Much to the chagrin of the Indian pharmaceutical industry and patients alike, fake drugs are everywhere. Successful brands are being faked and sold on an unprecedented scale in India. So much so that fake allopathic as well as homeopathic medicines are estimated to occupy between 15 to 20% of the Rs 40,000 crore Indian pharmaceutical market.
Originally, fake drugs were confined to lifestyle drugs such as Viagra or conventional medications for cold, cough and fever. Nowadays, they have made a smooth transition to lifesaving drugs as well. Their presence spans across a wide spectrum?AIDS/HIV therapy, antibiotics, insulin, cholesterol drugs, hormone replacement therapy, cancer drugs and many more.
Recently, enforcement officials of the European Union seized a consignment of fake drugs, which included not just Viagra but also other serious medicines such as anti-cholesterols, anti-osteoporosis and anti-hypertensives. In India, there exists a high demand for these fake drugs as these are available at 40% of the original price and are easily available in the market. Naturally, the domestic pharmaceutical industry is worried as it undergoes both tangible (loss of revenue, profits) and intangible (credibility, reputation) losses due to counterfeit drugs.
?When it comes to drugs and medicines, spurious products can have lethal consequences on public health,? says Ramesh Adige, president, Ranbaxy. He adds that production and sale of fake, spurious or counterfeit medicines has to be countered with a heavy hand.
According to Frost & Sullivan analysts, the business of selling fake drugs is a burgeoning global industry, estimated to grow 13% a year to reach $75 billion by next year, a 92% increase from 2005. World Health Organisation (WHO) estimates that as much as 10% of the world?s drug trade?25% in poor countries?consists of fake medicines.
Fakes have been sold around the world, including the United States, China, Russia, and India where the death penalty was recently recommended for those who make or sell counterfeit drugs. However in developing markets like Asia and Africa, the problem is more severe due to highly fragmented drug manufacturing and distribution infrastructure and absence of a robust legal and regulatory system, informs Sanjay K Singh, associate director, corporate finance, KPMG India.
?The menace is more profound in smaller cities and rural areas as these often lack the required surveillance at wholesaler and retailer outlets. Also, low education levels and lower purchasing power play a role,? says Singh. In India, conventional drugs are counterfeited more as they are often purchased over the counter without a doctor?s prescription. These fake medicines can contain anything from a placebo (inactive substance) to a harmful substitute. They do not provide the intended therapeutic benefit to the patient and many times cause significant adverse reaction leading to loss of life.
According to Natco Pharma officials, when patients receive counterfeit medicines, they are subjected to multiple risks. These drugs can harm the health as the lives of patients are put at risk of adverse effects from unprescribed medicines or substandard ingredients. In particular, counterfeit anti-microbial drugs are a threat to public health with many devastating consequences for patients, increased mortality and morbidity and emergence of drug resistance.
No wonder, controlling spurious drugs is an international challenge today as these products have entered healthcare systems of several countries. Industry sources inform that till recently, a producer of a fake drug in India, on conviction, could get away with imprisonment of five years and fine up to Rs 10,000 only. This was not a strong enough deterrent and desired amendment in the law.
Recently, the ministry of health and family welfare has initiated the amendment of the Drugs & Cosmetics Act, 1940 to provide stricter penalties. The Bill has been passed in both the houses of the Parliament and its enactment is awaited. The Bill contains stringent provisions for those engaged in manufacturing spurious and fake drugs, such as a maximum penalty of life imprisonment and a fine of not less than Rs 10 lakh or three times the value of drugs confiscated, whichever is higher.
Singh informs that globally, pharmaceutical companies have used several technological measures such as innovative packaging designs, bar coding and radio frequency identification (RFID) chips to arrest the menace of counterfeit drugs. The US Food and Drug Administration (USFDA) and other drug regulators are pushing for the adoption of RFID hardware and software throughout the pharmaceutical industry to combat sales of fake drugs.
The revenue from the healthcare and pharmaceutical industries investing in RFID technology will rise from $370 million in 2004 to $2.3 billion in 2011, say Frost & Sullivan analysts. Several pharmaceutical companies in the US and Europe are already conducting pilots on the use of this technology. While for Indian pharmaceutical companies, adoption of RFID technology is not high on the agenda, stronger vigilance across drug wholesalers, warehouses, supply chain and retail points could go a long way in curbing this fast growing menace plaguing the pharmaceutical industry.