A dangerous dose of deception

Why in the News

A joint police and drugs control raid on a farmhouse in C.K. Tandya village in South Bengaluru district has uncovered a unit repackaging low cost, substandard and expired pharmaceutical formulations into fresh vials under counterfeit labels of established companies. More than 5,600 vials of counterfeit antibiotic injections were recovered, with the total seizure valued at about Rs 4.91 crore. Police say the suspect medicines have reached more than 90 hospitals and clinics in Karnataka and other States. The unit was found because an agricultural labourer reported a heap of dumped medical waste to the local police, not because a regulator detected it. Section 17B of the Drugs and Cosmetics Act, 1940 already defines a spurious drug and Section 18 already prohibits its manufacture and sale, so the failure sits in enforcement capacity and in the price gap that creates a market for fakes.

What does the law define as a spurious drug?

1. The definition: Section 17B of the Drugs and Cosmetics Act, 1940 defines a spurious drug as one sold under a name belonging to another drug, one imitating another product so as to deceive, or one falsely purporting to be the product of a manufacturer it is not.
2. The prohibition: Section 18 bars the manufacture, sale, stocking, distribution and exhibition for sale of a spurious or misbranded drug.
3. Why relabelling is caught: The offence attaches to the label and the representation, so moving a substandard or expired formulation into a new vial carrying another firm’s label is itself the offence.
4. Who enforces it: Drug inspectors appointed by the State drugs control departments carry out inspection, sampling and prosecution, against the central standards the Act lays down.

How did the network operate?

1. The premises: The unit ran from a rented farmhouse of nearly eight acres behind a compound wall on the outskirts of the village, whose owners live in Bengaluru and seldom visited it.
2. The inputs: The operators procured low cost, substandard or expired pharmaceutical formulations from other States.
3. The process: Those formulations were transferred into fresh vials. Counterfeit labels and packaging of established pharmaceutical companies were then applied so the product would pass as genuine inside the supply chain.
4. The movement of goods: Villagers had seen men entering and leaving on a scooter with no number plate, and courier and e commerce delivery vehicles making regular trips to the secluded location.
5. The evidence recovered: Police seized ledgers, invoices, mobile phones and other records that set out the supply chain, and a Special Investigation Team (SIT) was constituted to work it.

How did the counterfeit drugs reach hospitals?

1. The distributor: The farmhouse operators supplied Krupa Healthcare, a wholesale pharmaceutical distributor on a commercial street in Bengaluru, which then distributed the stock onward.
2. The price incentive: Some of the medicines were offered to hospitals at discounts of up to 50 percent.
3. The sales push: The distributor employed more than 15 medical representatives to promote the medicines and offered commissions to push the discounted stock to private hospitals and medical centres.
4. The product range: The counterfeits were not limited to antibiotics and included critical care injections and cancer medicines.
5. The inter State reach: A joint force carried out simultaneous searches across Karnataka, Himachal Pradesh, Haryana, Tamil Nadu, Maharashtra and Telangana, and a person police describe as a key figure in the network is currently outside the country.

What does a counterfeit drug do to a cancer patient’s treatment?

1. Dependence on exact dosing: Cancer treatment turns on the right drug at the right dose at the right time, so any compromise in authenticity or quality directly affects the course of treatment.
2. Failure that is invisible: A counterfeit, substandard or expired drug may not work as intended, which delays disease control and allows the cancer to progress. The absence of response is often read as the cancer becoming resistant rather than as a drug failure.
3. Unknown contents: A counterfeit product may carry an incorrect dose, inactive ingredients, contaminants or substances producing unexpected side effects, which is more dangerous for a patient already on multiple cancer medicines.
4. The money already spent: Families reported paying more than a lakh and a half rupees for a single immunotherapy vial and lakhs more across the full course, with no way now of establishing whether what was administered was genuine.
5. The decision a patient cannot make: A patient who cannot verify the authenticity of the medicine has no basis on which to decide whether to continue or discontinue treatment.

What has the State disclosed and what has it withheld?

1. What was published: The State government has published the list of antibiotics seized during the raid.
2. What has not been released: The names of the oncology drugs, the hospitals and clinics that may have received the stock, and the names and batch numbers of the counterfeit medicines linked to serious illnesses remain undisclosed.
3. The stated reason: The Karnataka Minister for Health and Family Welfare has said the full list has been communicated to the Union government and all State governments, and that nothing will be revealed while the Special Investigation Team is seized of the matter.
4. What disclosure would enable: Hospitals need the product names and batch numbers to identify exposed patients, and a specialist in healthcare law has put the position that a hospital then carries an ethical duty to inform those patients.
5. The cost of delay: A detailed investigation takes time, and the suspect stock can continue to reach patients while it runs.

Why does the regulatory system not catch this earlier?

1. An under equipped inspectorate: Drug inspectors are the first line of enforcement and are not adequately equipped for the volume and sophistication of the task.
2. Weak deterrence: Punishment for wrongdoing is not stringent enough to deter an operation working on these margins.
3. Price creates the market: The high cost of medicines, cancer drugs in particular, sustains a parallel market for cheaper counterfeit versions, so access and affordability are the underlying issue.
4. Procurement outside the manufacturer’s chain: A hospital or insurer that sources a drug from outside the manufacturer’s own distribution chain loses the ability to verify origin, which is why some oncology providers refuse externally supplied drugs outright.
5. No continuous surveillance: There is no standing system that works to prevent drug rackets and reports publicly on its own findings, so detection depends on an incident being noticed by someone.

Challenges to drug quality regulation in India

1. A fragmented regulator: Licensing and routine enforcement sit with separate State drugs control departments while standards are set centrally, so a firm constrained in one State can operate through another. Eg. The searches in this case ran across six States because the procurement, repackaging and distribution legs each sat in a different jurisdiction.
   The Fix: Move manufacturing licensing for all formulations to a single central licensing authority, so one regulator holds the complete record for every unit.
2. Vacancies in the inspectorate: Sanctioned strength of drug inspectors is low against the number of manufacturing units, wholesalers and retail outlets each inspector is expected to cover. Eg. The expert committee on spurious drugs and drug regulatory issues, which reported in 2003, recommended a substantial expansion of the central and State drug regulatory workforce and its laboratory infrastructure.
   The Fix: Fix a statutory inspector to outlet ratio, fund recruitment against it, and publish the shortfall annually.
3. No end to end traceability: There is no mandatory track and trace across the domestic supply chain, so a vial’s route from manufacturer to hospital cannot be reconstructed after the fact. Eg. Barcoding and quick response code requirements under the Drugs Rules currently apply to a list of top selling brands and to exports rather than to the entire domestic market.
   The Fix: Extend unique identifier coding with a public verification interface to every prescription formulation, and require hospitals to scan each consignment on receipt.
4. Testing capacity is the bottleneck: A seized sample becomes a prosecution only after a government analyst’s report, so laboratory throughput limits how many samples can be drawn in the first place. Eg. Risk based inspections by the Central Drugs Standard Control Organisation (CDSCO) have repeatedly flagged units failing good manufacturing practice, with action turning on laboratory confirmation.
   The Fix: Fund accredited third party laboratories for routine screening, and reserve government analyst capacity for prosecution grade testing.
5. The price gap sustains demand for fakes: Patented oncology therapies are priced beyond most households, so a steeply discounted vial is attractive even where its origin is doubtful. Eg. The National Pharmaceutical Pricing Authority caps prices largely for medicines in the National List of Essential Medicines, which leaves most patented cancer therapies outside price control.
   The Fix: Bring high burden oncology therapies under price control or compulsory licensing, so an affordable legitimate option exists at the point of prescription.
6. Hospital verification has no auditable standard: Hospitals carry a legal duty to procure responsibly and verify authenticity, with no prescribed verification protocol they can be audited against. Eg. The counterfeits in this case entered through a licensed wholesale distributor rather than through an obviously unlicensed channel.
   The Fix: Prescribe a mandatory supplier qualification and batch verification protocol as a condition of hospital licensing, auditable by the State drugs controller.

Conclusion

Every part of the enforcement chain in this case worked after the event. The offence was already defined, the prohibition already existed, and what was absent was anyone looking before the waste was dumped. The unresolved question is disclosure, since the State holds the product names, the batch numbers and the list of affected hospitals, and is withholding them while the investigation runs. The patients with the strongest claim to that information are the ones still under treatment, and whether the list reaches them before the case concludes is where the duty to the patient is tested against the duty to the prosecution.

Back2Basics: Central Drugs Standard Control Organisation (CDSCO)

1. What it is: The national drug regulatory authority of India, functioning under the Directorate General of Health Services in the Ministry of Health and Family Welfare.
2. Who heads it: It is headed by the Drugs Controller General of India (DCGI), who approves new drugs, clinical trials and licences for import.
3. What it regulates: It approves new drugs, vaccines, blood products and medical devices, and lays down the standards that the Drugs and Cosmetics Act, 1940 is enforced against.
4. How it is organised: It is headquartered in New Delhi and works through zonal, sub zonal and port offices along with central drug testing laboratories.

Matching Previous Year Question

“[2024, GS2, 15] In a crucial domain like the public healthcare system, the Indian State should play a vital role to contain the adverse impact of marketisation of the system. Suggest some measures through which the State can enhance the reach of public healthcare at the grassroots level.”