By

Dinesh Thakur and Prashant Reddy T.

On March 25, 2023 the Economic & Political Weekly (EPW) published a review of our book – The Truth Pill: The Myth of Drug Regulation in India by Dr. Anant Phadke, a co-founder of the All India Drug Action Network and a trustee of Low Cost Therapeutics (LOCOST), a pharmaceutical manufacturing enterprise based out of Baroda, Gujarat.

This book review is problematic for many reasons, the most obvious one being the fact that EPW has not made some key disclosures. For instance there is no disclosure in the review that Phadke and his fellow activists are a subject of critique in our book because of the very obvious conflict of interest they face in their dual roles at trustees of LOCOST and co-founders AIDAN. Would a public health activist advocate for stricter punishment for the manufacturers of sub-standard medicines if the activist was also sitting on the board of a pharmaceutical manufacturer? Most definitely not; and Phadke is the perfect example as we will demonstrate in this piece.

A second disclosure not made in the review, is that our book has pointed out how LOCOST and Srinivasan (co-founder of AIDAN) have been convicted by a Chief Judicial Magistrate, Pune for the crime of manufacturing sub-standard drugs used for treating hypertension. LOCOST’s drugs were found to have only 36.5% of the active ingredient mentioned on the labelling. Untreated hypertension can cause strokes and heart attacks. The punishment that followed the conviction was quite paltry. The court imposed a fine of merely Rs. 10,000 and simple imprisonment till the rising of the court. This, when the law requires a minimum of one year punishment unless there are “special” reasons, which the magistrate has to justify in writing. As we have pointed out in our book, LOCOST is not the only beneficiary of this lenient sentencing policy – this is a standard sentencing practice in at least Maharashtra, Karnataka and Tamil Nadu. To have a trustee, like Phadke, of an enterprise convicted of manufacturing substandard drugs, actually write a review of a book on drug regulation without disclosing the fact of the conviction is a serious breach of editorial ethics on part of EPW. But it gets even more problematic. In his review, Phadke mocks our criticism of such lenient sentencing practices. He states in his review:

“But the authors unjustifiably deprecate that many judges use the proviso in the current Drugs and Cosmetics Act (Section 27) of punishment for less than a year (“if the court feels for adequate and special reasons to be recorded”), including punishment of “imprisonment till the rising of the court.” They seem to imagine that they have a better understanding of justice than all the concerned judges.”

Our criticism, unlike Phadke’s understanding, was grounded in the standards laid down by the Supreme Court in a series of precedents where the court discussed the meaning of “special reasons” and criticised the general leniency shown by magistrates towards white collar crime. (p. 102-103) In all the judgments we came across in our research, including the LOCOST case, the criteria laid down by the Supreme Court was never met.

Even more astonishing are Phadke’s views on criminal penalties for the manufacturers of sub-standard drugs. He claims that our demand for prosecution of every case is unjustified because manufacturing defects are known in every industry and that any prosecution should be preceded by an investigation to establish whether there was criminal intent, mala-fide intention, negligence, genuine mistake or incompetence. Manufacturing defects in the case of drugs have serious consequences for the health of patients and cannot be compared to other products. More pertinently Section 27(d) of the Drugs & Cosmetics Act, 1940 requires absolutely no assessment of criminal intent or lack of it. As long as the drug fails quality testing, the manufacturer is to be prosecuted and convicted. That is the law.

Should it be reformed? Yes, there is room for rethinking the nature of criminal punishments, as we accept in our book but until the law is what it is, it should be followed. More worrying is the fact that the pharma industry has been lobbying for complete decriminalisation through the Jan Vishwas Bill – a move that both of us oppose and have written about publicly in the Economic Times. AIDAN on the other hand has maintained silence on the issue perhaps because their co-founders who are on LOCOST’s Board will no longer face the threat of jail time under the new provisons. Without adequate disclosures by EPW, a reader will not fully appreciate this nuance while reading the book review. This is why editorial disclosures are absolutely necessary.

Misrepresenting the arguments in our book

Lack of disclosures apart, there is also the issue of illogical and misrepresentative arguments made by Phadke in his review. For example, he begins with the grand claim that there is a great conceptual confusion in our book when we discuss the issue of generic drugs. He claims that there are two definition of generic drugs – one that deals with drugs that are off-patent and the other is the category dealing with drugs that lack a brand name. He then proceeds to accept that the second category does not exist in India, stating “If the authors imply the second meaning, there are almost no generic medicines in the Indian retail market”. If the second category does not exist in India, why would anybody discuss it? It would be illogical to do so. Leaving that aside, Chapter 6 of the book is crystal clear that we are dealing with off-patent generic drugs.

The other issue that Phadke repeatedly misrepresents in his review is that we are not clear on whether we are criticising Indian or foreign generic medicine. At one point he states: “The authors do not seem to realise that their allegation of Indian generic medicines being “substandard,” also applies to the off-patent medicines made and marketed by the Western MNCs in India.” At another point, he references Indian exports to the US and UK and states “The authors overlook the fact that these manufacturers exporting generics to regulated markets are very much part of the Indian generic industry.” This is a longstanding problem with Phadke and also AIDAN – both seem to view Indian generic companies as saints and foreign MNCs as sinners. On the other hand, our book has never taken this approach of going after either MNCs or Indian companies. It is a fool’s errand, in our opinion, to try and label different companies based on the nationality of their shareholders. This is exactly why our book is not about individual companies – it is about regulatory law and institutions in India. We harp on how India did not have basic regulations for bioequivalence and stability tests for generics drugs because of which much of the medicine made in India could not be trusted. Much of our criticism in the book will not apply to generics being exports to developed countries because those exports are governed by foreign regulations in developed countries, which are generally more rigorous compared to India. 

The most startling misrepresentation in the book review is Phadke’s discussion on bioequivalence testing, since it is this issue that forms the basis of his most serious accusation against us: “Overall, these pages in the book unwittingly serve the interests of the big pharma/MNCs.”

To provide some context, one of the issues we raise with regard to regulations for approval of generic medicine in India, is the fact that bioequivalence studies were not mandatory until recently (2017). Bioequivalence studies evaluate the rate at which drugs are absorbed by the bloodstream of a human. If it dissolves at the same rate or about the same rate as the already approved reference product, it is deemed to be bioequivalent. Not all drugs require bioequivalence testing in humans and some drugs that qualify for “biowaiver” can be tested in laboratories for surrogate parameters. We dedicate about three and a half pages explaining the concepts of biowaivers, starting with the first scientific papers that discussed this concept. We also clearly state that “granting biowaivers could certainly open the door to a more affordable regulatory pathway” but we justify this optimism with detailed caveats on the steps required to make sure biowaivers are effective. 

But if you were to read Phadke’s review without reading our book, you would come away with the impression that we have not even mentioned the word “biowaiver” in our book. In pertinent part, he points to an excerpt we reproduce of an expert committee to make bioequivalence testing compulsory before triumphantly declaring our argument as the “half-truth” because the committee also recommended biowaivers. Nowhere does he mention that we spend three and half pages discussing biowaivers, their acceptability and the issues regarding the government’s failure to clearly identify markers for biowaivers. He repeats this brazen lie towards the end of the review when he states:

“Moreover, the authors’ unscientific, exaggerated, across-the-board insistence on costly, bio equivalence studies (which also implies the use of India’s poor people as guinea pigs in huge numbers) as a precondition for permitting the manufacture of generic medicines”.

Phadke’s entire basis for the above accusation against our work is this out of context sentence that he reproduces in his review “bioequivalence testing for all generic drugs”. His review claims this sentence is on page 215 but we check page 215 and this phrase is not on that page. We presume he meant page 234 where this phrase does appear. But if Phadke was relying on page 234, his allegation is a brazen misrepresentation because that sentence on p. 234 is in context of a paragraph where we discuss how India initially made bioequivalence testing only for those generics in the “new drug” phase approved by the DCGI, while generics approved by states post the “new drug” phase did not require bioequivalence testing. For example, generic Glivec approved by the DCGI in 2004 would require bioequivalence testing but if a different manufacturer sought approval for their generic version of Glivec in 2010 from a state drug controller, they would not be required to submit bioequivalence testing data for approval. How does this make any sense? It is in this context that we make the argument that all generics require bioequivalence testing. Anybody reading that chapter, would come away with that understanding and also understand how we support biowaivers with certain caveats.

The final problem with Phadke’s review and this is unfortunately a common problem with reviews in India, is a complaint that we did not cover topics that he thought were important, namely the political economy of India’s pharma industry and the drug pricing issues in India along with our apparent failure to “appreciate” Indian pharma’s contribution to increasing access to medicine. This is a rather silly line of criticism because there already are books written on these issues. A history of the Indian pharma industry, partly exploring the political economy, was written by Sudip Chaudhari and published by OUP in 2008. On drug pricing, Ajay Bhaskarbatla has written an extensive book that was published by Springer in 2018. So why exactly should we be addressing these issues in a book on drug regulation and quality? The rather unfortunate answer is that several people in this country, especially access to medicine activists believe that is fine to manufacture substandard medicine as long as it improves access to medicine. As we ask rather pointedly in our book, of what use is medicine that does not work to cure disease?

Phadke’s book review and EPW’s decision to publish it without disclosures reflects poorly on both parties. EPW offered to publish a response but we have no intention of doing so because we simply do not trust EPW’s editors to be fair after their failures to make required disclosure about Phadke’s involvement in drug regulation in India. They have so far not accepted responsibility or apologised for publishing Phadke’s review without making the adequate disclosures.

Over the last year, India has witnessed many astonishing approvals granted by its drug regulator CDSCO. Most of these approvals have been wrapped in mysterious legal lingo like ‘restricted emergency use’ and ‘clinical trial mode’ despite Indian law never using such terms. The most astonishing of these approvals is the one granted to Bharat Biotech’s Covaxxin despite the company’s admission that efficacy data from the ongoing clinical trial will not be available until March 2021.

The only discernible reason it appears for this unholy rush in defiance of good science or medical ethics is the government’s obsession with its ‘Atmanirbhar’ agenda which is a version of economic nationalism that has many takers in the country.  

Of course, any criticism of the drug regulator’s whimsical ‘decision making’ process by doctors, scientists and journalists has been met by the establishment’s acolytes, with accusations of ‘vested interests’ and dollops of ‘anti-national’ rhetoric. The Atmanirbhar agenda apparently triumphs public health. None of this surprises me.

Many years ago, when I blew the whistle on Ranbaxy’s fraudulent practices which led to the company’s prosecution by the US government and its eventual guilty plea before American courts, I waited with bated breath to see whether and how the Indian government would prosecute Ranbaxy. After all, much of the fabrication and fudging of drug safety data, that the company pled guilty to took place on Indian soil and people of India were amongst the consumers of Ranbaxy’s adulterated drugs. Imagine my surprise when the then UPA government put out an official press release blaming “vested interests” who were apparently out to destroy the reputation of the Indian pharmaceutical industry. This after the company’s pled guilty to seven counts of criminal felony and paid up $500 million in penalties! A few years later when I filed a petition before the Supreme Court asking for reform of India’s drug regulatory framework, the then Drug Controller General of India is on the record questioning my ‘nationalism’. What does nationalism have to do with a company fabricating quality & safety data for drugs that is selling in India and abroad? Framing the issue of ‘drug regulation’ in the language of nationalism is a dangerously cynical ploy. Drug regulation is about science, medical ethics & patient safety.

The science of how drugs and vaccines work on the human body does not change across borders. After all science is the universal pursuit of truth. History has shown us how new drugs, even vaccines can be dangerous if not tested properly. The thalidomide tragedy of the sixties led to the birth of thousands of deformed babies and deaths of many more. Merck’s blockbuster drug Vioxx was withdrawn after it became clear that the drug increased the risk of heart-attacks and strokes. Rotravirus vaccines, including ones developed in India, have run into trouble because of their alleged association with an increased risk of intussusception in babies. It would be a mistake to presume the safety or efficacy of vaccines without large scale clinical trials. Even with the COVID vaccines, it should be remembered that apart from the Pfizer, Moderna and Astra-Zeneca/Oxford vaccine candidates, most of the other vaccine development efforts in the Western world have run into rough weather and are several months away from approval.           

As for medical ethics, these are principles that have evolved in the light of horrifying tragedies, many of which were due to the evil of men and some due to the inherent risks of experimental science. These include medical experimentation on Jewish women by Nazi scientists like Eduard Wirths, the Chief Physician at the Auschwitz concentration camp during World War II and the Tuskegee syphilis experimentation on African Americans in the United States. Closer to home, we have seen significant violations of ethics during clinical trials for HPV vaccines carried out on tribal girls in Chhattisgarh. In each of the above cases, it was vulnerable communities – Jews, women, tribals, children, African Americans – who have been exploited by not just pharmaceutical companies but also “well meaning” scientists and doctors. Medical ethics exist in the law to protect the rights of these marginalized communities in a deeply unequal world. To ignore medical ethics is to ignore the rule of law.  

India has never had a viable anti-vaccine sentiment unlike countries like the US. The success of national vaccination programs which are largely responsible for eradication of diseases like Polio from the country are a testament to this. Sadly, the preliminary data from the Covid-19 vaccination program is not encouraging. On the first day of the vaccination campaign, Delhi recorded an achievement of 3369 people who got their shots compared to their daily target of 8139. It appears one of collateral damages of this adventurism in the approval process is increasing vaccine hesitancy that we are seeing today; something the country can ill-afford during these trying times.

Inoculating people with vaccine candidates not tested exhaustively for safety and efficacy is a recipe for a disaster. Not only will it adversely affect public health but it will also seriously impact the long-term confidence that the world reposes in Indian science. If anything, it hurts the government’s ‘Atmanirbhar’ mission. Trust in science and experimental medicine is built by regulators following sound science and the rule of law. Nationalism should have no place in such debates. As the saying goes, nationalism is the last refuge of the scoundrel, more so when it is raised in context of drug regulation. Beware of those who wave this flag of nationalism when it comes to the safety and efficacy of medicine that you intend to give your children. The only silver lining in these times are the voices of the many doctors, scientists and journalists who have called the regulator out on its arbitrary decision-making process.  

An abridged version of this piece appeared in The Telegraph on July 27, 2020.

In a break from regular procedure to approve new drugs, the Drugs Controller General of India (DCGI) recently granted an approval to Biocon Ltd. without the mandatory Phase III clinical trial. According to the company, it conducted a Phase II study on a cohort of 30 patients. This therapeutic candidate, Itolizumab is an anti-CD6 monoclonal antibody that was previously approved by the DCGI for the treatment of psoriasis, which is a skin disease. The status of this drug in foreign markets is unclear.

After receiving the DCGI approval, Biocon’s top brass promoted the drug through social media channels and television interviews. Spokespeople for the drug manufacturer used adjectives like “breakthrough drug”, “compelling outcome”, “life-saving”, “unique” to tout the efficacy of this drug in treating COVID-19 during their promotional campaign. It was left to Indian Council of Medical Research (ICMR) to dispute some of these statements in a press conference where its Director General said that there was no evidence from clinical studies to show that this drug reduced mortality amongst severely ill COVID-19 patients.

The DCGI’s actions have raised eyebrows in the public health community because this is one of the few times that the Indian Regulator has approved a drug for a specific indication before the regulatory authorities in the US or the EU and has waived the conduct of Phase III confirmatory studies. Medical doctors, clinical scientists and those who have experience in drug development and public health have asked questions about this approval because a waiver of Phase III clinical trials is unheard of in the medical community even during public health emergencies. There is an unease that this approval will be used as a precedent by others seeking to circumvent the mandatory requirement of rigorous Phase III clinical trials to demonstrate an acceptable benefit-risk profile for any therapeutic candidate.

It is important to understand the role of a properly designed and conducted a Phase III clinical study in drug development. Unlike a Phase II study, which is the subject of this controversy, a large, properly randomized Phase III study helps us answer what truly is the therapeutic efficacy of the experimental drug while considering its risks (side effects). It is also the riskiest phase of drug development as a large percentage of drug candidates that make it through Phase II fail during a Phase III study. Such a study often demands a patient cohort of hundreds and often thousands of subjects in order to show meaningful statistical differentiation from a random chance of recovery from the disease. For example, the dexamethasone studies that recently demonstrated a significant reduction in deaths of COVID-19 patients recruited 6,400 patients of whom 2,100 received dexamethasone, while the remaining received standard care. Phase III clinical trials for Remdesivir were carried out in two stages, the first involving 397 patients and the second which began with 600 patients and was later expanded to 1,000 patients. The results of these trials for both dexamethasone and Remdesivir were published in reputable peer reviewed journals while their approval was being considered by regulatory bodies. Biocon in contrast got the approval from the DCGI based on a clinical trial which had a cohort of just 30 patients and we are yet to see any studies published in a reputed peer reviewed journal.  Epidemiologist and public health physician Jammi Nagaraj Rao explained the true size of patient cohort needed to demonstrate if the study were to meet its primary endpoints for reduction in mortality rate or to have compelling data.

Given these well-founded concerns over the waiver of Phase III study for this approval, it is necessary to understand how drug approvals in India have reached this slippery slope where pivotal Phase III trials can be waived based on such small Phase II studies. The only publicly available information about this drug’s approval, due to the inherent opacity of India’s drug regulatory framework, are the minutes of the Subject Expert Committee (SEC) which advises the DCGI on new drug approvals. The minutes for the SEC meeting where Biocon’s drug was approved do not even reveal the names of the experts who participated in the meeting and reviewed the data from Biocon. The minutes also do not list any clinical or statistical reasons for waiver of Phase III studies. Rather, they note that Biocon’s drug was being approved for ‘Restricted Emergency Use’. However the New Drugs & Clinical Trials Rules, 2019 under which Biocon’s drug was approved does not have any clause like its American counterpart, where drugs can be authorized for ‘Restricted Emergency Use’ under section 564 of the Federal Food, Drugs and Cosmetics Act.

Under Indian law, there are two other alternative pathways for approval of drug candidates that have not been evaluated in Phase III clinical trials. The first is the ‘accelerated approval’ procedure in the Second Schedule of the New Drugs & Clinical Trials Rules, 2019. To secure an approval under this pathway, pharmaceutical companies have to show that their experimental drug candidate demonstrated ‘remarkable efficacy’ during the Phase II trials for a disease that lacks alternative treatments and that there is a prima facie case of meaningful therapeutic benefit over the existing treatments. Given the small patient cohort for this study, it would be important to understand how the SEC determined “remarkable efficacy” of this drug candidate if it was approved using this pathway. To our knowledge, this pathway has never been used earlier in India. In the U.S., even when a drug gets ‘accelerated approval’ its manufacturer is still required to conduct Phase III studies to evaluate the drug candidate’s benefit-risk ratio – there is no question of a waiver.

The second regulatory pathway is laid down in Rule 91 where an ‘unapproved drug’ maybe manufactured in India for treatment of patients with life-threatening diseases. There is no discussion of waiver of Phase III trials under this provision. Therefore, it is not clear under which of these two provisions did the SEC and the DCGI grant “Restricted Emergency Use” for Biocon’s drug candidate and the DCGI is doing little to clear the confusion.

Observational data (Phase IV studies) is no substitute for properly designed and controlled Phase III studies.

The lack of transparency and the ease with which the basic norms of evidence-based approval of drugs are being thrown to the wind by the DCGI is worrying because India has had a troubling history of new drug approvals. The 59^th report of the Parliamentary Standing Committee on Health had exposed many scandals in how new drugs were approved – this included the approval of drugs that had not been approved in the Western world. There is then the report of the Mohapatra Committee which was constituted to inquire into the questionable approvals pointed out by the Parliamentary Standing Committee. It took us two long years, a rather trying process to get a copy of the report that singles out three former DCGIs by name for granting these approvals which have no scientific or clinical rationale.

This pandemic has exposed the dysfunction in the country’s regulatory system that has always thrived on the patronage of the pharmaceutical/ayush industry and brought its true nature into sharp focus to a much wider audience than is often interested in how the Ministry and the Drug Regulator function. The past few weeks have witnessed a gross violation of the Drugs and Magic Remedies Act by the makers of Coronil with little to no consequence and the approval of Favipiravir based on sparse clinical data. As concerned citizens we are well within our right to ask questions of the DCGI about its new approval without being accused of undermining national interest and we hope the government will respond constructively to our concerns.

The Hindu published an opinion piece a few days back titled “Taking a myopic view of foreign made generic drugs” by Srividhya Raghavan, Professor of Law at Texas A&M University on July 9, 2019. Sadly, opinion pieces these days seem to go the same way as reported news is, void of any fact-checks and balance in views expressed.

Let me begin by highlighting “factual” mistakes in this piece. The author says “Much of the focus was on contamination found in one drug made by Ranbaxy”. This one sentence states three facts incorrectly.

A cursory review of the settlement agreement prior to authoring this piece would have revealed that the company pled guilty to knowingly introducing “adulterated” drugs (not contaminated drugs, a term which is used to obfuscate the issue) into US interstate commerce with an intent to defraud or mislead. Second the plea agreement lists the following drugs: Sotret, Gabapentin, Cefaclor, Cefadroxil, Amoxycillin & Amoxycillin and Potassium Clavunate. By my math, these are more than one drug. In fact, the US FDA had invoked its seldom used Application Integrity Policy to block the importation of as many as 30 drugs made by this company into the US. Third, the focus was not on something that was “found” in any drug made by Ranbaxy, it was on compliance with the US cGMP requirements for product quality. This is just one simple illustration of how statements not based on facts are used to advance a self-serving narrative.

Then there is the usual whataboutery to distract attention from the real issue. The author says “Ranbaxy saga unfolded 14 years ago” and that “strategy of raising fears of “contaminated” foreign generics has successfully prejudiced Americans against valid generic drugs”. One only need to look at the most recent US FDA annual report from the Office of Compliance to see that more than a third of the Warning Letters issued in FY 2018 for cGMP violations are for data integrity. One wonders how the author’s lack of support for Ranbaxy’s behavior comports with her views of the same exact behavior documented by many generic manufacturers who make their product overseas documented extensively by the US regulator last year? Last year was not 14 years ago. And is it fair to ask if finding carcinogens in your blood pressure medication that has been documented extensively now with generic Valsartan real? Or is this called fear-mongering? How about the Canadian Genric Drug Maker Apotex withdrawing 31 ANDA approvals from the US FDA because it couldn’t substantiate data (which was at the core of the case against Ranbaxy) filed from its facilities in Bangalore & Mumbai yesterday (July 10, 2019). Is that recent enough?

Drawing comparison to the abhorrent behavior at Turing Pharmaceuticals of raising prices to making substandard drugs and selling them to unsuspecting patients does a real disservice to any cogent argument that can be made in favor of using good quality generic drugs. She argues that somehow what the US FDA does with inspecting foreign facilities is an “over-reach” of its jurisdiction and that the observations made by the US FDA inspectors on Form 483 are against what she calls “American cGMP practices as the global standard”.

What she does not mention is that Section 708 of FDASIA explicitly confers this extra-territorial jurisdiction to the US FDA for enforcement. How’s that for a balanced view?

I wish the author would take a few minutes to review any of the inspection observations (Form 483) from any time she chooses and highlight one instance where an observations made by an inspector is not under a specific section of Code for Federal Regulations (CFR). This is absolute nonsense directed toward those who do not understand how the regulations work; and surely not expected from a legal professional.

The author further argues that “there is no scale to determine whether problems portrayed in the final report” and that “the absence of a proper scale provides a loophole, enabling the regulator to cherry-pick and treat all instances of non-compliance as egregious violations”. Again, a few cursory minutes spent on the Google machine would have explained in reasonable detail the difference between observations on Form 483, a Warning Letter, An Import Alert, an invocation of the Application Integrity Policy and a Consent Decree. This argument is specious at best and misleading at worst and tells you what the agenda behind the comment is.

Academics are expected to advance opinions based on facts and professors of law are expected to understand statutes before opining on their application. As demonstrated above, this opinion piece fails miserably on both counts.

A study, funded by US-Aid & run by the U.S. Pharmacopeia, was performed in Ghana on two life-saving medications used during labor — Oxytocin & Ergometrine. The results were both astonishing and scary.

Out of the 169 Oxytocin samples assayed, 55.62% failed. Of the 99 Ergometrine injection samples, 73.74% failed, and all of the 11 (100%) Ergometrine tablets tested failed assay.

The question is: How do the countries of origin (India and China) allow their Pharma companies to ship such poor quality medicines, especially those which have a life or death impact to countries in Africa? Who is accountable for this?

Original Report ➡️ Ghana Maternal Products Study

One of the most shocking discoveries during the course of my research into the Indian drug regulatory system over the last few years were the minutes of the 46^th meeting of the Drugs Consultative Committee (DCC) held in 2013, which has representation from all the state drug control administrations. These minutes revealed that stability testing was compulsory for only those classified as ‘patent and proprietary’ drugs. Stability testing according to the minutes of the committee was not mandatory for the generics approved by state licensing authorities. In pertinent part, the minutes noted the following:

“Since there is no requirement as a condition of license of proving that drugs are stable under recommended conditions of storage for other than Patent & Proprietary Medicine in Drugs & Cosmetics rules it can lead to unstable products being licensed in the country. As it is serious lacuna, it is very important to put it in rules.”

At the time I was shocked to read this because stability tests are mandatory across the world for all medicines whether generic or patented. The simple aim of a stability test is to ensure that medicine can retain its efficacy despite changing temperatures and pressure conditions. Some of this testing is done soon as the batch is manufactured while some of the testing is done after a few months on samples of the batch that have been retained. If a batch fails stability testing it has to be recalled and destroyed. Manufacturers obviously do not like to lose money like this but then again, they should perhaps invest in quality manufacturing.

Stability testing is especially important in a country like India with its hot and humid climate which can cause poorly manufactured medicine to break down chemically. There are simple techniques to test the stability of these drugs such as putting the medicine in a controlled temperature and pressure environment to examine its durability. Of course, these tests take up time and resources. During my time at Ranbaxy I had discovered that the company was regularly fudging stability data for the American market.

At the DCC meeting in 2013, the committee had made the following recommendation to the government to make stability testing mandatory for all generics:

“The members agreed that it is necessary that evidence and data of the stability of the drug products proposed to be manufactured by the licensee are required to be submitted to the regulatory authorities so as to ensure the stability of the drug formulations licenced in the country by the State Licensing Authorities. The DCC after deliberation agreed to the proposed amendments to the Drugs and Cosmetics Rules, 1945.”

As of 2016, when I filed a PIL before the Supreme Court, the recommendation of the DCC had not yet been enforced which is why I made it an issue in the PIL. After the Supreme Court’s reluctance to admit my PIL, I sent a report to the Health Ministry outlining several issues, including the need to make stability testing mandatory. On May 2, 2017 the Ministry of Health published draft rules for making stability testing compulsory for generic medicine. However, for some reason, the draft rules were never translated into law and a few months later, in August, the DCGI was sending plaintive letters to state drug controllers requesting them to “advise” manufacturers to submit stability data. At the time I co-wrote an op-ed in the Indian Express shaming the government for its failure to make stability testing mandatory despite a consensus that such testing was required. Finally, in April, 2018 the Ministry of Health made stability testing mandatory by amending the D&C Rules.

The battle however was only half won because the industry has been fighting back tooth and nail. On February 11, 2019 the business portal Pharmabiz reported that the pharmaceutical industry had sought the rollback of mandatory stability testing for generic medicines. The report quotes an industry official as saying the following:

“This is indeed a big challenge for existing as well as new manufacturers and becomes a hurdle for implementing the mission “Make in India” to invite new plant, will badly affect the export and unit in the pharmaceutical sector. Because due to this it shall take minimum 8 to 9 months to finish stability test and get product approval of molecules for commercial production for the new as well as existing manufacturing units, a delay which shall put a huge financial burden,” said Nipun Jain, chairman of SMPMA.”

This statement basically accepts that the Indian industry has been exporting pharmaceutical drugs to several jurisdictions (presumably countries with lax regulatory requirements, called ROW countries) without complying with the standards of mandatory testing. I am simply stunned at the callousness with which the Indian industry puts its own profits before the well being of its patients.

It gets worse. Last month, Pharmabiz reported that the drug manufacturers in Bihar approached the DCGI to complain against the state drug controller on account of its anti-industry policy. The main grouse against the Bihar drug controller was the fact that he sought to apply the mandatory stability testing requirement! The Pharmabiz article cites some outdated guidelines from 1988 without any reference to the amendment to the amendments in 2018 that made stability testing mandatory. The same article reveals an incredibly hostile attitude of the local manufacturers towards the regulator in Bihar and it is clear that the industry is trying to have him “administratively reassigned”.

In light of these news reports, I strongly suspect that the mandatory stability requirements are not being enforced by most the state drug controllers. A guidance document that was to be released to guide state drug controllers and industry on the parameters of stability testing is pending despite a committee being setup specifically for this task. The minutes of the DCC can be viewed here.

In this regard, I have written to the Health Secretary Ms. Preeti Sudan, requesting that she ask the DCGI to submit a report on the implementation of the mandatory stability testing by state authorities as well as urgently release the guidance document for public comment so that all stakeholders can contribute to defining the stability requirements for our drug supply. Given the pushback from the industry, I fear that the industry will attempt to hijack the process behind closed doors. Further, a guidance document on this issue would help state drug controllers in implementing the stability requirement with consistency across the country.

The letter to Secretary Sudan can be found here.

Author: Prashant Reddy Thikkavarapu, republished with the author’s permission from the original SpicyIP post

There has been panic and alarm amongst doctors, especially gynecologists, since the announcement by the Ministry of Health & Family Welfare (MOHFW) on June 27, 2018 that only one public sector undertaking, Karnataka Antibiotics & Pharmaceutical Ltd. (KAPL) would be authorized to manufacture and supply oxytocin for the Indian market from July 1, 2018. The drug oxytocin is considered a critical hormone for maternal health  since it is used to inducing labour and more importantly, to control bleeding during labour, which can otherwise be a cause of death amongst young women in India who tend to be anemic.

While several media reports reported the restricted manufacturing order as being announced only on June 27, the order restricting manufacture of oxytocin was issued on April 27, 2018. This strangely worded order, which was issued under Section 26A of the Drugs & Cosmetics Act, forbade the private sector from manufacturing this drug for the Indian market while still allowing them to manufacture for the purposes of exporting the hormone manufactured in India. Limiting the manufacture to only one public sector undertaking understandably caused panic amongst the medical community because the government was basically disrupting an entire market dominated by the private sector and its action could lead to potential shortages. Given that India has a population of 1.3 billion people, it is doubtful if just one company can meet the demand of the entire nation. It is perhaps for this reason that the government has extended the deadline to September 1.

The background of the events leading to this order is a perfect illustration of the quackery that passes off as health policy in this country.

The court of its own motion, the amicus & the absence of evidence

The government order dated April 27 begins with the observation that the High Court of Himachal Pradesh in the case of ‘Court on its motion v. State of Himachal Pradesh’, had observed that “there is large scale clandestine manufacture and sale of the drug Oxytocin leading to its grave misuse, which is harmful to animals and humans” and that it had ordered the government to consider the feasibility of restricting the manufacturing of Oxytocin to only the public sector.

A reading of the High Court’s order delivered by a bench of Chief Justice Mansoor Ahmad Mir & Justice Tarlok Singh Chauhan reveals that the judges took up this issue of alleged misuse of Oxytocin, on November 24, 2014 after they read a news item published in daily Hindi vernacular Amar Ujala alleging the “illegal use of lethal vaccine Oxytocin on fruits, vegetables and animals”. In reality, Oxytocin is not a vaccine but a hormone, naturally produced by the human body. The most common allegation, which has also been made in Parliament, by animal activists, like the incumbent Minister for Child Development Maneka Gandhi, is that Oxytocin is misused by dairy farmers to induce labour in cattle so as to force their bodies into producing milk.

As if often the case with such public interest litigations, the high court appointed a senior advocate as amicus curiae to assist the court. The court records that the amicus curiae had “painstakingly” placed on record material demonstrating the supposedly rampant and widespread misuse of Oxytocin on milch animals, fruits and vegetables which was harmful to not just the animal but also on humans who drank the milk of these animals. The judgment records the following as the possible effects of Oxytocin on the human body:

“The Oxytocin not only effects the cow/buffalo, it filters into the milk and consequently, has been held responsible for breast and uterine cancers, male impotence, excessive hair on woman and balding for men, early or erratic periods, early development of breasts (in both sexes). Its use is also considered harmful eyes, especially in children. The hormone affects the reproductive ability of woman. Its most common symptoms are exhaustion and loss of energy. Consumption of Oxytocin infected milk by pregnant woman increases risk of hemorrhage. It is also responsible for high spike in tuberculosis cases in humans. (e) Beef all over India has been found to be extremely toxic with large amount of this drug. (f) The direct infusion of this drug in vegetables, fruits and other consumables for humans is also widespread making such food items highly infected with Oxytocin.”

Astonishingly, the court does not cite a single scientific study or research paper to back its claims.

This is not insignificant because the central government in 2010 had commissioned the Indian Medical Research Council (ICMR) to address various health and safety issues related to Oxytocin. In one of the studies published in the Indian Journal of Medical Research, which is the official publication of the ICMR, a team of 5 scientists from the National Institute of Nutrition (a unit of ICMR) concluded that “These findings suggest that exogenous OT injections do not influence its content in milk. Further, OT present in milk is rapidly degraded during intestinal digestion, ruling out its intestinal absorption and associated adverse health consequences, if any.” In other words, there was no evidence that oxytocin administered on milch animals would have an adverse effect on the human body.

There is a second study, reportedly conducted by the National Dairy Research Institute (NDRI) in September, 2016 which reported that oxcytocin had no side-effects on the health of animals and milk because the hormone is a naturally occurring in milch animals and is similar to other hormones like insulin. The risk, as per the study, of continuously administering oxytocin is that the milch cattle develop an addiction and don’t respond to normal milk ejection stimuli. This second study has been cited by the incumbent Minister of Health J.P. Nadda in the Rajya Sabha on December 2, 2014 while responding to a question from Dr. Chandan Mitra asking the government whether it had studied the ill effects of Oxytocin on animals and human beings. The same study was cited once again by the incumbent Minister for Agriculture Radha Mohan Singh in response to a question in the Lok Sabha by Supriya Sule and Satav Rajeev on the effects of administering Oxytocin on animals. The amicus and by extension the High Court appear to have been entirely unaware of the above discussed studies because there is no mention of either study in the judgment.

The multiple regulatory deliberations on Oxytocin at the DCC

The two statutory bodies under the Drugs & Cosmetics Act are the Drugs Consultative Committee (DCC) and the Drugs Technical Advisory Board (DTAB). While the first is committee consisting of representatives of different state drug controllers with a mandate to ensure uniformity of regulations amongst the country, the second is an expert body consisting of regulators and independent experts with a mandate to provide technical advice to the Central Government i.e. the Ministry of Health & Family Welfare (MOHFW). Both bodies can only make recommendations to the MOHFW which then takes its own decision.

The issue of stricter regulation of Oxytocin was discussed at both the DCC and DTAB on multiple occasions, in response to petitions and questions in Parliament by Maneka Gandhi demanding action against the misuse of Oxytocin. The DCC discussed the issue on July 20, 2012 and November 12-13, 2013. The minutes of these meetings record mostly generic statements about the supposed misuse of Oxytocin and how it is pushed through clandestine operations – there is no mention of any statistics or verifiable source of information supporting its “widespread misuse”. The meeting in 2013, records that the issue was being taken up specifically because Maneka Gandhi had raised the issue of misuse of Oxytocin with the Secretary of Health. These two meetings of the DCC find mention in the High Court’s order. A third meeting not mentioned in the court’s order, took place on October 16, 2015 where Maneka Gandhi herself turned up before the DCC to share her views with the members. Going by the minutes, it does not appear that Maneka was even aiming for a ban of Oxytocin but better regulation of clandestine, illegal manufacture and sales.

The DTAB’s finding that Oxytocin & the Central Government’s orders

The DTAB first discussed this issue on November 25, 2013 because Maneka Gandhi had raised it in Parliament. Unlike the DCC meeting held just days earlier, the DTAB noted the fact that the Department of Animal Husbandry, Dairying and Fisheries, Ministry of Agriculture had not recommended the ban of the hormone for veterinary uses because it had therapeutic applications on animals. As a result, the DTAB declined to recommend a ban on the drug for veterinary uses. Instead it made generic recommendations to state drug controllers to curb misuse of the drug through increased surveillance and raids.

A few months after that meeting, on January 17, 2014 the central government issued an order under Section 26A of the Drugs & Cosmetic Act, 1940 ordering the formulations meant for veterinary uses to be sold to only veterinary hospitals while ordering bulk Oxytocin manufacturers to supply the active pharmaceutical drug only to licensed manufacturers. The opening line of this particular order noted that the central government “is satisfied that the drug Oxytocin has a definite therapeutic use in certain medical conditions”.

Three months after that order was issued, on April 1, 2014 the DTAB met to discuss just Oxytocin; there was no other item on the agenda. The minutes of the meeting record, with some exasperation, that notwithstanding the order issued on January 17, 2014 tightening the distribution channels of Oxytocin, “Smt. Maneka Sanjay Gandhi, M.P. has however, again written to the Secretary, Ministry of Health and Family Welfare that the misuse of Oxytocin, is leading to a substantial loss of livestock in the country.” The minutes also record that the “Secretary, Health and Family Welfare, had therefore, desired that the matter should be expeditiously placed before the DTAB for its considerations.” Despite the pressure from Maneka Gandhi, the DTAB, to its credit, reiterated its position that the hormone has a definite role in the medical field both for humans and animals thereby ruling out any ban on the legitimate manufacture of the drug especially when sale of the hormone was possible only under prescription. Regarding the problem with manufacture and sale of the drug through illegal channels the DTAB concluded that the problem of misuse could not be countered by banning the drug. The committee instead prescribed a public awareness strategy combined with new rules on maintaining records of sales of Oxytocin.

Six months after the DTAB meeting, once Maneka Gandhi was appointed the Minister for Child Development in the Modi cabinet, the then Drug Controller General of India (DCGI) G.N. Singh sent a circular to all state authorities, informing them that “Smt. Maneka Gandhi, Hon’ble Minister of Women & Child Development has taken up the matter with the Secretary, Ministry of Health & Family Welfare that the misuse of Oxytocin, is leading to a substantial loss of livestock in the country.” The circular then notes that an inter-ministerial committee was constituted by the MOHFW to study the problem and that the committee had recommended all state authorities to keep a strict eye on illegal use of Oxytocin and to investigate the sources of illegal supply. The circular also requests all state authorities to provide details of manufacturers of Oxytocin along with the statistical information on the seizures conducted, quantity seized, persons arrested, prosecutions filed during the previous three years. Finally, it appears, the central government was trying to collect information to figure out the scope of the allegations about Oxytocin misuse but the question is whether drug regulators were the appropriate authorities who could even collect such information.

State drug regulators can only regulate the quality and sale of the drug till the point of the sale (The Chemist). Thereafter, the manner in which a drug is misused by dairy farmers on milch cattle falls within the jurisdiction of authorities under The Prevention of Cruelty to Animals Act, 1960. It is only the Police Officers and other authorities under this legislation who can prosecute cases of misuse of Oxytocin in animals. Drug inspectors have no jurisdiction to prosecute cases of cruelty to animals. It follows therefore that they will not have any credible information on the scale of misuse of Oxytocin. Going by the figures presented in Parliament on March 20, 2018 by Krishna Raj, the Minister of State of Agriculture and Farmers Welfare (also responsible for Animal Husbandry) in response to a question by MP George Baker, there were less than handful of prosecutions related to misuse of Oxytocin. His response in Parliament listed 8 cases in Chhattisgarh related to seizure of Oxytocin injections, 1 case in Karnataka, 4 cases in Tamil Nadu and 7 cases in Uttar Pradesh. A different set of figures was put forth in Parliament on July 20, 2018 by the Minister of State for Health Ashwini Kumar Choubey who reported a total of 42 cases filed in the previous year by different state drug regulators and the central regulator. Most of these cases are likely for violation of the Drugs & Cosmetics Act rather than offences under the Prevention of Cruelty to Animals Act because as explained earlier, Drug Inspectors cannot prosecute cases of animal cruelty, they can only prosecute violations of the Drugs & Cosmetics Act. In the case of Oxytocin there are special rules requiring packaging of the hormone in a single blister pack which several manufacturers appear to be violating this rule attracting prosecutions from the regulators. In no event is this proof of misuse of the hormone on milch cattle.

In 2015, the DTAB took up the issue of Oxytocin twice, once at its 69^th meeting on April 22 and a second time at its 70^th meeting on August 18. The DTAB invited to these meetings, experts from the Indian Veterinary Research Institute (IVRI), ICAR – Ministry of Agriculture and the National Dairy Research Institute (NDRI). All the experts concurred that Oxytocin was required even for veterinary purposes and could not be banned. The problem identified by the experts was the unauthorised manufacture and sale of Oxytocin. The Joint Commissioner of FDA, Maharashtra stated in the 70^thmeeting that the Oxytocin manufactured by units licensed under the Drugs & Cosmetics Act was too expensive to be used by milkmen and that the problem was with raw material being smuggled across the border for crude manufacturing by unlicensed units. According to the Commissioner, it was this Oxytocin that was cheap enough to be used by dairy farmers. Both times, the DTAB agreed that the only response to the problem was increasing surveillance and educating diary farmers about the downsides of overusing Oxytocin.

The High Court and its judgment  

The High Court in its judgment dated March 15, 2016 takes note of only the DTAB meetings in 2013 and 2014, missing out the more detailed deliberations in 2015. The court then concludes, without citing any evidence whatsoever, “that inspite of various provisions of the Drugs and Cosmetics Act and other statutes in place, this Court cannot be oblivious to the fact that there is large scale manufacture and sale of drugs carried out in clandestine manner and that there is grave misuse of Oxytocin by farmers and dairy owners, which is the matter of great concern.”

The fact of the matter however is that not a single one of the meetings of the DCC or DTAB ever produced any particulars regarding the scope of the problem. It is thus baffling that the High Court concluded that the problem was so rampant. However, convinced as it was about the misuse of Oxytocin, the court decided that it must issue directions for both the state government and the central government. One of these directions that was made to the State of Himachal Pradesh (and not the Union of India) was “to consider the feasibility of restricting the manufacture of Oxytocin only in public sector companies and also restricting and limiting the manufacture of Oxytocin, by companies to whom licenses have already been granted.” For almost two years, the central government did nothing about a feasibility report and rightly so since the direction was aimed at the state government and not the central government.

The pressing question now is what has changed between the 70^th meeting of the DTAB held in August, 2015 and the order of the MOHFW on April 27, 2018 to force the MOHFW to restrict the manufacture of oxytocin to the extent that the domestic supply of this crucial hormone is restricted? The answer again, appears to be Maneka Gandhi.

Did Maneka propose restricting manufacture Oxytocin to only the public sector?

In June, 2017 several months before the government issued the order restricting manufacture of Oxytocin, the Hindu reported that the government was considering restricting the manufacture of the hormone by only public sector undertakings. The report attributes the idea for restricting the manufacture of the drug to Maneka Gandhi and even quotes her close associate Gauri Maulekhi backing the proposal. Maulekhi is perhaps better known for her role in forcing the government to introduce the highly controversial Prevention of Cruelty to Animals (Regulation of Livestock Market) Rules, 2017. Those rules which threatened to derail the entire cattle trade in the country, jeopardising the livelihoods of farmers, was the result of a PIL filed by Maulekhi before the Supreme Court in 2014.

The screws start tightening thanks to the Health Secretary

In March 30, 2017 just months before the report in the Hindu, the DCGI in a communication to state drug regulators, noted that the Secretary of Health had convened a meeting on March 14, 2017 to “take stock of situation relating to restrict and regulate manufacturing of Oxytocin and to permit its manufacturing in PSU in compliance to the judgment of the High Court of Himachal Pradesh”. It is not clear why the Secretary was under the impression that the High Court’s order was directed towards the central government when the recommendation to study the feasibility of restricting the manufacture to the PSU sector was directed at ‘respondent No.1’, the state government. Nevertheless, in September, 2017 the Ministry wrote to the DCGI instructing him to communicate to all state governments to take certain directions to comply with the terms of the High Court’s order. This included the constitution of special teams in each district to control the sale of Oxytocin, strictly enforcing licensing of manufacture of Oxytocin, publishing on the internet details of licences and monthly manufacturing of Oxytocin and finally steps to sensitise the public on misuse of Oxytocin. Restricting manufacture to the public sector was not yet on the agenda.

The DTAB met once again on February 12, 2018 and Oxytocin was yet again on the agenda. The minutes of the meeting record a terse recommendation to prohibit the import of Oxytocin and restricting the supply of Oxytocin to only registered hospitals and clinics in both the private and public sector. Unlike the minutes of the earlier meetings that recorded the views of different members the minutes of this meeting only stated the final conclusion without any reasoning. More importantly though, the DTAB never made a recommendation to the Ministry to restrict manufacture to only the public sector.

The meeting with the manufacturers of Oxytocin & the restrictions that followed

Four days after the DTAB’s meeting, the new DCGI Eswara Reddy issued a notice summoning all the manufacturers of Oxytocin on February 22, 2018 to discuss the issue of illegal manufacture and use of Oxytocin since there were reports that the hormone was being misused in India on milch cattle. There was no mention in the notice of any plan to restrict manufacture of the drug to only the public sector.

After meeting the manufacturers, the DCGI issued a public notice on February 28, 2018 regarding the alleged misused of Oxytocin. The notice invited public comments on a proposal to restrict the manufacture of Oxytocin to only KAPL and also clearly mentioned the High Court’s judgment as the inspiration behind the move. The notice also made it clear that the private sector could still manufacture but only for export and not the Indian market. The notice was entirely silent on the earlier DTAB meetings that discussed the issue threadbare.

While the minutes of the meeting with the manufacturers are not publicly available, it is known is that the government clearly stepped up efforts on the Oxytocin issue in the months that followed. The push appears to have come from the Prime Minister’s Office as reported by the Wire which conducted a high-level meeting. The source cited in the Wire’s report was a circular issued on April 6, 2018 by the Anti-Smuggling Unit of the Central Board of Excise and Customs (CBEC) informing its various departments that subsequent to a meeting held at the Prime Minister’s Office (PMO) it was decided that all the bonafide requirements of Oxytocin should be met by indigenous production and all imports should be banned. All units were thus alerted to the possibility of smuggling and were instructed to keep vigilant.

Thereafter on April 9, 2018 Dr. Eswara Reddy chaired a meeting of the DCC consisting of all state drug regulators, where they were informed that amongst other measures DTAB at its meeting on February 12, 2018 had recommended restricting manufacture of Oxytocin only to public sector units. This was blatantly false because DTAB never made such a recommendation in its February meeting.

The orders under Section 10A & 26A

In April, the Ministry of Health issued two orders related to Oxytocin. The first was issued on April 24, 2018 under Section 10A of the Drugs and Cosmetics Act, 1940 prohibiting the import of Oxytocin into India, with immediate effect, on the grounds that the central government was “satisfied that the use of the drug Oxytocin and its formulation in any name or manner is likely to involve certain risk to human beings and animals and that it is necessary and expedient to prohibit the import of the said drugs in the public interest.” This was a grossly incorrect statement because government ministers in Parliament as well as the DTAB have time and again, reiterated that Oxytocin was of vital importance for both humans and animal. In fact, in its earlier Section 26A order issued in January, 2014 the MOHFW had categorically expressed its satisfaction that Oxytocin had a definite therapeutic use in certain medical conditions. What changed this conclusion?

The reason the MOHFW had to blatantly lie in this manner was because Section 10A of the Drugs & Cosmetics Act allows the government to prohibit import only if it is satisfied that the use of a drug is likely to involve any risk to human beings or if it lacks therapeutic value or lack therapeutic justification.

The second order was issued by the MOHFW on the April 27, 2018 under Section 26A of the same legislation and was to come into effect from July 1, 2018 (which date has been pushed to September 1, 2018). Unlike, the import ban order, the order under Section 26A was justified on the grounds that the High Court of HP had “observed” that “large scale clandestine manufacture and sale of Oxytocin was leading to its grave misuse, which is harmful to animals and humans”. This possibility of misuse is quite different from classifying the drug itself as a risk to animals and humans, as was the language used in the order under Section 10A.

Citing the High Court’s recommendation to study the feasibility of restricting Oxytocin to public sector units, as well as the DTAB recommendation to regulate the manufacture of the hormone, the order of the MOHFW imposes a number of conditions on the sale of Oxytocin, the most important of which was the decision to restrict manufacture for the domestic market to only the public sector, while allowing the private sector to continue manufacturing for exports. The order is entirely silent on how these supplies from the private sector would be barred from entering the domestic trade channels. In addition to restricting sales to the public sector, the order by the Ministry also disrupts the entire distribution market by mandating the sale of Oxytocin by the public sector directly to registered hospitals in the public or private sector or to specified government programs. The sale through chemists was completely prohibited. This means that regular trade channels are completely disrupted leading to severe market inefficiencies that will likely cause the price of the drug to spike once the ban is actually enforced.

The orders for a crackdown

Following this comical process, in the month of May 2018, in preparation for the clampdown on Oxytocin, the DCGI issued an office memorandum informing his staff that the issue of misuse of Oxytocin had been discussed at the “highest levels of the government” before the orders were issued under Section 10A and Section 26A and that all officers of the Central Drug Standards Control Organisation (CDSCO) would have to launch special operations to prevent and detect illegal manufacturing, sale and distribution of Oxytocin with the cooperation of the police, if necessary. The circular ended with the direction that the matter was to be given the “top priority”. Sure enough, in the following months the CDSCO announced large seizures in Bihar, while the police in Hyderabad and Punjab also announced large seizures. While the seizure in Bihar was allegedly due to violation of packaging norms, the seizures in Hyderabad and Punjab appear to be blatantly illegal because neither police force has the power to seize those drugs from distributors unless they had proof that the drug was being illegally administered to milch cattle in a way that violated the Prevention of Cruelty to Animal Act, 1960.

Why did no one in the pharmaceutical industry challenge the order in April itself?

What is more intriguing about this entire episode is the fact that nobody in the pharmaceutical industry challenged the Ministry’s orders until July 31, 2018 when it was reported that Mylan challenged the legality of the order, although even that is not visible on the Delhi High Court’s website.

The chronology of the events documented in this bizarre episode raise some very basic questions which need some deliberation:

1. The competency of the legal justice system to adjudicate issues that are deeply embedded in Science. Did the amicus accurately represent the facts and did the Bench understood the issues?
2. The disproportionate influence that well-meaning activists have on policy making. Whether the actions of the Ministry led by the Minister Menaka Gandhi were driven by a specific agenda is anyone’s guess.
3. The role of the regulator and the regulatory process once again in using scientific evidence to implement policy is once again highlighted in this episode. Political pressure notwithstanding, the role of the regulator is to speak for public health.

The larger question to ask at this stage, is who in the private sector is going to profit from the government’s extremely arbitrary actions and whether this regulatory action was a charade?

The Economic Times reported today of my petition to the Prime Minister to hold the Ministry of Health and Family Welfare to account for all the promises it made to the Parliament of India over several years regarding its opaque and unscientific decisions regarding several drugs that continue to be on the market today. A copy of the petition is here.

I was asked why I decided to petition the Prime Minister now, almost after two years since the highest court in the land refused to listen to plea calling it academic. For the sake of context, I am reproducing my responses to the questions I was asked below:

Our primary responsibility in holding the elected and bureaucracy accountable is to demand that the promises made to us are fulfilled. More often than not, these promises are conveniently swept under the rug, and we go on with business as usual. Unless we learn from history, and find out what was done wrong, how do we expect those who govern to correct the processes and do the right thing going forward?

According to a recent report in the Mint, the Drugs Technical Advisory Board (DTAB), a statutory authority under the Drugs and Cosmetics Act, 1940 was to meet this week to deliberate amongst other things, the possibility of a ban on a drug called Buclizine. This drug, which was initially introduced in India by a Belgian company called UCB Pharma, was then sold to an Indian company named Mankind Pharma.

Buclizine is the most potent reminder of the absolute lack of accountability at the Ministry of Health. Originally approved as an antihistamine (treating motion sickness and allergies), the government in 2006 mysteriously approved the drug for an additional indication – as an ‘appetite stimulant’ for children. In order to approve the drug for an additional indication, the drug regulator is required to review data from additional clinical trials to establish the efficacy of the drug for the new indication. Except, the allegation against Buclizine has been that there were never any clinical trials or studies to establish the drug’s efficacy as an appetite stimulant. Apparently, even Belgium, the country of origin of this drug, has not approved Buclizine as an appetite stimulant. In other countries like the US, the drug has been entirely discontinued for all indications.

The controversy surrounding Buclizine’s approval in India as an appetite stimulant is no secret. Some vocal sections of the medical community have been voicing their criticism against the use of the drug as an appetite stimulant since 2011. Then in 2012, the Parliamentary Standing Committee on Health & Family Welfare, in its 59^th report, slammed the regulator for approving the drug. The committee reviewed the status of this drug in other countries, the lack of clinical trials needed to demonstrate safety and efficacy and demanded an inquiry into how an approval was granted; it also recommended punishment for those who approved the drug. The committee concluded with the following recommendation to the government:

“The Committee is of the view that responsibility needs to be fixed for unlawfully approving Buclizine, a drug of hardly any consequence to public health in India, more so since it is being administered to babies/children. At the same time the approval granted should be reviewed in the light of latest scientific evidence, regulatory status in developed countries, particularly in Belgium, the country of its origin.”

The government promised an inquiry, which never took place even though in 2013 the Standing Committee “took serious umbrage” in its 66^th report to the Ministry’s dilatory tactics.

Finally, in 2016, almost 4 years after the Standing Committee red-flagged the approval, an expert committee called the SEC met on February 19, 2016 and held deliberations over the use of Buclizine as an appetite stimulant. Since the company marketing the drug was unable to present any clinical data to justify the use of the drug as an appetite stimulant, the committee recommended that the drug be discontinued as a therapy for this indication. A few months later, the DTAB met on June 27, 2016 and after considering the SEC’s report “endorsed the proposal for prohibiting the manufacture, sale and distribution of Buclizine for the indication “as appetite stimulant”. DTAB also set up another expert committee to examine the continued use of Buclizine for other indications.

These recommendations from the SEC and DTAB were more than sufficient for the Ministry of Health to issue an order under Section 26A of the Drugs & Cosmetics Act, 1940 prohibiting the use of the drug as an appetite stimulant. Yet, no such order was passed by the Ministry of Health.

Now in 2018, we are back to square one with the DTAB reportedly meeting once again to deliberate the issue of Buclizine. In the meantime, the company selling Buclizine has claimed a turnover of Rs. 14 crores from this product, selling 42 lakh tablets every year to unsuspecting patients.

If you think that courts will hold the government accountable, think again. I tried filing a PIL before the Supreme Court in 2016 raising a number of issues including the approval granted to Buclizine. I was told by the court that I was raising academic issues after which my lawyers withdrew the petition.

The case of Buclizine is open and shut – if there is no clinical data demonstrating the efficacy of the drug as an appetite stimulant, the drug should never have been approved in the first place. The fact that the drug continues to be available on the Indian market 6 years after a bipartisan Parliamentary Standing Committee rapped the Ministry on its knuckles is a sign of a deep-rooted rot in the Ministry of Health. Merely changing secretaries in the Ministry will not cure this rot. Repealing and replacing the Drugs & Cosmetics Act, 1940 to put in place a more transparent and accountable mechanism is the only solution.

The following piece was published in the Indian Express (although abridged) on March 13, 2018

A common theme among the pundits these days on Television and in Newspaper articles is whether the country ought to privatize its banking system and that the government should get out of running public sector banks. The multi-billion fraud that allegedly has been committed on taxpayers by unscrupulous businessmen is nothing new. We have seen scams of this nature in the past; and you can be rest assured, there will be novel and more innovative techniques that enterprising thieves will employ to be beat the system in the future. No system is failsafe, especially now, with the pervasive nature of technology that affects even the smallest aspect of life.

Sadly, as usual, we seem to focus on the symptoms of the problem rather than its root cause. Whenever these incidents come to light, our first reaction, rightfully is to try and fix the problem. Unfortunately, instead of taking a systematic approach to triage the problem, understand its root-cause and implement fundamental changes, we get carried away by perfunctory cosmetic changes evangelized by the same people under whose nose the fraud occurred.

I speak from personal experience of having lived through this rigmarole for eight long years and in the process, learning a few things. Fraud of this scale is never the work of a few. In my case, selling medicines to treat HIV-AIDS which were nothing but chalk powder and worse to countries in Africa was not just the remit of a few mid-level managers. Everyone up and down the food-chain knew and consented to this sickening fraud. Even in a society such as ours, where hero-worship is the norm and investment in building sustaining institutions is the exception, no one person, or a small group could have pulled this off by themselves.

Which bring us to the current banking scandal.

Does anyone honestly believe that the managers of these public sector banks did not know that their core-banking system was not integrated with SWIFT? No one knew that the multiple approvals needed to execute a SWIFT transaction were all done by ONE person or a very small group of individuals? Are we to believe, as Debashis Basu points out, that three levels of audit, concurrent, internal & statutory, not to speak of the RBI oversight all conveniently did not notice these shenanigans over many years? Are we to believe that the six senior secretaries, two additional secretaries, two economic advisors and the deputy director general were all asleep at the Department of Financial Services? If you believe that, I have a bridge here to sell you.

We need to step back and ask ourselves a question: How do we build institutions that are independent of powerful people, vested business interests or political influence? Is getting the Parliament to enact a new law, like the Fugitive Economic Offenders Bill a panacea? Not likely. Every new law, however sound, in the end will be at the beck-and-call of the regulators and the administration. Remember, banking is the most regulated business in India. We have regulators on top of regulators; how well has that served us? All we do is to swap out who “the powerful” are. Instead of politically well-connected bankers, we will have well-connected bureaucrats. How does that prevent fraud?

We have to first accept that no system or process, however sound, will protect us from ill-meaning scoundrels. Crooks are always two steps ahead of the law. In order to understand their motives, we need to understand what incentivizes their behavior.

Effective governance to prevent fraudulent behavior is contingent on three key factors. Integrity of the people responsible for governance; effectiveness of the law and its implementation and, an independent check to keep the first two accountable.

The first of these three is straightforward. Until such time that we allow retiring bureaucrats plum positions on the Boards of these organizations and not hold those who currently staff such august bodies to account when public resources are pilfered from right under their noses, this will not change. Whether we have the political will to make this happen is anyone’s guess.

A tough and unforgiving rule of law implemented by a competent and proactive legal justice system is a good deterrent. But this is India. In a country like ours, where the legal-justice system seldom dispenses justice in a timely manner, to say nothing of the investigative agencies responsible for prosecution and their allegiance to political masters, putting all our eggs in this basket seems unwise.

The third, a more effective way is to incentivize integrity. Level the playing field. For every crook out there, there are ten honest people. Yes, there are those who will want to ride the gravy train and sell their soul for a shiny shilling. But in every organization, there are those whose conscience pricks at them when they see the public taken for a ride. The sad part is that more often than not, these people buy peace for their family and career by moving on or looking the other way without taking action. Why do they do this? Simple: our legal-justice system does not afford protection to those who speak the truth; it only punishes them – never rewards them. Those few brave who muster courage to stand-up for what is right are marked with a scarlet letter or worse, end up like Manjunath Shanmugham or Sateyndra Dubey. Notable others include Sanjiv Chaturvedi, Ashok Khemka, Rajan Nair, Satish Shetty, Narendra Kumar, Lalit Mehta…the list goes on.

Let me remind you, we had a part time finance minister for almost a year in the tenure of the current administration. Speaks to our priorities when it comes to safeguarding the public banking system, doesn’t it? Hindsight is 20/20, but how many of us raised this division of responsibility as a fundamental risk to the oversight of public resources? Only when the horses have bolted do we want to put a padlock on the stable door. Now imagine if insiders within the banking system raised this as a potential risk in a timely manner. Would we have been this indifferent?

What is the solution?

How about incentivizing whistleblowers with irrefutable evidence and well-developed legal cases to speak up in the interest of the society at large? What about incentivizing integrity?

We know this works and it has been done to great success in the United States. Under the modern American False Claims Act, whistleblower award programs protect those who choose to stand up for the truth, and they reward those who bring successful actions out of the proceeds of the victory. “Whistleblowers only get paid if they win, and they only get a small fraction of the sums recovered” by the government.

This law has been so effective that in the health care arena, the U.S. Government recovers $20 for every $1 spent investigating whistleblower complaints.

If we accept that our institutions are fragile, that our culture worships heroes rather than invest in building sustainable institutions and that our legal justice system has a long way to go, warts and all; then deterrence is only a partial threat to potential wrongdoing; one that can be bargained for the right price. Incentivizing integrity is the another tool we have to counter this abhorrent behavior.

Countries such as Australia and Italy are looking to model their own fraud fighting laws upon this 30-year old American law.

Sadly, our own Whistleblower’s Protection Act, passed by Parliament in 2014 is languishing; with the government showing no intention of promulgating rules to operationalize it. In fact, even before implementing the law, blatant attempts are being been made to water down its provisions through an amendment bill currently in the Rajya Sabha. Although narrower in scope than the U.S. law, proper implementation of the Whistleblower Protection Act and an inclusion of private right of action within the current law would be a giant step for India in fighting fraud. One does hope that the legal-justice system will address its own deficiencies and we wont see another display of public anguish from those who are tasked with dispensing justice in a timely manner.

The only question then is whether the current attention being paid to banking fraud is enough to tip India into the ranks of those moving to incentivize integrity and protecting whistleblowers?