The U.S. Food and Drug Administration (FDA) has tightened checks on its approval process for India’s $15 billion a year drug industry, which is still rebuilding its image in its largest market, the United States, following a high-profile case in which the U.S. Department of Justice fined Indian firm Ranbaxy $500 million for drug safety violations.
The Central Drug Standards Control Organization (CDSCO), India’s version of FDA, announced it will appoint 147 new drug inspectors by the end of 2015. An additional 1,195 posts have also been authorized under the 12th Five Year Plan of the Government of India.
India’s pharmaceutical industry supplies approximately 40 percent of the over-the-counter and generic prescription drugs consumed in the United States, so the increased scrutiny could have profound implications for Indian pharmaceutical companies and U.S. consumers.
Could Increase Prices
An increase in manpower for India’s national drug regulatory agency may seem like a very efficient and practical method to ensure the quality of drugs manufactured for use in India and for export to world markets is on par with global standards, but the reforms could also lead to increased health care expenses if proper protocols are not developed, says D. Dhanuraj, chairman of the Centre for Public Policy Research (CPPR) in India.
It could also lead to harassment and arbitrary decisions by government bureaucrats and prohibitive investment costs that deter smaller players from entering the sector, Dhanuraj says.
“CDCSO should be an independent agency, detached from political and bureaucratic controls,” Dhanuraj said. “The policy decisions of the government should not be the job of CDCSO.”
Picking Winners and Losers
One need only look to the threat FDA poses to U.S. businesses to see why expanding CDSCO’s regulatory authority is a bad idea for Indians, said Rituparna Basu, an analyst for the Ayn Rand Institute.
“Both agencies exist fundamentally to decide which medical drugs and treatments individuals are allowed to take and which they are not,” said Basu. “But this is a decision that properly should be left to individuals to make with their physicians.
“The government’s only role should be to define and prosecute real cases of medical fraud, malpractice, and criminal negligence,” Basu said.
Regulatory System is Outmoded
Drug inspectors are a 19th century method to deal with a 21st century challenge of quality assurance, says Parth Shah, president of the Centre for Civil Society (CCS), a pro-free-market think tank in India,
“The government does not send meter readers every month to prepare bills for water and electricity consumption anymore,” Shah said. “It’s time the government used India’s IT power to design a non-intrusive, more accurate, and timely method of collecting drug quality data. Technology allows government or any other third party to monitor quality in real time. Let’s bring the governance of the pharmaceutical industry into the 21st century.”
Says Cooperation a Welcome Step
Joint FDA-CDSCO workshops were held in four Indian cities in May 2014, covering topics relevant to FDA regulatory requirements, such as process validation, enforcement, and computer system validation. More than 60 pharmaceutical companies participated in the workshops.
“The cooperation between CDSCO and FDA is a very welcome step,” said Barun Mitra, founder and director of the Liberty Institute of India. “It is perhaps a reflection of the seriousness with which the regulator and the industry in India have begun to take note of quality issues that have dogged some of the major Indian companies lately, particularly those who are seeking to export to large lucrative markets in the developed countries.
“Apart from regulations and policing, what is also needed is a huge shakeup in the Indian domestic pharmaceutical sector that allows a degree of rationalization, greatly reducing the number of manufacturers while increasing competition and incentivizing research and development,” Mitra said.
D. Brady Nelson ([email protected]) is a columnist with Townhall.
Devon Herrick, “FDA Policies Are Needlessly Driving Up Costs of Generic Drugs,” The Heartland Institute, May 25, 2015: http://news.heartland.org/newspaper-article/2015/05/25/fda-policies-are-needlessly-driving-costs-generic-drugs