Sunday, August 04, 2019

Bottle of Lies - Book on Indian pharmaceutical exports

I have just finished reading the book “ Bottle of Lies: The inside story of generic drug boom” by Katherine Eban

The main hero in the story is Dinesh Thakur, the whistle blower, who collected 48 million dollars for exposing the scandal of quality control frauds in Ranbaxy which was fined 500 million dollars by the US FDA. The other heroes are the FDA inspectors who jump over walls to pick up trash containing shredded documents and discarded samples. 

The author has used the Ranbaxy story to condemn Indian generic exporters. She has gone beyond India with a larger agenda, portraying generics as dangerous as against the patented branded medicines. It appears that she is part of the conspiracy of the Big Parma majors to trash the inexpensive generics and the Indian exporters.
She does not even pretend to be objective. She has dug only the dark side of Ranbaxy and does not acknowledge the merits of Ranbaxy which was a leader in Indian Pharma industry and was a pioneer in opening the US and global markets. She has completely ignored the strength of Indian Pharma entrepreneurs and scientific community. 

Undoubtedly, there is some truth in the allegations of the author. The Indian drug quality control is lax and disorganized. The Indian drug manufacturers have been converted to strict quality controls and good manufacturing practices, driven mainly after discovering the hugely lucrative US market. In their hurry to file new registrations with FDA and reach the market before the others, some companies have cut corners, cooked the books and compromised on quality for profits. Ranbaxy set the bad example followed by some others.

Indians are not the only ones who get FDA fines. Even the Big pharma tries to cheat and get caught. GSK, a British MNC paid a fine of 750 million dollars and the whistle blower got the highest reward of 96 million for exposing the poor manufacturing practices in their unit in Puerto Rico. Even the famous Pfizer paid 2.3 billion dollars fine in 2009.
Of course, there have been even bigger scandals from the Brahmins of Quality: The German Volkswagon’s cheating on emissions and Kobe Steel’s poor steel products, besides American scandals such as Enron and Madoff. But one cannot damn Germany, Japan or US, as Katherine has done with India based on a few cases.

The truth is that the US desperately needs less expensive Indian generics to reduce the huge cost of health care. That’s why they import five billion dollars worth pharmaceuticals from India annually. US is the number one market with a one third share of India’s global exports. Half India’s exports go to highly regulated markets such as UK, Germany, France, Canada and Australia, besides US. These countries, who are aware of the Indian issues and culture, are going to continue and even increase their imports in the future. The Big Parma has also joined the boom of India’s exports by acquiring and setting up manufacturing units in India. Mylan, the top generic producer in the world has many production units in India. The President of Mylan is an Indian, Rajiv Malik, who is trashed by the author of the book. It is good to see four Indian companies ( Sun Pharma, Cipla, Lupin and Dr Reddy Labs) in the top ten global generic medicine producers in the world.  And, India has the largest number of FDA approved pharma units in the world. 

Pharmaceuticals is one area in which India has beaten China in exports. In 2018, India exported 15 billion dollars as against 9 bn of China. What is interesting is that the Indian manufacturers use a substantial quantity of Chinese raw materials. While India imports 2 billon dollars of pharma products, China imports 28 billion dollars annually.  It is a pity that they import only about 40 million dollars from India but import more from countries such as Brazil, Argentina, Greece and Hungary.  Obviously, the Chinese need the less expensive generics from India as much as the rich countries of the world. So China should be the next target of Indian pharma exporters. The government of India should push this with the Chinese with whom India has a massive trade deficit of over fifty billion dollars. The Chinese can certainly buy a couple of billions of dollars of generics from India to reduce their high health care cost.

Despite the clear agenda, motives and prejudices of the author, the book is informative and useful. It gives an insight into the bureaucracy, corruption and politics and challenges faced by FDA. It has shortage of staff to deal with the large number of inspections around the world. The inspector job is unattractive with poor salary and hazardous travels to remote areas to do risky detective and investigation  work in environments of different cultures and value systems. The book is a must read for Indian pharma industry and policy makers to understand how FDA works and to improve the quality standadards of our own exporters.