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Generic Drugs

As Imports Rise, Regulators Struggle

By | Updated May 6, 2014

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 the U.S. Food and Drug Administration in the last year banned imports of generic drugs from at least five Indian factories that failed FDA inspections. Generic drugs now account for 80 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, which has had its own scandals involving tainted drugs.  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. With only a handful of inspectors in those two giant countries, the agency is focusing its efforts on improving the quality of work done by its Indian and Chinese counterparts. 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, one of India’s biggest makers of generic drugs, Ranbaxy, paid a fine of $500 million 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’s director, Margaret Hamburg, spent a week in India hammering home the message delivered by the factory bans.  The FDA will expand its offices in India, train regulatory officials and strengthen inspections of overseas plants, she said. The push for improvement is funded by new fees collected from the generics industry that were approved by Congress in 2012.  The FDA is also using $20 million of the money for 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 exports, 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 December agreed to share information on inspections and safety studies.  Some Indian manufacturers are considered to have stringent safety standards, but independent estimates of the extent of counterfeit medicines sold in the country range from 12 percent to 25 percent. 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

At a Washington hearing in February, researchers reported finding signs of contamination in imported drugs and doctors spoke of their need to have patients try different versions of generics until they find one that performs as promised. 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. In April, the chairman of a U.S.-Chinese safety commission, Dennis Shea, called the FDA “woefully, inadequately staffed” in China. Some experts would like doctors and patients to be given more information on where drugs come from. Hamburg said 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 in January 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.

(This QuickTake includes a corrected description of the figures shown in the chart.)

(First published May 5, 2014)

To contact the writers of this QuickTake:

Caroline Chen in New York at cchen509@bloomberg.net

Anna Edney in Washington at aedney@bloomberg.net

 

To contact the editor responsible for this QuickTake:

John O'Neil at joneil18@bloomberg.net