Anything that moves

Maggi ban: Just another instance of Indian nationalism blinding us to real problems

When it comes to allegations against local drug firms, we'd rather claim to be the victims of a conspiracy than investigate the charges.

Now that accredited Indian laboratories have cleared Nestlé of allegations that its popular instant noodles contain more lead than permitted, it’s worth underlining the unsavoury role nationalism plays in such matters. When the Maggi controversy first broke, I wrote a column arguing that the ban on instant noodles constituted bureaucratic and political over-reach based on suspect data.

A number of friends reacted negatively to the piece, irrespective of their ideology. Conservatives disliked my criticism of certain ayurvedic practices, while leftists reflexively ranged themselves against the multinational. It is commonplace these days for readers to accuse journalists of being shills for political parties or corporations, but I was disturbed that a couple of acquaintances asked if I was on Nestlé’s payroll. Others suggested that the firm could easily absorb the loss even if it had been wronged, ignoring not only middle-class traders who lost money when the company’s stock plummeted, but hundreds of contract workers who were left without a livelihood.

It’s instructive to compare the attitude of the government and public to the Maggi issue with their response to the succession of controversies that have hit our pharmaceutical industry in the past decade. If ensuring the health of citizens is among a government’s prime objectives, it ought to make no difference whether a firm accused of unsafe practices is Indian or not. After all, as I wrote in my Maggi column, our immune system has not evolved to distinguish between foods produced by Indian and foreign corporations. Yet, the government has repeatedly defended Indian companies that have faced censure from international regulators, and conducted no serious investigation of its own into possible fraud by Indian pharmaceutical firms.

Fabricated tests

It began almost a decade ago with a report by the World Health Organisation charging Vimta Laboratories with fabricating tests related to AIDS drugs supplied to African nations. Two newly recruited executives at Ranbaxy, which is among India’s largest drug manufacturers and had hired Vimta to test its formulations, decided to dig deeper into the processes employed by their own firm, and discovered chicanery on a gigantic scale. One of these men, Dinesh Thakur, turned whistleblower, and alerted the American Food and Drug Administration to Ranbaxy’s malpractices. These included using branded drugs in place of generics in bio-equivalence testing, and, in markets like Africa and Latin America where regulations were lax, making up data wholesale.

The American agency moved very slowly on the complaint, but beginning in 2008, Ranbaxy faced a series of restrictions in the United States. Ultimately, in 2013, the company admitted civil and criminal guilt in an American court, and paid a fine of $500 million. The best investigative article on the whole affair is Katherine Eban’s piece in Fortune magazine titled Dirty Medicine. It leaves little doubt not only about Ranbaxy’s culpability, but about the active role played by its top management in perpetrating fraud.

Did the Indian public respond by thinking twice about buying Ranbaxy products? Did Malvinder Singh, one of Ranbaxy’s promoters and CEO for much of the period in question, face any social disgrace for his role in the deceit? Did the Indian government build on the FDA’s allegations by launching thorough probes of its own? No, no, and no. The promoters of Ranbaxy sold their stake to Daiichi Sankyo for $2 billion in 2008, with Malvinder Singh staying on as CEO.The Japanese corporation, having failed to unearth the rot in Ranbaxy during due diligence, sold it at a substantial loss a few years later.

Conspiracy alleged

Far from investigating Ranbaxy independently, the United Progressive Alliance government released a statement  alleging a conspiracy against India. “Vested interests are raking up isolated issues reported regarding technical deficiencies on manufacturing practices," it said, adding, “Some of the spurious drugs detected in the international markets, alleged to be exported from India, are desperate attempts by other countries getting affected by the strength of Indian pharma industry.”

In the past couple of years, many Indian companies have faced suspensions on sales following international scrutiny. The most recent scandal involves GVK Biosciences. Europe’s premier medical agency recommended suspending medicines connected with trials conducted by GVK after finding systematic data manipulations of electrocardiograms over a period of at least five years. The National Democratic Alliance responded through the commerce ministry rather than the health ministry, exactly as the UPA has done. Commerce Secretary Rajeev Kher in effect endorsed malpractice by stating,  “The past few years have seen a lot of action where the fault was not seen in the substance of the medicines but in the processes. We feel that this approach needs to be tempered.”

The same conspiracy theory trotted out in the Ranbaxy case, about Big Pharma wanting to crush Indian generics, is being used by advocates of GVK today. The Bharatiya Janata Party has gone so far as to unilaterally cancel trade talks with the European Union in protest against the GVK decision, even though many of GVK’s tests were done for foreign companies, which have suffered equally as a result.

Similar charges

Those who claim that governments of affluent nations are hand-in-glove with manufacturers of patented medicines not only fail to understand the complex and often conflicting interests operating in the health care and insurance markets, but also fail to recognise that the first push to the dominos was provided by a World Health Organisation investigation related to medicines sold in Africa. This July, the WHO exposed the dubious tactics of Chennai-based Quest Life Sciences. The accusations of backdating paperwork, using the same ECGs multiple times pretending they were from different patients, and so on, are very similar to the allegations against GVK. Is the WHO also working at the behest of Big Pharma, then? If not, why is it difficult to believe that GVK might be echoing the practices of Ranbaxy and Quest? Should the Indian government not at least conduct an enquiry of its own before jumping to the defence of these privately held companies?

India’s success in the field of generic drugs has given us much to be proud about. That success, it is now apparent, has a dark side to it, whether it be clinical trials done on underprivileged patients without proper informed consent or data fudged to speed up clearances. It’s best for consumers and for the economy that we face malpractice head on, and restore our image by improving manufacturing processes rather than through some PR exercise.

Did the German government and public react to news of Volkswagen’s fraud by whining about American attempts to stifle German auto exports? We come across as immature and petulant when we call off important trade negotiations over regulatory matters best sorted out between medical experts, and when we cry conspiracy at the drop of a hat from a misplaced sense of nationalism.

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HBX Interface | Students can view profiles of other students in their cohort
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HBXers at ConneXt, with Prof. Bharat Anand
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