Worth the price? Push for cheaper generic drugs has Canadians buying questionable medicines from India
By Tom Blackwell
March 13, 2015
Somewhere in Canada today, a patient is likely filling a prescription for a common generic migraine drug, dispensed by a licensed pharmacist, perhaps paid for by a provincial drug plan.
What that patient is unlikely to know is the drug’s active ingredients come from a company called Dr. Reddy’s Laboratories Ltd. in India — or that U.S. inspectors made some eye-opening discoveries recently at the plant that produces them.
In a country notorious for unsafe drinking water, they found Dr. Reddy’s has no way to ensure the water used to make the ingredients forming part of medications taken by Canadians is free of biological contamination.
The company ignored tests showing unknown impurities in some drugs, and inspectors came across samples with bacteria and mould that were “TNTC,” too numerous to count.
The reviewers also noted the washroom for factory workers, situated in a separate building, lacked hot water, soap, air dryers or single-service towels.
Health Canada barred imports from Dr. Reddy’s plant after the U.S. Food and Drug Administration (FDA) inspection.
But that is only the latest fallout from this country’s growing dependence on medicines made in India, as foreign regulators monitoring the booming South Asian industry uncover questionable manufacturing standards, manipulated records and even defective drugs.
Prashanth Vishwanathan/BloombergDr. Reddy's Laboratories is accused of ignoring tests showing unknown impurities in some of its 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,” says Andrew Beato, a Washington lawyer involved in a major prosecution of an Indian drug company.
“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.”
The worry is not just those “unknown impurities,” but whether the drug will actually work, he notes.
The pharmaceutical industry was once concentrated in Europe and North America, but has spread increasingly into the developing world, where low costs cater to a growing Western pressure.
Most of the blockbuster drugs that fuelled Big-Pharma profits over the last two decades went off patent in the last few years, opening the market to generic copies. To exploit that “patent cliff,” governments and insurers in Canada have pushed for lower and lower prices on the copies, and often mandate that patients’ prescriptions be filled with generics.
India, meanwhile, has developed a $15-billion generic-pharmaceutical industry, with labour costs about one-tenth of those in Canada.
This means about one in 20 of this country’s finished drugs are now made in India – roughly 20 million prescriptions a year. Almost 10% of the factories that supply drugs or active ingredients to Canada are in the south Asian country, says Health Canada.
Amit Bhargava/Bloomberg/FilesA researcher works in a Ranbaxy Laboratories Ltd. lab in Gurgaon, India.
As a sign of the shift, Canadian generic giant Apotex Inc. locates about 10% of its production at two Indian factories.
This push to make generics ever cheaper is saving the health-care system billions of dollars. But, says Dinesh Thakur, a soft-spoken chemical engineer and former executive with Ranbaxy Laboratories, it comes with a price of its own.
“When we talk about generic substitution, we always talk about cost, not quality,” he says.
“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.”
Sloppy practices and even outright fraud at some – though not all — Indian facilities have been repeatedly documented. A National Post investigation found quality issues are directly affecting Canada in several ways.
When Health Canada launched a new “Inspection Tracker” website this month listing concerns about standards at pharmaceutical factories, 11 of the 15 plants on the list were in India, seven of them now subject to import restrictions.
Of the 10 drugs already on the market and recalled because of quality defects since New Year’s Eve, four were made in Indian factories, Health Canada says. They included lots of a generic version of the antibiotic cefazolin, pulled because of fears the intravenous solution contained foreign particles.
At the same time it shut off imports from Dr. Reddy’s plant in India, Health Canada did the same for one owned by IPCA Laboratories.
Dhiraj Singh/BloombergAbout one in 20 of Canada’s finished drugs are now made in India – roughly 20 million prescriptions a year.
FDA inspection reports on the factories, obtained by the National Post under U.S. Freedom of Information laws, deal mostly with “data integrity” issues. That refers to testing done for the presence of active ingredients or unwanted impurities, both of which can have a direct impact on whether a drug does what it is supposed to do, experts say.
The IPCA factory in Pithampur, for instance, chose not to reject drug products that failed to meet specifications in initial “trial” tests, the FDA reported. Inspectors said these negative results at the plant , which makes an anti-psychotic, an opioid pain drug and an anti-nausea medicine for Canada, were not documented, reported or investigated.
IPCA also overwrote and deleted other raw data files, and scattered some test results randomly into a computer hard drive “in what appears to be an attempt to hide results,” the FDA says.
Neither IPCA nor Dr. Reddy’s responded to requests for comment, but Amir Attaran, a health-policy expert at the University of Ottawa who tracks the industry, said the findings are troubling.
“These guys are not keeping records, are fudging records, are systematically deleting records,” he says of the IPCA report. “It is managing to do things no company should be able to do on the production line.”
The fact anyone is paying attention to the quality of Indian-made medicines is arguably because of Mr. Thakur. In 2004, he noticed a generic antibiotic produced for the Indian market failed to curb his son’s severe ear infection; a switch to the brand-name version knocked down the boy’s worrying high fever overnight.
He decided to blow the whistle, leading to a US$500-million U.S. government penalty against the Indian generic-maker, Ranbaxy Laboratories, in 2013 for selling adulterated drugs, fudging data and misleading regulators.
Yet he and other experts agree one of the key problems with the Indian industry is a regulatory system that is not up to the job.
The national regulator reportedly has fewer than 400 staff to police more than 1,300 factories, and does not even oversee many of the drugs exported to places like Canada. That job falls to state-level officials, who have a reputation for being under-trained and corrupt.
Three years ago, an Indian parliamentary committee looking at the drug-approval process concluded regulators were often in bed with the companies they governed, putting consumers’ interests last.
“If parliament says that about their own regulators, you can imagine how bad things are,” says Mr. Thakur.
India’s Ministry of Health and Family Welfare did not respond to a request for comment. The chief drug regulator, however, has said he plans to add hundreds more staff and promised more oversight of the manufacturing process, while signing a co-operation agreement with the FDA last year.
Indian industry and government have also suggested manufacturers are being unfairly attacked and subjected to overly stringent oversight by the Americans.
Scott Eells/BloombergIndia's chief drug regulator has said he plans to add hundreds more staff and promised greater oversight.
Apotex says its Indian factories, given dim reviews by the FDA, had received compliant grades when inspected by Health Canada and other foreign regulators.
The FDA “discriminates against plants outside the U.S.,” responding more harshly when it finds problems than it does with factories in the U.S., the Canadian company said in a statement.
Canadian, Australian and European regulators also gave passing grades to Ranbaxy, despite the company’s guilty plea to seven offences in the U.S., notes Dinkar Saran, a pharmaceutical-industry consultant with PriceWaterhouseCoopers in Boston.
He contends the industry is pulling up its socks, much as pioneering U.S. generic producers did after a spotty record two or three decades ago.
“Quality used to be an afterthought for Indian pharma executives,” says Mr. Saran. “Now quality, if it’s not their No. 1 agenda, it’s in the top three.”
Others are not so sure anything has happened to dramatically curb manufacturing shortcomings, and argue that far from being too strict, the FDA ensures only the minimum standards are maintained.
“I’ve looked at what has happened in that country now for nearly a decade,” says Mr. Beato, who represented Mr. Thakur as a whistleblower. “I would go so far as to say that virtually nothing has changed.”
The FDA now has an office in India, with about a dozen employees, but they are hampered by working in an unfamiliar culture, and there are too few of them to make a dent in monitoring the hundreds of plants supplying North America, says Mr. Thakur.