No placebo, just fake

It’s a bitter pill for an industry that’s also battling price restrictions. The market for fake and counterfeit drugs in India doesn’t just exist, but is booming. According to a study conducted by the New Delhi-based trade body, ASSOCHAM (Associated Chambers of Commerce and Industry of India), fake drug sales may be fetching as much as Rs 15,000 crore a year—the legit pharma industry, in comparison, had domestic sales of Rs 28,000 crore in 2006-07.

Worryingly, the biggest centre of spurious drugs seems to be the national capital region, which includes Delhi and its suburbs of Gurgaon, Faridabad and Noida. Says D.S. Rawat, Secretary General, ASSOCHAM: “It is a growing problem and estimates indicate that (fake drugs) constitute nearly 25 per cent of all drugs sold in NCR.”

It is quite likely that ASSOCHAM’s figures are some way off the mark. “No systematic study has been done to measure the extent of counterfeits in the Indian market and most figures that appear in press reports are guesstimates,” says Ranjit Shahani, Vice Chairman & Managing Director, Novartis India. Just the same, spurious drugs can be fatal and their trade must be nixed. For starters, though, the government must identify their centres of production.

Apparently, that’s an open secret. “While the problem of counterfeit drugs is spread all over the country, it appears to have a stronger presence in the northern belt,” says Shahani. Adds Utkarsh Palnitkar, Partner and Industry Leader (Health Sciences), Ernst & Young, India: “While all generics (branded and non-branded) can be counterfeited, typically, it is the non-branded generics (ampicillin, paracetamol, etc) that are widely counterfeited in the country.”

What drives the trade in fake drugs? Most experts see a lack of adequate regulations, shortage of drug inspectors and a lack of lab facilities to check the purity of drugs as the key reasons. Therefore, anyone who wants to make spurious drugs can do so without fear of getting caught. Novartis’ Shahani also points to another problem that may be fuelling the boom. He suspects that following the implementation of Schedule M (for Good Manufacturing Practices), many small manufacturers have been disqualified by the Food and Drug Administration. “Since these units have the machinery and technology to manufacture drugs, there is a likelihood that such units will be tempted to take recourse to alternative methods to earn a livelihood,” says Shahani.

Lacking resources to nip fake drugs in the bud, the government could come up with harsher regulations to punish counterfeiters. But here again, it seems to be waffling. There is a Bill No. LIV of 2005 to amend Drugs & Cosmetics Act, 1940, that proposes to increase the minimum term of imprisonment to 10 years and the minimum fine to Rs 10 lakh or three times the value of drugs confiscated (whichever is more) and make the offence nonbailable.

Problem? The bill has been hanging fire since May 2005. Says Shahani: “The key responsibility lies with the government, which must formulate appropriate policies and laws and have an enforcement organisation that works relentlessly to control the problem.” Industry on its part, Shahani adds, must devote resources to monitor the trade and build awareness among consumers.

— E. Kumar Sharma