In July last year, the European Union banned 700 generic drugs tested by GVK Biosciences following charges of manipulation of clinical trial data for bio-equivalence testing made by French medicines standards agency ANSM. The ANSM had alleged that the ECG data of volunteers examined between 2008 and 2014 by GVK was manipulated, and, hence, the tests conducted by the company were not reliable. The drugs tested by GVK during the period were subsequently withdrawn from all EU markets in August despite no evidence or complaints regarding the quality or efficacy of the medicines. The drugs suspended by the EMA include those made by US firms Mylan Inc, Abbott Laboratories, as well as large Indian companies such as Lupin Ltd and Dr Reddy’s Labs. It is a fact that most of these drugs are already in EU markets for many years without any adverse pharmacovigilance reports from any member state. At the time of suspension of these drugs even the French regulator had stated that the measure is out of precaution and there was no reason to suggest the drugs were ineffective or harmful. After the EU action on GVK, the government did set up a panel of experts in October last to investigate the matter and found no manipulation of data by the company.
GVK is one of the many large Indian pharmaceutical firms to come under international scrutiny over quality issues during the last two to three years. Last month Dr. Reddy’s Lab and Sun Pharma received fresh notices from the US FDA over the standards in their manufacturing facilities. These notices are likely to hit the exports of both the companies seriously during the current year. In the case of GVK, the Union government has decided to take up the matter with European Union at the forthcoming bilateral talks under Broad-based Trade & Investment Agreement (BTIA) during this month. How far these talks will help to revoke the ban on GVK products by EU is something to be seen. Certainly Indian government will put some pressure on EU as European nations are India’s key trade partners. These repeated actions by the US FDA and European Medical Agency on standards in the manufacturing facilities and labs of large Indian pharmaceutical companies seem to be rather motivated and not that genuine. Large scale export of generic drugs at competitive prices from India to the US and European markets have been hitting the sales of major pharmaceutical giants of both these markets. These giants have to counter cheaper exports from India for their existence and the governments there have to oblige them and the best way is to impose non tariff barriers. Indian companies and the government have to think of some innovative counter strategies to overcome these hurdles. Bilateral talks may not always help in the fast changing global business environment.