What is the extent of spurious medicines in India; 0.04% or 30%?

The study done by Ministry of Health was based on incognito shopping of random medicines at 6,000 chemists. The question is whether any chemist will keep spurious drugs openly on shelf?

There are number of spurious and fake drugs being sold across India but while the government says there are only 0.04% drugs in the market that can be labelled as spurious, the industry claims that it could be anywhere between 10% to 30%. The wide range from 0.04% to 30% is because of dispute in definition of 'Counterfeit'.

Speaking at the 4th International conference on 'Counterfeiting and Piracy' organised by Confederation of Indian Industry (CII), Tapan Ray, director general, Organization of Pharmaceutical Producers of India (OPPI) says, "Government finds only 0.04% medicines as spurious in India. The study done by Ministry of Health was based on incognito shopping of random medicines at 6,000 chemists. The question is whether any chemist will keep spurious drugs openly on shelf?"

He said, "Anything that is not genuine is counterfeit. Section 17 of Drugs and Cosmetics act 1940 specifies that spurious, adulterated and misbranded are counterfeits."

To fight counterfeits, Mr Ray has suggested three-pronged approach: legal enforcement, consumer awareness and deterrent to seller, and technology to differentiate between genuine and fake. 

A few years ago, there was question if generic medicines can be termed as counterfeits. The dispute was finally resolved by courts. Pratibha Singh, managing partner, Singh & Associates, says, "Generic drugs are not counterfeits. A look alike, similar name is misbranding and considered to be counterfeit. There is need for interface between Trademark office and Drug Controller General of India (DCGI) to stop similar brand names from being approved. Sometimes manufacturing license is for one drug and different drug is produced which is also counterfeit. For example Cadila Healthcare and Cadila Pharmaceuticals are two different companies with similar name and we need to understand that drugs licensed by Cadila Healthcare cannot be manufactured by Cadila Pharmaceutical."

The wide definition of 'Counterfeits' needed clarification regarding third party manufacturer's dubious actions. Even the regulators look at counterfeit drugs from different perspective. Dr Praful Naik, chief scientific officer, Bilcare Ltd said, "Regulators do not agree on definition of counterfeits. Many pharmaceutical companies manufacture drugs at third party facilities. When the pharma companies squeeze margins, third party manufacturers resorts to diverting additional production to market without original manufacturer name and selling at lower price because of lack of marketing costs. These are legal counterfeits."

Dr Naik also expressed concerns about expired drug diversion. The illegal expired drugs recycling racket is operational and can harm consumers.

What makes counterfeit drugs different from other counterfeit products like electronics, consumer goods is that these drugs are even capable of killing someone. Vince Suneja, commercial attaché, market access and compliance at the US Embassy in India, said, "Drugs have become commodity which can also kill.  There is need for consumer awareness and need to question regarding medicines source, supply chain, medicine approval and prescription. Everybody thinks they know business. The most expensive drug may not work. What is the acceptable level of risk?"

With so much confusion about what can be labelled as  'counterfeit', Moneylife decided to take opinion from someone who was not present at the CII seminar. Dr Chandra M. Gulhati, editor, Monthly Index of Medical Specialities told Moneylife, "The so-called problem of fake drugs has been hyped up by multi-national companies (MNCs) with a helping hand from World Health Organization (WHO). Many studies, both by the government agencies and non-government organisations (NGOs) confirm that the maximum quantum of fake drugs is 0.35% or Rs90 crore of the total drugs market. The WHO had given a very wide definition to counterfeit drugs which included so-called 'unauthorised' copies of patented molecules. Counterfeit means a brand name has been used without authority while fake means the product does not have the labelled active ingredient. These are two entirely different issues. However interested MNCs have confused the world by equating counterfeit with fake."
Let us hope the technologies to fight counterfeits are not as confusing as the definition of 'Counterfeits'.

In the second part of this two-part series, we will examine the technology options to help fight the menace of counterfeits, and not just in Pharma industry.

Arjun Guha
1 decade ago
The basis of discussions on counterfeits is based on drug diversions, which may not highlight the intercompany transfers of medicines at stockist level, wherein stockists are unaware of the COGS and other business terms. Although technological solutions are available from private companies, these solutions are not validated and are stand-alone. Therefore, before incorporating such silo solutions, pharmaceutical companies needs to first carry out a comprehensive computer systems validation of their existing ERP and then validate the proposed solution and also the interfaces. Reliability of customized solutions which are not integrated with enterprise solutions like SAP, Oracle etc. poses a potential IT risk. Therefore, although the technical solutions of counterfeit exists, such solutions needs a thorough evaluation by each pharma company. Maybe the FDA & MOEHF should set up committtes to evaluate COTS solutions and provide some direction to the pharma manufacturers, which is acceptable to the D&C Associations and the CFAs.
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