Rip Apart the Current System

Indian pharma must have capable leaders with unimpeachable record to head its regulatory body
By Dinesh S. Thakur   Delhi     Print Edition: March 13, 2016
Rip Apart the Current System
Investments in upgrading infrastructure will address part of the problem

Dinesh S. Thakur, Executive Chairman of Medassure Global Compliance Corporation
The American humorist, Will Rogers, once said: "If you find yourself in a hole, quit digging." Perhaps this does not resonate with the Indian pharmaceutical industry because it prefers to blame everything that is wrong with it on "certain vested western (American) interests". In a recent piece in an English daily, D.G. Shah, Secretary General of Indian Pharmaceutical Alliance, says: "There is no issue with the product quality of domestic generic drugs, but what needs to be followed strictly is documentation and processing at the manufacturing facilities."

Last November, the US Food and Drug Administration (FDA) had issued a warning letter to Dr. Reddy's Laboratories, the second largest generic drug manufacturer in India, where it said that the company ran an "uncontrolled custom quality control (QC) laboratory" to test its products into compliance, destroying records of failing tests and retaining only those that showed their products passing the tests. This is not unique. A cursory review of warning letters issued to Indian pharmaceutical companies since Ranbaxy pled guilty to seven counts of criminal felony in a US court documents similar behaviour. Since then, there have been 44 other instances of data fraud citations against manufacturing facilities in India.

These charges of data fabrication are no frivolous issue as is made out by industry spokespersons in India. Under good manufacturing practices (GMP), every batch is required to be tested for quality before it is shipped. Some big purchasers even require batch testing records before they accept a shipment. If a batch fails a test, a manufacturer is required to withdraw the consignment from the market - in most cases this would result in a loss to the manufacturer. The simpler, unethical and illegal way around this problem is to delete the failed test records and replace them with manipulated test records that demonstrate that the batch passed quality assurance tests. That way, the sub-standard batch of medicine reaches the market in time and the manufacturer rakes in profits. Hence, what industry spokespersons refer to as 'data documentation issues' is not the case of a sloppy secretary failing to file test reports alphabetically but a serious issue, one which has an impact on the lives of human beings.

Poor quality, substandard medi-cines cause severe harm to patients, especially in the treatment of Malaria and Tuberculosis. These two diseases are endemic to poor countries, which have been at the receiving end of substandard drugs for a very long time. There is also a considerable body of evidence in the anti-infectives, where substandard drugs are responsible for mutation of pathogens and development of drug-resistant strains. Unfortu-nately, in western countries, the focus for a long time has been on containing healthcare cost and not on long-term outcomes. This is now changing. Leading practitioners are now beginning to document long-term impact of poor quality drugs for cardiovascular and metabolic diseases, for instance, which affect affluent nations. Aid agencies, including US AID and Global Fund, are also looking beyond access to medicines to ensuring long-term outcomes for the patients they serve.

Medical practitioners in the US have begun to document clinical cases where generic drugs have been shown to cause long-term harm. Documented cases now exist that show generic Metoprolol, manufactured by Indian companies and is used to treat hypertension and chest pain, has significant renal side effects compared to the same drug manufactured in Europe and in the US. The study was based on a small sample, but controlled studies such as these are the basis of long-term longitudinal studies that are funded by the National Institutes of Health (NIH). Similar adverse events have been recorded with generic switch for statins as well. The trend is clear - poor quality, substandard generic medicines cause harm to patients and, as medical evidence piles up, the Americans will act more vigorously against substandard Indian manufactured medicine.

A continued failure to comply with the law has caused significant downward pressure on the revenues and profitability of these companies. The cost of remediation and compliance has been estimated between 3 per cent and 5 per cent of the revenues. The question then is what, if anything, should the industry and, more importantly, the government, through its regulatory framework do to address this threat. As Will Rodgers said, stop digging.

Every time a warning letter is issued to an Indian manufacturer, we learn about how willing the management is to "work with the US FDA" or to make investments to increase compliance. While there has been some progress, we continue to see similar instances across different manufacturing facilities within the same company and with other manufacturers as well. Clearly, "working with the US FDA" is not really working out for the industry all that well.

Investments in upgrading infra-structure will only address part of the problem. Yes, the US FDA expects manufacturing facilities to be of a certain standard and some of the observations are related to poor infrastructure. Fixing leaky roofs, painting walls, providing running water to toilets, etc., will address a very small part of the problem. The bigger issue, which the industry does not acknowledge, is the culture of non-compliance and cover-ups. An entire generation of employees in the pharmaceutical industry has been told by the management that it is okay to tweak, manipulate and destroy unfavourable test results. How else do you explain the fact that the second largest Indian pharma company was running a "hidden" quality control lab designed to rig their testing procedures in order to make their products look good, two-and-a-half years after the country's largest pharma company paid $500 million in penalties after pleading guilty to the same offences before an American court?

The CDSCO has done little to ensure good manufacturing practices are enforced in India
Throwing more money at training programmes is not going to change this culture. Instead, India will need to systematically overhaul corporate governance norms in the pharmaceutical industry. The head of quality assurance in any company whose primary responsibility is patient safety and not profits, should have the last word on whether a batch reaches the patient or is withdrawn from the market. Patient safety and not profits has to be at the forefront of the agenda. In many ways, the head of quality assurance is like the statutory auditor - his or her remit is to be an internal watchdog and make disclosures that the management would like to suppress. However, unlike a statutory auditor who owes a fiduciary duty only to shareholders, the head of quality assurance owes a fiduciary duty to all patients who are consuming their products. The balance between safety and profits is tough to negotiate, and India will have to experiment with new modes of corporate governance.

Part of the reason why we have tolerated a poor compliance culture for way too long is that no one holds the industry accountable. Even as the US FDA discovered shocking lapses and intentional fraud in Indian manufacturing plants, our own regulator - the Central Drugs Standard Control Organization (CDSCO) has done little to ensure that good manufacturing practices recognised by Indian law are enforced in India. Our regulatory structure is in a mess and there is literally no accountability even when people die from taking substandard drugs (a case in point is the sterilisation tragedy in Chhat-tisgarh. The pharma industry lobby is very strong and has undue influence over policy making, often at the expense of public health. An extreme example of the influence of the industry lobby over CDSCO is when an Indian manufacturer told the US FDA that the product that was rejected by the US drug market regulator was "diverted to the domestic (Indian) market" presumably for consumption by patients in India. The CDSCO did not deem it fit to question the manufacturer why it was appropriate to sell substandard drugs rejected from the US to patients in India. There are many examples of such collusion that have been documented in the Parliamentary Standing Commit-tee report on the functioning of the national regulator. Unless we rip the current regulatory framework up from its roots and put a new structure in place with capable leaders with unimpeachable integrity, we will continue to consume more sub-standard drugs in India, often with the implicit consent of the regulator, receive more warning letters from western regulators, and our products will be subjected to more import bans from our export markets.

Change begins at the top. And, lip service only goes thus far. As the adage goes - fool me once, shame on you; fool me twice, shame on me. The regulators, buyers and patients in those very markets who have made the Indian pharma industry so lucrative have caught on to this. Unfortunately, we continue to live in denial. So far, we have buried our heads in the sand and hoped that the problem would go away. It does not appear so, not anytime soon.

Dinesh S. Thakur is Executive Chairman of Medassure Global Compliance Corporation.

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