THE Indian pharma industry mired in sloth, inefficiency and corruption at the MSME level is now learning to compete in the market place with transparency and matching global standards.
“More than 15 per cent of medicines produced by small companies in India failed to meet quality standards compared with the national average of about 2 per cent, says a Government report on a recent survey. In the latest risk-based inspections of micro, small and medium enterprises (MSMEs), which have been on since December 2022, of the 271 samples analysed, 41 (15.1% per cent) were declared to be not of standard quality (NSQ), says the report. A person in the know said 30 per cent of the MSME units inspected were issued a stop production order (SPO).”
The above excerpt from an Economic Times report of January 3 is a reflection of the abysmal quality and standards that India’s MSME drug industry thrives under.
In fact, it has become a part of their DNA— to cut corners, prosper in poor quality and somehow manage to sell their products through unscrupulous exporters and traders. All this, though, has been made possible because of a corrupt and poorly managed regulatory and oversight mechanism which thrives in inefficiency, sloth and corruption. A look at Central and state Government- run hospitals would be a good example of the dark side of the system— unavailability of medicines most of the time or medicines from these vast MSME’s that thrive on the Government of tendering and buying from the lowest cost producer. Unfortunately, the establishment allowed this systemic rot to continue for far too long.
The consequences was that it dealt a body blow to the Indian pharmaceutical reputation. Just look at the damage: l Multiple Indian-made cough syrups (around a dozen at last count) were declared as substandard by the WHO. l The US FDA (Federal Drug Authority), too, has sent multiple communication on the issue.
l Several countries—especially in Africa—have blacklisted scores of Indian companies for their dubious practices. l In October 2022 contaminated syrup exported to Gambia led to the deaths of several children. In 2023, deaths were reported in Uzbekistan and the villain was made-inIndia medicines. Then came complaints of substandard medical products from several other countries including United States, Marshall Islands, Micronesia, and Sri Lanka.
Thankfully, the authorities have finally woken up to the perils of this criminal subterfuge by a segment of the drug industry, especially the MSMEs. Several months back, in August to be more specific, the Government asked all manufacturers to follow WHO standards. The Drug Controller General of India (DCGI) finally woke from its slumber and conducted scores of raids across the country and revoked manufacturing licenses, introducing Schedule M guidelines (Schedule M prescribes requirements to the manufacturing plants of pharmaceutical companies for maintenance, manufacturing, control and safety testing, storage and transport of material, written procedures and records, traceability etc.),and bluntly telling pharma companies to either upgrade or risk shutdowns.
It has now followed up this move by setting up a team to develop a portal that will enable tracking of drug-making processes. Medicine manufacturers will be required to feed in details of raw materials and distributors will need to upload their invoices on this platform. The site will also contain information about spurious and poor-quality drugs unearthed by inspectors .
Credit will have to be given to Rajeev Singh Raghuvanshi, the country’s first regulator from the private sector, having formerly worked at Ranbaxy and Dir. Reddy Laboratories. What Raghuvanshi is trying to do is recast the country’s drug regulatory agency — Central Drugs Standard Control Organization (CDSCO) into a vibrant, forward looking regulatory institution.
Paradoxically, what it has done is made the Indian drug industry—especially the MSMEs –sulk and complain. They are now under tighter inspection and they are just not liking it. The foreign drug companies on the other hand are loving it. One news report quoting Anil Matai, director- general of the Organisation of Pharmaceutical Producers of India (OPPI), that predominately reflects the viewpoint of the global manufacturers described the CDSCO as “a beacon of excellence in the regulatory landscape”.
Of course, they will be delighted, after all they were finding it impossible to compete in a market where the domestic competition was cut throat and unbeatable on prices.
For the local manufacturers, the lesson is for them to up their ante and learn to compete with the Goliaths with quality products at cheaper prices. After all other Indian manufacturers in other sector have done it. Why can’t the pharma industry ?