India’s Misguided Response To Findings On The Quality Of Drug Exports

India’s misguided response to our findings on the quality of drug exports

Roger Bate, Aparna Mathur, Amir Attaran, Ginger Zhe Jin | SpicyIP

American Enterprise Institute

October 10, 2014

A recent National Bureau of Economic Research working paper that we co-authored on the quality of Indian medicines exported to Africa has drawn surprising over-reaction from the Indian government and pharmaceutical industry. In a recent article in the Economic Times, officials said that India’s government is planning a defamation suit against our research team for running a “smear campaign” against the industry. The government’s threat of legal action is a shocking development, and if it proceeds, will hurt India more than it will hurt us.

Our research team is composed of four highly trained PhDs in health sciences, economics and law. All of us are professors or scholars at universities or think tanks in Canada and the United States. Everything about this study—the collection of data, the analysis, and the write-up and publication—was done in a rigorously academic fashion. The paper is a working paper, which means it has not yet been through extensive peer review and is disseminated for the purpose of idea sharing, discussion, comments, and suggestions. But the vast majority of the quality data have already appeared previously in some of the top medical, scientific and socio-economic journals after extensive peer review.* What is new in this paper is that we track manufacturer identity as labeled on the package and for the first time compare drug quality of the same manufacturer across different purchase countries.

In order to prevent anyone from making further sweeping generalizations regarding the study, we think it bears repeating the main findings from our study. For the paper, we examined 1,470 samples of antibiotics and tuberculosis medicines that claim to be made in India but were purchased from India, Africa and other mid-income countries. We then tested these drugs for quality using simple physical and chemical methods. From the overall sample, 10.9% failed basic quality tests, which means they had less than 80% of the standard amount of active ingredient (API). Drugs that fail the quality test are classified as either substandard or falsified: substandard drugs contain some positive active ingredient (but less than 80%), while falsified drugs have no active ingredient at all.

We find that a significantly higher fraction of these “made-in-India” drugs are substandard or falsified if they were purchased in Africa than if they were purchased in India or non-African middle income countries such as China Brazil, Turkey, Thailand and Russia. We find geography best explains this disparity in drug quality. Other variables such as GDP per capita, adult literacy rates, price regulations, criminal penalties for counterfeiting, the rule of law, or intellectual property protections do not adequately explain this finding.

But our most interesting result has to do with medicines that are sold illegally in Africa because they are not registered with the government for sale. Overall, the passing rates of registered drugs were similar across Africa, India, and non-Africa, averaging more than 90%. However, among unregistered products, the passing rate was less than 50% in Africa and 67% in India. The presence of Indian drugs in the unregistered market is worrying enough, but our data suggest that these medicines are especially poor quality and could be dangerous.

Based on these data, we consider a few possible explanations in the paper. After articulating our assumptions, we argue that the prevalence of poor quality drugs in Africa is likely driven by Indian firms – whether manufacturers or exporters – that do not bother to register products in the African countries where they are sold or consumed. This is a serious failure which both India’s government and industry should investigate and resolve. Due diligence, obviously, never allows a medicine to be sold where it is not registered—and yet this is happening all too often with “made-in-India” medicines.

Due to limited resources, ours is a pilot study and its conclusions may not repeat in larger, more detailed studies, which we welcome. However, we do believe we have made the correct interpretation of our data because none of our results are surprising. Anyone familiar with the pharmaceutical industry in India or Africa knows that a large number of Indian medicines are traded through poorly regulated channels where both compliance with the law and quality standards can be easily evaded. Our point is that if India wants to be regarded as a serious and ethical drug exporting country—does it?—then this has to stop. Yet for saying the obvious, India’s government is now threatening to sue us.

It is quite common for academics to publish studies that governments dislike, but not common for governments to sue them for it. However, as a recent paper in Foreign Policy noted, the Bharatiya Janata Party (BJP) and the Modi government have a nasty habit of suing and criminally prosecuting their opponents. Not even North Korea or Russia have ever taken the illiberal and foolish step of suing scholars for publishing academic research, but India is poised to become the first government to do so. Is that really how India wants to be viewed in the world: as illiberal, hypersensitive, and more concerned about shooting the messenger than responding to our message to improve drug quality and save lives?

Roger Bate is an economist who researches international health policy, with a particular focus on tropical disease and substandard and counterfeit medicines. He also writes on general development policy in Asia and Africa

Notes: *For example, see Bate R, Jensen P, Hess K, Mooney L & Milligan J. 2013. Substandard and Falsified Anti-Tuberculosis Drugs: A Preliminary Field Analysis. International Journal of Tuberculosis and Lung Disease. Bate R, Mooney L, Hess K, Milligan J & Attaran A. 2012. Anti-Infective Medicine Quality: Analysis of Basic Product Quality by Approval Status and Country of Manufacture. Research and Reports in Tropical Medicine. Bate R, Zhe Jin G & Mathur A. 2011. Does Price Reveal Poor-Quality Drugs? Evidence from 17 Countries. Journal of Health Economics.


(jj note) Isn’t this what Obama’s Justice Department under Eric Holder does? Smear the messenger.


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