Daybreak - Indian pharma is in the news again. For all the wrong reasons

Episode Date: June 20, 2023

Despite being called ‘the pharmacy of the world,’ time and again, the Indian pharmaceutical industry has received criticism for substandard quality. Last year, the deaths of children in Gambia and Uzbekistan were allegedly linked to cough syrups manufactured in India.Yesterday, the WHO flagged seven more Indian-made cough syrups for containing toxic chemicals. Why does Indian Pharma still struggle with quality control?Tune in to find out.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too? It's for a special announcement. For the last few months, I and Sita Ramon Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording.

Intermission launches on March 23rd. To get an alert as soon as we release our first episode, please follow Intermission on Spotify and Apple Podcasts or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Indian Pharma is in the news again. And not for being the pharmacy of the world.

It is for all the wrong reasons. It was reported yesterday that the World Health Organization has flagged, seven more made-in-India cough syrups for their substandard quality. These syrups have been linked to over 300 deaths around the world. The companies who produce these medicines under question are Haryana-based made-in pharmaceuticals, Marion Biotech and QP Farmer Chem. Now, as you can probably tell, I'm still not feeling 100%.

I got a very bad flu last week and I am still recovering. You guys, please be careful too. So today I'm going to play an older episode for you, but it is super relevant because of the news that I just told you about. This one is about why the Indian pharma industry is still struggling with quality control. In October last year, news broke out about a tragedy that unfolded in the African country of Gambia. More than 60 children had died of acute kidney failure. Two months later, at least 20 more children died in Uzbekistan in a similar manner.

There was one thing that was common in both of these shockingly painful incidents. All of these children had allegedly consumed cough syrups manufactured in India. India, the pharmacy of the world. The WHO began an investigation and said that the deaths might have been linked to contaminated medicines. The medicines, which were over-the-counter cough syrups, had high levels of diethylene glycol and ethyline glycol. Both are known to be fatal to human beings. The news sent shockwaves across the country

and brought global shame to India that takes pride as the hub of affordable pharmaceuticals for the entire world. In response, Indian authorities initially tried to argue that finding this casual link between these cough syrups and the deaths of these children was premature. But the WHO had conducted tests and it doubled down on its stand that these were contaminated syrups.

Two months later, in fact next week itself, the Health Ministry of India is organising a two-day chintan shiver. The event which will be held on the 26th of February will explore ways to build trust on Indian drugs. At the event, experts and officials are expected to get together and review the predictability, transparency and accountability in the regulation of the quality of drugs in India. Today, I will tell you why the Indian pharmaceutical industry still struggles with quality control. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nick Das Sharma, and I Don't Chase the News Cycle.

Instead, thrice a week on Mondays, Wednesdays and Fridays, I will come to you with one business story that is worth understanding and worth your time. Today is Wednesday, the 21st of June. Deaths due to DEG contamination are not new to India. DEG, or diethylene glycol, is known as an industrial solvent and it is used to manufacture break fluids, cosmetics and lubricants. In their book called The Truth Bill, the Nish Thakur and Prashant Reddy have documented at least half a dozen cases of DG poisoning in India.

In 2019, 12 children had died in Ramnagar in Jammu district after being given a cough syrup manufactured by a company in Himachar Pradesh. All the children were diagnosed with acute kidney injury. Samples of the syrup had tested positive for DG, just like in Gambia and Uzbekistan. There are scores of such cases related to substandard quality of drugs in India. Not long after the DEG incident, another Indian pharma company had to stop manufacturing an eyedrop. It was after the US Centre for Disease Control and Prevention, or the CDC, said that the product

may have been involved in infecting 55 people across 12 American states and causing one death. Symptoms among other infected patients included vision loss. The cases were recorded between May 22 and January 2023. In another quality-related case recently, the FDA stopped the import of many drugs made in India by Sun Pharma because of outstanding quality issues. In November, another major Indian drug maker, Glenmark Pharmaceuticals, was handed a warning letter. But the thing is that the regulation process itself is quite complex in India. So next, I give you a sense of what exactly it entails.

Stay tuned. Five years ago, Ruhi Kandahari, a writer at the Ken, attended a workshop organized by the Indian pharmaceutical industry on the quality control process of the US Food and Drug Administration or FDA. The FDA representative who was at the workshop talked to these drug makers about quality standards. Ruhi says that it was like primary school teachers running their students through the alphabet. He went down to the very basics because according to him, the details are of utmost importance. He explained how something as small as a whole in a lab assistance glove could destroy

product quality or how someone using their teeth instead of scissors to open a packet in a drug plant could also have the same effect. But keeping up with such high standards comes at a cost. In order to meet the standards laid out by the FDA, which, by the way, is one of the strictest drug regulators in the world, a drug maker who wants to export his medicines to the US has to hire FDA accredited consultants. These consultants charge close to $8,000 a day,

and these drug manufacturers have to work with them for at least to years to make their factories compliant. Now, this is only one of the many similar costs that some Indian drug manufacturers tried to avoid in the race for higher profit margins. An industry representative with over three decades of experience with one of the major drug exporters spoke to Ruhi about it. He told her that most drug manufacturers who have been served warning letters do not prioritize quality. He said, and I'm quoting, It is evident because they stick to two age-old rules of business, growing revenue and cutting costs. End quote.

He added that quality only became a subject of discussion when the FDA inspection started hurting export revenue and also the drug makers' future access to high-value regulated markets. Coming up next, we look at the laws that govern drug quality in India. In India, the standards for drugs and medical devices are covered under the Drugs and Cosmetics Act of 1940. Under this act, a network of regulatory authorities, both at the central and the state levels, control the entire process. Drug quality regulation in India has been a recurring issue for a while now. More than 10 years ago, a parliamentary standing committee on health and family welfare studied this. the matter. In the report, the committee had noted down a series of sharp criticisms on the lack of

transparency in the way that the drug regulator was functioning. It recommended that the CDSCO or the Central Drug Standard-Stand-C-control organization should have a clear set of written guidelines. This was specially for the selection process of drug experts. Even now, with the scores of instances related to poor quality of drugs, experts have blamed the lack's implementation of drug regulation. They have also pointed out to the lack of infrastructure and planning in the area. Coming up next, we talk about who is responsible for maintaining the standard of drug quality in India. In Truthville, the book about the pharmaceutical industry in India, the authors say that the Indian drug regulator is responsible. They argue that drug regulation,

in the West has evolved after disasters. The West has created institutionalized mechanisms to ensure drug safety. But in India, both the drug regulator and the judiciary have failed to take adequate steps. In the book, Dinesh Thacker says, and I'm quoting, much of the drug regulatory law has been written

with the blood of citizens, many of them children. End quote. Even now, the Indian drug regulators actions continue to be under question. It decided to give a clean chit to Sonipat-based maiden pharma despite the WHO's medical product alert over the children's death in Gambia. Right now, it is conducting another inquiry into the case involving Noida-based Marion Biotech, which has been linked to the deaths in Uzbekistan. So the question that remains is this. If the government

drug regulator continues to remain toothless, why would the Indian farmer, industry bother to adopt more stringent standards. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters, subscriber-only apps, and podcast extras. Head to the ken.com and click on the red subscribe button on the top of the website.

I am Snigda Sharma, your host. Today's episode was edited by my colleague Rajiv Sien.