UK: Tackling Counterfeit Medicines In India

Last Updated: 12 April 2018
Article by Pratik Avhad

India is one of the leading global producers of low-cost generic medicines due to its high domestic demand and inexpensive manufacturing costs. The country's pharmaceutical market is the world's third largest in terms of volume, but the thirteenth largest in value.1 However, counterfeiting is pervasive, with an estimated 20 per cent ($4.3 billion in 2013-14) of India's drug market comprised of counterfeit drugs.2,3 While counterfeiting is a global issue, it is much more prevalent in low and middle income countries with an estimated 10 to 30 per cent of medicines in these countries being counterfeit, compared to just one per cent of medicines in high-income countries.4

A counterfeit medicine is defined as one that either contains the wrong active ingredient, none of the specified active ingredient, or the correct active ingredient at the wrong dose.5 It is estimated that three quarters of counterfeit medicines produced globally originate from India, which seriously undermines the international reputation of its rapidly developing pharmaceutical sector.6 Some of the main reasons for the large counterfeit medicines market in India include:

  • limited access to medical care, especially in rural areas
  • fragmented supply chain
  • lack of consumer awareness
  • prevalent practice of self-medication
  • high cost of genuine medicines
  • weak enforcement of legislation and corruption
  • prevalence of internet pharmacies
  • technology advancements in counterfeiting

Most counterfeit medicines are taken unknowingly, as detecting counterfeit medicines is difficult, even for health care professionals. 

Challenges posed by counterfeit medicines

The large counterfeit trade in India has created a number of complex challenges for the health care and life science industries.

  • Lost business opportunities: the presence of counterfeits can result in the loss of market share and business opportunities for manufacturers of genuine pharmaceutical products. It is estimated that counterfeit medicines contribute to a loss of $46 billion annually to pharmaceutical companies worldwide.7
  • Undermining the adoption of generics: an estimated 90 per cent of the value of India's drug market is dominated by branded generics.8 In order to reduce health care costs, many governments promote the use of less expensive unbranded generic medicines, but the availability of counterfeits is an obstacle to uptake.
  • Increasing the economic and social burden: the use of counterfeit medicines results in an increase in cost to the health care system due to the need for further interventions for unwanted side effects and/or advanced disease progression. This is a particular issue for Indians, where out of pocket drug spending is already high at almost 70 per cent, and affordability levels are low.9
  • Resourcing: to tackle the issue of counterfeits, the Indian government has employed various anti-counterfeiting strategies, but with limited impact, largely due to India's Central Drugs Standard Control Organization, the country's drug regulator, having only 323 employees in 2014, about two per cent the size of the FDA. This under-resourcing is likely to undermine the success of any future strategies. 10,11  

Strategies to overcome the issue of counterfeit medicines

There are a number of strategies that can be implemented to tackle the issue of counterfeit medicines.

  • Raising public awareness: containing the spread of counterfeit medicines is a big challenge, but educating patients and improving awareness is a good place to start. Health care professionals, medical practitioners and pharmaceutical companies all have a role to play in notifying patients and educating them to detect the presence of counterfeits. This is a sizeable challenge given that over a quarter of the population is illiterate, and almost 70 per cent of the population live in rural areas where self-medication is prevalent. However, approximately 78 per cent of India's 650 million mobile phone users have access to the internet, and online education may be a far more effective way to tackle the issue quickly and efficiently.12
  • Implementing innovative anti-counterfeiting measures: inadequate anti-counterfeiting measures by pharmaceutical companies make their products vulnerable to counterfeiting. The presence of counterfeit medicine brands in the market lead to drug recalls and subsequent damage to brand image and company reputation. Most companies are following worldwide mandatory methods like mass serialisation in which machine-readable codes containing a serial number are added to each pack of medicines, enabling the product to be tracked and traced. Pharmaceutical companies can fight the rise of counterfeiting by implementing new generation anti-counterfeiting technologies, such as the use of forensic markers (chemical, biological and DNA taggants), cloud-based supply chain data repositories, and blockchain technology in supply chains. Companies can also use external providers of anti-counterfeiting technologies to avoid the need to create their own systems. 
  • Developing stricter laws: in India, The Drugs and Cosmetics Act (1940) regulates the import, manufacturing and distribution of drugs, empowering government agencies to inspect, seize and confiscate products found to be 'adulterated spurious misbranded'. The act was amended in 2008, which increased the punishment to offenders, but there are still certain challenges, including inconsistent application of laws across states, weak drug quality investigation systems, and weak prosecution of counterfeit medicine manufacturers. According to the WHO, 50 per cent of drugs sold online are fraudulent.13 New protocols which the EU and US aim to implement by 2019 are intended to tackle this. The EU's Falsified Medicines Directive will require companies to adopt mass serialisation, whereas the US Drug and Security Act will require authentication at every supply chain juncture. The EU is also fighting illegal online pharmacies that supply counterfeit medicines by requiring them to display a logo identifying themselves. This logo links to the website of the national competent authority listing all legally operating online pharmacies. More effective adherence to existing laws and adopting stricter laws has the potential to improve the fight against counterfeiting.

Conclusion

Global pharma companies are looking to India as a future growth prospect due to its fast growing economy, ageing population, growing middle-class, increasing presence of chronic diseases, inexpensive labour, and improving health care provision. However, the counterfeiting crisis is putting India at risk of losing foreign investments. Improvements to the regulatory landscape, and stricter punishments for manufacturers of counterfeits could significantly improve investor sentiment. Without strong rhetoric and action, India risks losing valuable investment from the pharmaceutical industry, and consequently, undermine the health of its population.

Footnotes

1 Indian Pharmaceutical Industry, February 2018. See also: https://www.ibef.org/industry/pharmaceutical-india.aspx

2 Fake Drugs from India Present a Public Health Threat, 24 February 2014. See also: https://safemedsonline.org/2014/02/fake-drugs-india-present-public-health-threat/

3 Singh J. Fake drugs constitute 25% of domestic medicines market in India: ASSOCHAM, 21 July 2014. See also: http://www.downtoearth.org.in/news/fake-drugs-constitute-25-of-domestic-medicines-market-in-india-assocham-45393

4 Counterfeit drugs, 7 April 2014. See also: https://www.cdc.gov/features/counterfeitdrugs/index.html

5 Counterfeit medicine. See also: https://www.fda.gov/Drugs/ResourcesForYou/Consumers/BuyingUsingMedicineSafely/CounterfeitMedicine/

6 Verma S, Kumar R and Philip P. The Business of Counterfeit Drugs in India: A Critical Evaluation. See also: https://www.ripublication.com/ijmibs-spl/ijmibsv4n2spl_04.pdf

7 Five worrying facts about fake medicine, 27 March 2017. See also: http://www.pharmafile.com/news/513663/five-worrying-facts-about-fake-medicine

8 Galani V. Choice of Better Medicine in India: Branded Vs Generic Medicine, 2 June 2017. See also: http://medcraveonline.com/PPIJ/PPIJ-05-00125.pdf

9 WHO Health financing profile 2017: India. See also: http://apps.who.int/iris/handle/10665/259642

10 Kannan S. Counterfeit drugs targeted by technology in India, 11 October 2011. See also: http://www.bbc.co.uk/news/business-15208595

11 Fake Drugs from India Present a Public Health Threat, 24 February 2014. See also: https://safemedsonline.org/2014/02/fake-drugs-india-present-public-health-threat/

12 Iyengar R. India poised for smartphone revolution, 28 September 2017. See also: http://money.cnn.com/2017/09/26/technology/india-mobile-congress-market-numbers/index.html

13 Growing threat from counterfeit medicines. See also: http://www.who.int/bulletin/volumes/88/4/10-020410/en/

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