India needs to restore faith in the ‘World’s Pharmacy’

INDIANS have long been proud of their pharmaceutical sector. It’s a big exports earner in a country that can’t have too many. It boasts a number of well-regarded, profitable companies. And its exports to other developing countries allow us to think of ourselves as benefactors, and therefore leaders, of the Global South. Our success exporting generic medicines in particular has led us to take a dim view of modern patent protections — and we have soaked up the approval of anti-Big Pharma activists in the West.

We ought to be a little less self-satisfied and a little angrier. For more than a decade, it has been clear that too many medicine makers in India have not been doing their duty by their customers, here and abroad. That’s bad in any industry — and outright infuriating when it comes to medicines.

Last year, local investigators linked Indian-origin medicines to multiple deaths of children in Africa and Central Asia. Bloomberg News reported recently that the US Food and Drug Administration (FDA) has sent out dozens of notices to Indian pharmaceutical companies as it restarts its on-site inspections post-pandemic. Many of these firms are accused not only of negligence, but of deliberately ignoring warnings. The Pentagon is so worried about the quality of generics that it’s independently testing medicines meant for US soldiers and their families.

Doubts about Indian drugs will have dangerous ripple effects. Without Indian-made generics, pharmacies across the world would be much emptier. The FDA, for instance, has banned drugs produced by Intas Pharmaceuticals Ltd. from being imported into the US. That will hurt the millions of patients who rely on the company’s generic version of the cholesterol drug Lipitor. Indeed, US regulators have had to make exceptions for some of Intas’ cancer drugs, which are already in very short supply.

There’s a distinct possibility economic nationalists in the US could seize on examples such as Intas to force the onshoring of medicine production, even of generics that can and should be made cheaply and efficiently elsewhere. That would raise prices and reduce supply for everyone.

This is hardly a new problem. More than a decade ago, Ranbaxy Laboratories Ltd. — then considered the jewel of India’s pharma sector — had to recall tens of thousands of bottles of its generic version of Lipitor for fear that they contained tiny fragments of glass. That was just the beginning of a series of revelations about the quality of Ranbaxy’s medicines — oil specks in some tablets, falsified trial data, adulteration — that eventually caused the company to fold in 2014. The saga left neither India’s pharma sector nor its regulators looking very good.

Apparently, they haven’t improved much. Sure, part of the problem is that the FDA limited inspections of manufacturing facilities in India during the Covid pandemic. The agency needs to staff up its overseas offices, including the one in New Delhi.

But what were Indian regulators doing? Why did it take a few small teams of foreign regulators to uncover this level of wrongdoing? India’s drug regulators — whose authority is divided between the federal and state governments — need to work harder to raise their standards to those prevailing in the western world.

Too often, Indian regulators respond to reports of sub-standard exports by going into a defensive crouch. After cough syrup exported from one north Indian firm apparently caused the death of 70 children in the Gambia late last year, Indian regulators wrote to the World Health Organization insisting the factory had “complied with specifications.”

India’s muddled pharma regulation is emblematic of a broader failure to upgrade state capacity sufficiently to build trust in Indian products. The industry has 36 different regulators, allowing for unscrupulous fly-by-night operators to shop around for the most pliable jurisdiction.

Fixing this isn’t rocket science. We have to consolidate all these regulators into one, make sure that inspection records and reviews of drug applications are made public, and put all generics manufacturers through the same tests as companies making new drugs.

Until that happens, kids across the world will continue to die — and, eventually, mistrust of Indian products will grow so intense that countries will stop buying from us. You cannot be part of global value chains if you don’t build up a reputation for transparency and regulatory energy at home.

While multiple sectors need attention, it would be smart to start with one whose decisions are literally life-or-death. India’s leaders sometimes like to claim that we are the “pharmacy of the world.” If so, we need to take that responsibility more seriously.

BLOOMBERG OPINION