such as overpricing, bogus claims, and even marketing of substandard medicines. In their case, only the price issue is being addressed through the National Pharmaceutical Pricing Authority (NPPA). But the dirty underbelly of the Indian pharma industry is the unregulated informal sector, which accounts for the bulk of the pharmaceutical manufacture.

Dirty underbelly of pharma sector

The pharma MSMEs do not abide by any strictly-laid-down safety or environmental norms. They have no proper infrastructure needed for a pharma unit and no facilities for testing the quality of their output. 

Different states have different safety and environmental laws, and the MSMEs have serious compliance problems. The governments’ attention is more on the financial problems of the MSMEs rather than on the absence of quality standards and their compliance anarchy.

For their inputs, most of them rely on chemical suppliers who, in turn, are unregulated. And most of these MSMEs are run from dingy and ramshackle places resembling car sheds or grocery shops. In fact, Haryana’s Maiden Pharma, whose cough syrup allegedly killed 66 children, operates from a two-room shop in a crowded locality.

More on Maiden Pharma

To know how these informal pharma units operate, The Federal spoke to Prem Singh Gehlawat, who owns a small-scale pharma unit, Friends Pharmacy, in Haryana. Prem Singh’s house is located at a stone’s throw from the Maiden Pharma unit near the Singhu border, the controversial unit that exported cough syrup to Gambia. He is quite familiar with the operation of that unit.

Also read: Maiden Pharma didn’t test cough syrups for toxic contaminants: Report

Gehlawat said: “I started my own unit in 1979 at an investment of ₹2 lakh. Now, starting a similar unit of about the same size as Maiden Pharma would require ₹1 crore. If you can install a tablet- or capsule-making machine costing ₹30,000 (manually operated) to ₹3 lakh (automatic), a wrapping machine priced around ₹15 lakh, and a syrup-bottling machine for around ₹3.5-4.5 lakh, you can become a pharma manufacturer. Obtaining licence and quality certificates is the key and “purchasing” both would also cost money.

“After adjusting for production cost, the salary of sales representatives, and incentives for doctors for prescribing the drug, I pitch my wholesale price at a 35-45 per cent margin. The MRP is fixed at 50 per cent above the wholesale price, and the retailers take that margin,” he added.

Commenting about Maiden Pharma, Gehlawat said: “The unit has downed shutters. The Haryana government has only issued a show-cause notice asking why its licence should not be cancelled, but the owners have not been arrested. Even if the licence is cancelled, they will obtain a new licence under a new name.”

Incidentally, Gehlawat is also a leader of a farmers’ association All-India Kisan Mahasabha (AIKM). As a leader, he often takes up the problems of small pharma manufacturers with the authorities. He told The Federal the Centre and the state governments should do more by way of technological improvement, imparting skills to the employees, and extend marketing and export assistance. “Ensuring quality is also the government’s responsibility and not the manufacturers’ headache alone,” he observed.

The ‘price’ of checks

So, how are the medicines marketed through the retail outlets and what systems exist to check adulteration by retailers? To know about that, The Federal spoke to Anil Verma, who is a franchisee for Addison Pharmaceuticals (Pvt) Ltd in Prayagraj. Besides, he runs his own marketing unit, FrankLife Remedies, for which he buys drugs in bulk from Chandigarh and Gujarat and sells them to medical shops.

Also read: After WHO alert on its cough syrups, Haryana firm asked to halt production, faces licence cancellation

Verma said: “Drug inspectors take samples from retail shops as well. They usually take some bribe and give a free chit to the retailers and even return the samples without sending them to laboratories for testing. Even if they send those, the laboratories, too, have their rates to issue quality certificates. Quality certificates can be ‘purchased’ even from private laboratories. The bulk manufacturers from whom we buy the medicines display online the quality approval certificate from the Drug Controller of their state, and the local inspectors take a copy of that as their record of inspection. 

“The drug inspection has nothing to do with quality otherwise. Gifts to the doctors range from ₹2,000 to ₹3,000 a year, depending on the volume they prescribe. A similar amount is paid to the drug inspectors as ‘commission.’ He gives 27 per cent margin to retailers and keeps 12-20 per cent margin for himself, depending on the type of medicine.”

Rajesh Sharma, a physiotherapist in Prayagraj, said, “All healthcare centres here have their own attached pharmacies, and they prescribe excessive drugs with brand names that are available only in their shops. Even if they are not spurious medicines, prescribing such non-essential medicines is also a form of dispensing fake drugs. But legally, it is very difficult to curb such clinical malpractice.”

Toothless regulatory mechanism

No healthcare system can function without proper mechanisms to regulate the quality of medicines. The office of the Drugs Controller General of India (DCGI) is mainly responsible for ensuring the quality of pharmaceuticals produced, marketed, and exported from India. States also have their State Drug Controllers. 

But the drug control units in many states do not have their own intelligence and prosecution units. They depend on the general intelligence units and crime control wings of the state police department, which lack the technical expertise and the wherewithal to get intelligence inputs and prosecute the accused.

The government has also adopted a National Survey for Quality Evaluation of Drugs Programme (NSQED).

Also read: ‘Killer cough syrups’ maker Maiden Pharma is a repeat offender in India

On May 6, 2002, the Minister for Health and Family Welfare stated that between April 1 and November 26 the previous year, only seven cases of manufacturing of spurious drugs had been unearthed across the country. Of these, two were from Bihar, two from Maharashtra, and one each from Goa, Karnataka, and Delhi. The minister was answering a query on spurious drugs in the Rajya Sabha.

Such had been the splendid record of the mighty Indian state in cracking down on sellers of spurious drugs. No wonder, markets in poor nations are flooded with Indian pharma exports.

Poor technological upgrade

It is vital for the government to do some handholding for these MSMEs to achieve global technological and quality standards. The government has set up around 120 tool rooms across the country — similar to incubators for the start-ups — that are supposed to technologically upgrade the pharma MSMEs. 

But these tool rooms are so outdated that they are least familiar with the latest pharma production technologies. The skilling programmes of the government for improving pharmaceutical skills are no match for what’s needed to maintain global standards in pharma technologies. These “skill-development” organisers themselves lack adequate skills.

On July 21, 2022, the government launched three schemes for pharma MSMEs for technology upgrade and for setting up common research centres and common effluent treatment plants in clusters of pharma MSMEs. Among the three, the Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS) provides loans for tech upgrade up to ₹10 crore, with 10 per cent subsidy repayable in three years and with an interest subvention of 5 per cent. 

The scheme was introduced only a couple of months before the deaths of 66 children allegedly due to substandard cough syrups manufactured in India, which came to light in the first week of October 2022. Hence, it is too early to assess its effectiveness.

However, such schemes can succeed only if combined with more stringent punishment for the manufacturers and sellers of counterfeit medicines. An amendment to the Drugs and Cosmetics Act, 1940, providing for at least 10 years of rigorous imprisonment for anyone manufacturing or selling counterfeit medicines, can have a telling effect.

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