On the rare occasion that the captains of the Indian pharma industry accept that there are problems with the quality of medicine being produced in the country, they lay the blame at the doorstep of the small pharma companies. We are told that it is only the fly by night operators who responsible for giving the entire industry a bad name. This is however not true.

It is altogether a different matter that legally, small manufacturers have no legal obligation to prove that their product is therapeutic in the first place in order to obtain a license to make drugs. And it is a well known fact that even large companies use these small to medium manufacturers as “loan-license” facilities, where they outsource their manufacturing for what are called “less regulated markets” which includes India. These small to medium manufacturers often obtain their manufacturing licenses from State Licensing Authorities (SLAs) which are ill-equipped to regulate the product these companies make because of both sheer competence and political patronage. Therefore, these small to medium companies become easy targets in the industry’s propaganda to divert attention from their own compliance issues, much like what the industry does to divert attention toward counterfeit (Spurious) drugs; when the real problem in India is not spurious, but sub-standard drugs.

During the course of our research over the last year, we’ve come across a number of big names among the Indian pharmaceutical industry who have been involved in manufacturing and selling of sub-standard drugs to the people of India. To avoid allegations of bias or prejudice, we will limit this discussion to the names of only those companies which have been blacklisted by government departments. Let me first explain how these blacklists are compiled.

In order to bid for tenders put out by government agencies, it is necessary for pharmaceutical manufacturers to register themselves with the agencies in question. Most of these manufacturers can register only if they meet certain qualification criteria such as minimum annual revenue; the presumption amongst the procurement departments in these agencies is to correlate high turnover to the ability of the manufacturer to employ better quality control in their manufacturing process.

After medicine is procured and delivered, most government agencies will draw samples from each batch and have them tested at independent laboratories. If a batch tests as sub-standard during these tests, the supplier may be ‘de-registered’ or ‘blacklisted’ from bidding for future contracts for a few years or permanently. The degree of punishment under blacklisting/deregistration norms depends on the quality of the defect in the product they procure. A firm can also be blacklisted for failing to deliver on time or for not fulfilling the tender conditions but most of the cases discussed below are very likely related to quality issues. Unfortunately, not all the blacklists discussed below provide exact reasons for blacklisting a company, but amongst the lists which reveal the reason, the quality issue is the main reason for this punitive action.

One can access the blacklist of the Medical Stores Organisation (MSO), which conducts public procurement for the Ministry of Health here. There are several ‘big names’ on this list; which means that they cannot supply the products for which they have been blacklisted. Zest Pharma, USV Ltd., Unichem Lab Ltd., Nestor Pharmaceuticals, Zee Laboratories, Alkem Laboratories Ltd., Abbot Healthcare Pvt. Ltd., Centaur Pharmaceuticals are some examples of big names in the India pharmaceutical industry in this list; with several of these companies even exporting drugs to other countries across the world. Even public sector pharmaceutical companies, which function under government control are on the list: Hindustan Antibiotics Ltd., Bengal Chemicals & Pharmaceuticals and Karnataka Antibiotics & Pharmaceuticals Ltd. IDPL (Tamil Nadu) figure prominently. Several of these firms were blacklisted for ‘Category A’ defects – which are the most serious kind.

A second revealing blacklist is that of the Western Railways. The list which can be accessed here is slightly dated but it still features several big names: Ind-Swift Ltd., Alkem Laboratory Ltd., Themis Medicare Ltd., Akum Drugs & Pharmaceuticals, Natco Pharma, Macleods Pharmaceuticals, Glenmark Pharmaceuticals, Perennial Medicare, Zydus Healthcare. A more recent blacklist of the Northwestern Zone which was procured by us under the RTI Act, lists RPG Lifesciences (blacklisted for Atorvastatin), Biocon & Swiss Garnier Life Sciences (blacklisted for Rosuvastatin). The list can be accessed over here. The blacklist maintained by the North-East Railways features names like Abbott Healthcare, Sandoz Pvt. Ltd., Ind-Swift, Alkem Laboratories Ltd., Alembic Pharmaceuticals and others. The list can be accessed over here.

The blacklist maintained by the State Government of Orissa and Rajasthan can be accessed over here and here. The blacklists maintained by the Tamil Nadu Medical Services Corporation and the Gujarat Medical Services Corporation Ltd. can be accessed over here and here. The West Bengal government’s blacklist can be accessed over here. All of these lists feature several big names from the Indian pharmaceutical industry.

These lists are but an example of the blacklists maintained by government departments across the country. Unfortunately, several organisations like the Railways do not maintain a consolidated list – instead each railway zone maintains its own blacklist list. Why the procurement departments within the same organization (Indian Railways) do not benefit from this lack of sharing of information is a sad situation.

So the next time somebody claims that it’s the small companies muddying the waters for the entire industry, I hope you point them to the blacklists maintained by public authorities within the Indian government itself.  The industry’s propaganda machine is very effective; it has created a false narrative that the small and medium size companies are the root of the problem; you can see for yourself what the reality is.