Counterfeit Drugs : Problems and Solutions for the Indian Pharmaceutical Industry

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Counterfeit Drugs
Problems and Solutions for the Indian Pharmaceutical Industry Introduction
Counterfeit drugs have been around for much of the recent history of industrial-scale drug production in India and abroad. Although detailed data on counterfeit medicines are difficult to obtain by virtue of its very nature, a recent WHO report estimates the prevalence to be around 1% of sales in developed countries to over 10% in some developing countries1. The more important aspect of this global problem, according to the WHO report, is that while such estimates are only meant to provide insight into the problem, the occurrence of even one single case of counterfeit medicine is simply unacceptable to society. In addition to placing patients’ health at risk and undermining public confidence in medicines, the presence of counterfeit drugs exposes the vulnerability of the pharmaceutical supply chain and therefore jeopardizes the credibility of the entire industry. The problem of counterfeit drugs in India is now well recognized by most pharmaceutical companies, government authorities, and the general public. The purpose of this article is to review extant information on this problem, discuss a number of critical issues, and explore the implications for the Indian pharmaceutical sector. However, a mere listing of a set of problems is unsatisfying without discussion of potential solutions. The second part of this article will review the options available to the pharmaceutical industry to combat this problem.

What are the problems?
1) National reputation — India is a major producer of counterfeit drugs The production of counterfeit
drugs in India has led to significant
negative publicity around the world. A
simple internet search yields many
articles in the mainstream media about
the abundance of counterfeit drug
production in India and its harmful
effects. Although much attention has
been placed on specific examples where
a particular counterfeit product has
produced harm and even death, the
recent trend in newspaper and television
reports in the Western media point to the
general and pervasive problem of
counterfeit drug production in India.
A recent report by the European
Commission has singled out India in this
regard2. The 2006 EC report was based
on data gathered from actual customs
seizures at European borders. The
report states “in the medicines sector, India is the number one source, followed by the United Arab Emirates and China” (Figure 1). Of interest is the fact that India was not named as a key source for any of the other counterfeit goods reported in this study, such as cigarettes, perfumes, food products, etc. The EC report goes on to state that the flourishing pharmaceutical industry in India along with lax export oversight was primarily responsible for this problem. One of the key problems that counterfeit medicines pose, therefore, is the damaging national reputation that is emerging for India and its pharmaceutical industry. It is for this reason that the DCGI and other Indian authorities have become engaged in this issue with a stated resolve to combat the scourge of counterfeit drug production in India.

2) Brand protection
Accompanying the problem of national image is another that hits closer to home for Indian pharmaceutical companies — the bottom line. Counterfeit drugs can pose significant financial loss for the brand owner, a fact that has led some major companies to recently launch aggressive efforts to change their manufacturing formats or introduce measures that make if more difficult to introduce counterfeit variants of their products.

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Pharmaceutical companies make major investments in R&D, clinical trials, manufacturing, and marketing. Thus, the investment in both time and money needed to introduce a new brand is substantial. And yet, the moment a batch of products leaves the manufacturing facility, it enters a vast supply chain where it is vulnerable to the entry of...
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