Generic Drugs

As Imports Rise, Regulators Struggle

By | Updated March 18, 2016 9:56 PM UTC

Nobody wants to have their medicine made in factories that swarm with flies or are awash in urine or where safety tests are faked. That’s why U.S. authorities have banned imports of generic drugs from dozens of drug manufacturing facilities in India and China and the European Union has forbidden the sale of more than 700 drugs that had been approved on the basis of clinical trials conducted by a lab in India. Generic drugs now account for 87 percent of U.S. prescriptions. India is the second-largest exporter of drugs to the U.S., and almost half of active pharmaceutical ingredients used in the U.S. come from India or China. This trend poses challenges similar to those from the rise in imported foods: A global supply chain that delivers low-cost products but sprawls outside regulators’ traditional geographic orbit. At stake is whether the pill a patient takes halfway across the world will do its job or not, something an increasing number of doctors and researchers question.

The Situation

Last year, the U.S. Food and Drug Administration ramped up its attention to China after focusing on India the last couple years. FDA inspectors at Zhejiang Hisun Pharmaceutical found deleted records that might show a drug was impure, disappearing audit trails, and a worker who ran instead of handing over what looked like a computer memory stick. The problems in India are exemplified by one of the country’s biggest generics makers, Ranbaxy, now owned by Sun Pharmaceutical. Ranbaxy paid a $500 million fine in 2013 to settle charges that it sold adulterated drugs and lied to the FDA. Later, the agency banned imports from a Ranbaxy factory where workers hid failures on quality tests by repeating them until they got acceptable results. In factories run by another drugmaker, Wockhardt, inspectors found urine spilling over open drains and mold growing in storage areas for raw materials. The FDA has said it will expand its offices in both countries, though the process has been particularly slow in China where the government held up visas for new workers. The FDA is also conducting the first widespread evaluation of the safety and quality of generics, whether made abroad or at home.

The Background

Generic drugs took off in the U.S. during the 1980s with the passage of the Hatch-Waxman Act, which made it easier and cheaper to bring a drug to market. In the 90s, generic production proliferated in India and China, where manufacturing can cost half as much as in Europe or the U.S. But regulation and oversight didn’t keep up. In the face of the rapid rise of generic-drug imports, regulators have adopted different approaches. The European Union mandates batch testing, where a sample from each shipment is tested before it can be released for sale; the FDA focuses on inspections and doesn’t do spot tests, although the FDA and the European Medicines Agency in 2013 agreed to share information on inspections and safety studies. Concerns with generics aren’t limited to India and China: in 2012, Teva Pharmaceuticals of Israel pulled one version of Wellbutrin after regulators said it wasn’t the same as the brand-name medicine.

The Argument

While the FDA’s critics are pleased by its plans to add staff and step up overseas inspections, they think more needs to be done. Some experts would like doctors and patients to be given more information on where drugs come from. One argument is that the key to safer generics is for overseas drugmakers to take responsibility for implementing the necessary quality-control procedures and local regulators to develop the expertise needed to enforce them. That may improve India’s U.S. exports but not benefit all patients. G.N. Singh, India’s top drug regulator, told India’s Business Standard that if he had to impose U.S. standards on factories making drugs for the Indian market, “we will have to shut almost all of those.”

The Reference Shelf

  • The FDA’s FAQ for consumers on generic drugs.
  • history of generic drugs from U.S. Pharmacist.
  • Consumer Reports reviews safety concerns about generic drugs from India.
  • An article in Fortune about Ranbaxy and the charges that led to its $500 million settlement.
  • paper on India’s drug industry and the political and economic issues behind its safety problems by Searching for Safety, a nonprofit group.

First published May 6, 2014

To contact the writers of this QuickTake:
Caroline Chen in San Francisco at cchen509@bloomberg.net
Anna Edney in Washington at aedney@bloomberg.net

To contact the editor responsible for this QuickTake:
Lisa Beyer at lbeyer3@bloomberg.net