Indian pharmaceutical industry has been importing bulk drugs and other pharmaceutical ingredients from China for several years now as they have been cheaper than the domestic and other overseas sources. These cheap imports from China was one main reason for the collapse of Indian bulk drug industry a decade ago. That time the bulk drug materials were cheaper but not of bad quality. Over the years, huge quantities of substandard drug materials were getting shipped into the country from the Chinese suppliers. It was to ensure the quality of imported drug materials, the Centre made registration of all imports of drugs and pharmaceuticals compulsory from April 1, 2003. The registration system was expected to bring an end to the inflow of poor quality drug materials through a scrutiny of import applications and inspection of manufacturing sites of exporters. For one year since 2003, there has been a noticeable decline in the import of substandard drugs into the country. But, there is a steady rise in the import of substandard and spurious APIs since then and it has been quite bad during last twelve months. Three consignments containing substandard drugs imported by traders were seized by the customs in Chennai last month. A few weeks before, another consignment containing spurious drugs was also seized in Mumbai. Such drug materials of doubtful quality must be entering the country through other smaller ports where the customs scrutiny is less stringent.

Obviously, there is a collusion between the traders in China and India behind these imports. After repeated seizures of substandard drugs originating from China, CBI has been entrusted to investigate the nexus between the traders of both the countries. China seems to be adopting a dual strategy of directly supplying fake drugs with `made in India’ labels to the international market and also exporting substandard APIs to unscrupulous traders in the country through sea and air routes. The traders in India are just looking at the huge margin of 20 per cent or more if they import from bogus manufacturers as against a margin of 7 to 8 per cent from licensed manufactures. Quality of drug raw materials from China has been under scanner of regulatory authorities of the US and Europe after the safety scare caused by Baxter's blood-thinning drug, heparin, in the US market after April 2008. Investigations by the US authorities found that some of the active pharmaceutical ingredients for heparin were sourced from the Changzhou SPL plant in China, which the US FDA had never inspected. Baxter pulled back the product from the market soon after. Later, German manufacturer Rotexmedica also withdrew its heparin product after severe allergic reactions were reported by patients from the German market. The heparin controversy should have been a clear warning signal to Indian drug authorities while allowing imports from China. Clearing import registration applications by just screening will not be enough. As per the registrations norms, DCGI has the power to inspect foreign manufacturing facilities before clearing the applications. Such inspections are not being carried out ever since the import registration was made compulsory. There is also a need for total coordination between the customs authorities and the office of the DCGI before clearing drug and chemical consignments from all ports. In the absence of such vigilance and coordination, there is a danger that a large percentage of medicines marketed in the country could be made of substandard drug materials.