(Weekly Organ of the Communist Party of India (Marxist)
June 16, 2013
Who Manufactures Dirty Medicines?
A FEW weeks back Fortune magazine and CNN carried a long online blog titled ‘Dirty Medicine’ by Dinesh Thakur, a former employee of Ranbaxy, where he recounts how he came across several procedural and other lapses in the company’s manufacturing facilities. Since then the Fortune blog has become one of the most widely circulated and commented upon business stories in the world. The story received attention as it came in the wake of a 500 million US dollars fine, slapped on the drug manufacturer Ranbaxy by the US Food and Drugs Administration (USFDA). Ranbaxy was found guilty on seven counts – three criminal charges and four civil charges.
If the only substance in the story had been about a company being charged with malpractice by a regulatory agency and being asked to pay a fine, that would not have been a rare occurrence. Companies across the world are known to flout regulatory standards and norms, and when caught out agree to settle by paying a fine. This is so particularly in the case of pharmaceutical companies, and there have been a number of similar instances reported in the past few years.
THREAT TO BIG PHARMA
FROM INDIAN GENERICS
What makes the Ranbaxy
story special is its link to
For long the
pharmaceutical industry situated in
Europe and the
The global pharmaceuticals industry, dominated by ‘big pharma’ (the 16 largest companies) for decades, has grown exponentially through a business model that is based on keeping drug prices high by continuously misusing its monopoly power. Much of the monopoly power that big pharma wields comes from the global patent regime, that allows 20 years of monopoly to a company that first puts a medicine on the market. Unfortunately for big pharma, its story is starting to unravel. There are very few new drugs in the pipeline that can continue to maintain its monopoly status. On the other hand, a number of medicines that fuelled its growth are going off patent – i.e. big pharma is going to lose its monopoly position. Between 2011 and 2015 several of the most profitable drugs (which big pharma calls blockbuster drugs) have gone off patents or shall go off patents. The combined sales of these drugs are an estimated 250 billion dollars – almost 40 per cent of big pharma’s global sales. As we note earlier, there are very few promising drugs in the pipeline that are likely to fully replace these drugs as money spinners for big pharma.
When drugs go off
patents generic manufacturers, that
is those who do not hold the patents, are able to enter the
market and create
competition in a hitherto monopoly situation. Typically,
when generic manufactures
are able to sell their medicines, drug prices fall by 90-95
per cent; i.e. they
become available at prices that are one-tenth to
one-twentieth of existing
prices. This is good for patients but bad news for big
Unable and unwilling (because this goes against their business model) to compete on prices, big pharma has campaigned assiduously to create doubts about the quality of Indian medicines that are sold in their own markets. This is the larger context within which the Ranbaxy story has to be understood.
GUILTY AS CHARGED
Let us return to the
specific case involving Ranbaxy.
The media, both in
In fact the USFDA is on record for having stated that “it did not receive any reports of patients being harmed by the drugs made at the plants in question.” In fact Ranbaxy’s drugs were not found to be deficient as regards the ingredients present in them or as regards their standards, or as regards their bio-availability (i.e. whether its drug has identical effect in the body as the original drug). We need to remember that the USFDA had been investigating Ranbaxy since 2006. If there had been even a single case where its drug was not found to have been of requisite standard, then the USFDA would surely have made such reports public.
Why then was Ranbaxy charged? Ranbaxy was charged because it lied to the USFDA regarding its documentation and the procedures followed in its manufacturing facilities. Ranbaxy provided data regarding its regulatory procedures that it had deliberately falsified. USFDA regulations are often quiet different from what drug regulatory agencies in India require, and hence very distinct and different documentation is required to be submitted to the USDA to get marketing approval in the US. The fact that Ranbaxy provided false documents does not prove that its drugs were of bad quality, and by extension it is definitely no evidence that Indian generic drugs are generally of poor quality.
Yes, Ranbaxy was
guilty of deliberately falsifying
date to get regulatory approval in the
ORCHESTRATED CAMPAIGN TO
DEMONISE INDIAN GENERICS
What is, however, of
much graver concern is the way
the Ranbaxy episode is being used to mount an orchestrated
generic medicines manufactured in
The entire episode is
being posed as if it represents
a problem of poor quality medicines being produced in
In 2012, Glaxo paid three billion dollars after facing criminal charges of illegally marketing drugs and withholding safety data from US regulators. Again, in 2010, Glaxo paid 750 million dollars after pleading guilty of criminal and civil liability regarding manufacturing deficiencies at one of its plants. According to the USFDA, the company’s manufacturing operations failed to ensure that its drugs were free of contamination from microorganisms.
We return to the Fortune story and
the first hand account
by Dinesh Thakur. The story is titled ‘Dirty Medicine’.
The unstated inference
is that a ‘dirty country’ (
All that we discuss,
however, should not be construed as an affirmation of
existing drug regulatory
It is ironic that Ranbaxy, through the present episode, has come to exemplify Indian generic manufacturers. In fact, the majority shareholding in Ranbaxy is held by Daichi – a Japanese company that is also a part of the 16 big pharma companies. But then, as we have seen earlier, the primary intent in the course of the present controversy was never about targeting Ranbaxy. It was about targeting the affordable generic medicines from Indian manufacturers so that big pharma could continue to profit at the expense of illness and peoples vulnerabilities.