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Diagnosing the drug supply: Exposing the bad practice of manufacturers in the developing world

Published on 22/07/19 at 10:25am

The world needs cheap generic drugs and Indian manufacturers offer a steady supply. However the quality of generics has been sacrificed in the pursuit of bottom level prices. Louis Goss talks to investigative journalist Katherine Eban as she discusses the realities of the generic drug industry today.

In the wake of the Amritsar massacre of 1919 Mahatma Ghandi called on students to boycott government run educational institutions in resistance to the British regime. Fiercely opposed to the ‘evils of foreign rule’ a young man called Khwaja Abdul Hamied responded to the call in staging a student strike at his university – an institution called Muir Central College in the city of Allahabad in the north of India.

As a result of the strike, Hamied was expelled from university. At the insistence of his father, the young rebel was sent abroad to study chemistry in Berlin, where he spent his time researching barium compounds. It was here that his life was transformed.  

While on holiday in Germany in 1925, Hamied met a young woman called Luba Derczanska – a Lithuanian Jewish chemist who was also studying in Berlin. Their romance blossomed and the couple married in the Berlin’s only mosque, in 1928. Derczanska – who was active in communist circles – introduced Hamied to socialist thought.

After a brief stint working in a soap factory, Hamied began his journey home, travelling on a boat to Sri Lanka from Marseille. It was during this trip that the now 30 year old Hamied decided on his future career. With the knowledge he had gained through his studies, and the practical skills he had developed through his work in factories, Hamied set himself the task of building India’s pharmaceutical industry.

This was easier said than done. For six years Hamied sold typewriters, sewing machines and the erectile dysfunction drugs Okasa Silver and Okasa Gold. However he persevered and eventually set up Cipla in 1935. Today Cipla is one of the biggest generic drugmakers in the world.

While the company struggled for a number of years, Cipla eventually became profitable and Hamied became rich. The wealthy industrialist did however carry with him the revolutionary ideals he had developed as young man, as he transformed Cipla into the progressive firm we know today.

Hamied and Derczanska’s revolutionary fervour was passed down to their son, Yusuf Hamied, who took over the company in 1972. Having inherited his father’s defiance towards ‘foreign rule’ and his mother’s socialist ideals, Yusuf Hamied declared war against big pharma in 2001, announcing that Cipla would offer antiretroviral HIV drugs for $1 dollar a day, at a time when big multinationals sold the three drug cocktails at a price of $12,000 a year.

Since taking over the firm, Yusuf Hamied has dedicated his life to supplying life-saving drugs to poor patients in the third world. “My whole fight today, for the third world, is for access to medicine at affordable prices,” Hamied said.

Companies like Cipla continue to supply cheap generic drugs to millions of patients across the globe. However the generic drug industry has been transformed. Today generic drug companies form a multibillion dollar industry driven more by the pursuit of profit than humanitarian aims. 

Generics boom

Investigative journalist Katherine Eban, whose recent book Bottle of lies: The inside story of the generic drug boom “exposes rampant fraud in the overseas manufacturing plants that make generic drugs,” explained: “The generic drug industry… really exploded around the time of the AIDS crisis. The issue was there were all these medicines that could treat AIDS but they were very costly and protected by patents. A fellow named Yusuf Hamied, the CEO of Cipla, made an offer to the world that he could make the drug for a dollar a day.”

“That offer galvanised a number of politicians and governments to come together and to ultimately get the price down to $0.38 a day. So the Indian companies became the rescuers of many of the poorest patients in the world, in Africa and elsewhere, who were dying of AIDS.”

“As western governments began using taxpayer dollars to buy those drugs to treat Africans, there was a realisation that if our own regulators are approving those drugs to send to Africa, we can take them too. So there was a real transformation of the reputation of the generic drug industry.”

“This led to what I call the generic drug boom. As developed markets began to buy generic drugs from India and China in huge volumes, there was a massive incentive and massive profit motive for these companies to be first to market and to gain market share.”

This reputational shift coincided with the introduction of new laws which made it easier for generics to be approved by the FDA. In 1984, US legislators Henry Waxman and Orrin Hatch introduced the ‘Drug Price Competition and Patent Term Restoration Act’. The act sped up the process through which generic drugmakers could get marketing approval for their drugs.

“The 1984 Hatch-Waxman act really ignited the generic drug industry. It said OK, we’re going to give you a special pathway inside of the FDA whereby you can do an abbreviated drug application. You don’t need to do clinical trials; you don’t have to prove safety and efficacy. You just have to prove your drug is bioequivalent, meaning it reaches the same absorption in the blood. We’ll even add in a deal sweetener: if you’re the first to submit your application to the FDA you get what’s called ‘first to file’. That means you get six months exclusivity on the market meaning you can charge around 80% of the brand name price. That set off this gold rush of companies trying to be first to market.”

The introduction of the Hatch-Waxman act led to “generic drug executives literally camping out in the FDA’s driveway in order to be first through the door,” Eban said. “There was huge amounts of money to be made. That led to some unscrupulous generics companies, fabricating data, making it appear that they knew how to make the drug, getting permission first, and then going back to their laboratories to figure out how to actually manufacture them. So you had untested drugs – drugs that were not bioequivalent – entering the market and reaching patients, before the companies in question actually knew how to manufacture them.”

“This is not just little shortcuts. This is wholesale fabrication of data which cuts right to the heart of whether the drug is what it claims to be,” Eban said. “In my reporting I have exposed that these companies literally employ data fabrication teams... They fabricate documents, shred documents, and then age these documents overnight in a steamy room to make them look old.”

The Jungle

In his 1906 novel The Jungle, American writer Upton Sinclair exposed the perilous conditions of the meatpacking industry. The book told of gruelling work, poor sanitation and even claimed that workers who had fallen into rendering tanks had been turned into lard. Within a year of being published Sinclair’s novel prompted the establishment of the FDA.

As reported by Eban, “one pharmaceutical executive” described India’s generic drug manufacturing sector as “the 21st century version of The Jungle by Upton Sinclair.” “These facilities are horrible. They’re dangerous to human health, under-regulated,” Eban said.

According to Eban, “This is a failure of the international regulators to really deal with this… Part of the problem is that the FDA is trying to be a lone policeman in a fundamentally unregulated market. The regulators in India in large part see their role as defending the industry. They are not collaborating with the FDA in a meaningful way to improve drug quality.  The nexus between the regulators and the industry is so tight you can’t break it.”

In the cases of “many of the problems that the FDA has exposed in India, there has been no follow up from Indian regulators. American prosecutors got Ranbaxy, which was once India’s largest drug companies, to plead guilty to seven felonies related to data fabrication in the US. There were never any sanctions against Ranbaxy from Indian regulators. There is a mind-set among some of the companies there that what they need to do is fool western regulators. They’re not worried about their own regulators.”

According to Eban the FDA needs reform. “First of all, no honour system,” she said. “The data that they are relying on for approvals – a lot of that data is worthless, fabricated data. They need a way to inspect and verify the actual content of the drugs. They need unannounced inspections and they need surveillance testing of these drugs.”

“The FDA loves to talk about how good manufacturing practice and quality is a universal language but it’s not,” Eban added.  “Making a profit is a universal language.”

Developing countries and AMR

Since taking over Cipla, Yusuf Hamied has dedicated his life to ensuring patients in poorer countries have been able to access the drugs they need. As a result, Cipla’s generics have saved millions of lives. Today however, the generic drug industry knowingly sells dangerous, substandard medicines to vulnerable patients in the developing world. When questioned over the practice of selling poor quality medicines to patients in Africa, the medical director of one company responded in asking “who cares? It's just blacks dying.”

“It is very typical within the generic drug industry for companies to make different levels of quality drugs for different markets,” Eban said. “You would think a drug is a drug. You have to make Lipitor the same anywhere in the world. In fact what these companies do is adjust the levels of quality, the amount of active ingredient, and the manufacturing steps, for the market they’re selling into. They sell better drugs to markets with the most vigilant regulators and their lower quality drugs into markets where they have little to fear from regulators.”

“One of the stories I highlight in the book is the story of a boy in Uganda who died from a meningitis infection despite being given antibiotics,” Eban recounted. “[The antibiotics] were later tested and found to have much less active ingredient than was required to cure him. So the good news is suddenly Africa is flooded with generic drugs that they can afford. The bad news is that many of those drugs don’t work.”

Substandard medicines are also believed to play a major role in the crisis of antimicrobial resistance (AMR). As of 2017, an estimated one in ten medical products in low- and middle- income countries was believed to be either substandard or falsified, according to research from the World Health Organization (WHO). Thus, due to the fact that AMR can occur when pathogens are exposed to sub -therapeutic doses of antibiotics, poor quality generics with sub-therapeutic doses may be fuelling resistance around the world. In essence, low doses of antibiotics – which kill only the weakest bacteria – allow the toughest and most resistant to thrive. 

As expanded upon by Eban “This has had pretty alarming health consequences for us all. Experts are now looking at the relationship between substandard generics and drug resistance. You have an entire continent where people are routinely being under-dosed with poor quality antibiotics. You end up with drug resistance.  A lot of the public health experts fear they’re a big contributor.”

“It’s still in a young stage of research but scientists have tracked an overlay between geographic areas where there’s a high concentration of substandard generics and the development of drug resistance there – and we all know drug resistance spreads. As soon as someone gets on an airplane it’s everywhere, so it has an enormous public health impact for the entire world.”

The elephant and the dragon

The economies of India and China have boomed in recent years. The rapid growth in these countries has seen global power shift eastwards, as both economies move towards becoming the biggest economies in the world.

The conditions that have allowed for such rapid growth, in turn allowed India and China’s respective generic drug industries to thrive. As expanded upon by former-GSK exec Andrew Rut: “You’ve got very loose patent legislation. You’ve got a pool of very bright people. You’ve got teams of people who are scientifically trained. There’s very strong healthcare and IT sectors, particularly in the Indian market – and they speak English. English is the business language of India. You have people who have worked in western companies, either in the West or in western companies in India, who went over and set up their own organisations which became pretty dynamic. So a lot of the outsourcing went to India.”       

This rapid growth also relied on deregulation and the ability to keep costs down. “We in the West want the best of all worlds,” Rut said. “We want really cheap products, made ethically, to a very high standard. That’s impossible. Whether it’s clothes, cars or medicines you can’t cut costs to a bare minimum without something suffering. So the drivers of cost reduction by the West have motivated generic manufacturers to pursue a race to the bottom – and it’s an unsustainable race.  In the end pharmaceutical products have to increase in price because there’s a base price you can’t go below.”

Thus, as said by Rut, the unscrupulous practices of Indian drugmakers are being “driven by us.” Eban agreed in suggesting that high drug prices had fuelled demand for bargain basement generics in Europe and the United States. “In the US we desperately need regulation of brand name drug prices. It is precisely our failure at regulation that has pushed us into the arms of low cost providers,” Eban said.

“We absolutely need generic drugs. The world needs them. We can’t afford brand name drugs for aging populations. Huge swathes of the planet can barely afford generics as it is. But we need generics to be of a high quality,” Eban added.

Part of the problem, according to Rut, is that India and China’s rapid growth has outpaced the underfunded and overstretched regulators responsible for keeping things under control. “The rapid growth of these economies means that inevitably, either the regulator is overworked and understaffed, or there’s a degree of corruption that occurs between the regulators and the companies. It’s a bit of both. You’ve got an understaffed system with underpaid employees who are more liable to corruption.”  

The solution, according to Rut, involves giving “the investigators tools that enable them to remotely understand what’s coming out of the pharmaceutical companies or manufacturing sites. To better equip them and better enable them to target which ones to inspect.”

Diagnosing the drug supply

All in all, Eban was clear in stating: “I would say to your readers that they should read the book. There are various claims out there that the book is anti-generic or pro-brand name. That’s not accurate. I’m an investigative journalist who has uncovered true conditions that have enormous health consequences.”

However, in her final message to the doctors and pharmacists who prescribe generic drugs, Eban suggested: “Instead of simply increasing the dose or switching to a different treatment plan, doctors and pharmacists need to consider whether a substandard generic is playing a role in the failure of the patient to get better… they have to diagnose the drug supply.”

Louis Goss

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