Growing menace of unlicensed and spurious drugs

By Tusha Malhotra and Rashi Punia, Anand and Anand

With an accelerating pharmaceutical industry like India’s, the country is witnessing the growth of an illicit and unregulated drug market. Under Indian law, pharmaceutical products require mandatory approval from the central or state drug authorities to be imported, manufactured, sold or distributed in India.

spurious drugs
Tusha Malhotra
Anand and Anand

Pharmaceutical products are duly tested and approved for safety and efficacy, entities manufacturing and/or packaging these products comply to good manufacturing practice (GMP) norms and other labelling and packaging rules, among other requirements. However, despite the law as it stands, drugs that are spurious, mislabelled, infringing, sub-standard, or lacking the mandatory approvals, are flooding the Indian market, risking public health and safety.

Under the Drugs and Cosmetics Act, 1940, a spurious drug is manufactured under a name belonging to another drug, or which bears the name of a fictitious individual or company as its manufacturer on the label/container, or which purports to be the product of a manufacturer of which it is not. The importation, manufacturing for sale or distribution, sale, stocking, offering for sale, or distribution of a spurious drug is prohibited under this act and can result in imprisonment and/or a fine.

Rashi Punia
Anand and Anand

An unlicensed drug on the other hand is one that is imported, manufactured for sale or distribution, or sold, stocked, exhibited or offered for sale without any licence as prescribed under the act. The penalty for dealing in unlicensed drugs is imprisonment and/or a fine. The act also prohibits the import, manufacture, sale and distribution of misbranded, adulterated, sub-standard drugs or any other drugs, the import, manufacture, sale and distribution of which does not comply with the condition of the licences issued; and provides penalties of imprisonment and payment of fine for the same.

Many of these spurious and unlicensed drugs are supplied in India in an extremely clandestine and surreptitious manner, without maintaining cash memos, demanding prescription, issuing invoices and only against cash payments. One of the notable practices of such trade is also the location of the manufacturer, which has been observed to be strategically based outside India, beyond the reach of Indian authorities.

There are also entities that are manufacturing these drugs with a fictitious address and contact details to escape detection. One such entity is Lucius Pharmaceuticals, which claims to manufacture oncology products that treat serious medical conditions, notably breast cancer, leukemia, lung cancer, hepatitis C, renal cell carcinoma, etc. This entity was found to be bearing an untraceable address in Sri Lanka, a telephone number belonging to a local bank, and is not registered with the Registrar of Companies, Sri Lanka.

However, Lucius’ products are offered for sale in India, at variable prices, on third party websites. They are being supplied through pharmacies in limited quantities to verified customers, without issuing any invoices or demanding a prescription.

Recently, the High Court of Delhi in a writ petition titled Pfizer Inc & Ors v Union of India & Ors has identified the drugs of Lucius Pharmaceuticals as spurious and noted that their import and sale is illegal. The court has directed state authorities to take appropriate steps to prevent the sale of the spurious drugs, and to prosecute offenders. The concerns over Lucius’ drugs have been voiced by other countries as well.

Many spurious and unlicensed drugs are also advertised and supplied through online mediums on a pharmacy’s website or on e-commerce platforms, or even on social media websites. The alarming fact is that many traders advertising and supplying these drugs, which are schedule H or X, do not even ask for a requisite prescription mandated under law.

The Madras and Delhi High Court have taken cognizance of the issue of illegal online sale of medicines in the public interest litigations, The Tamil Nadu Chemists and Druggists Association v The Union of India & Ors, and Dr Zaheer Ahmed v The Union of India & Ors, respectively. An interim ban has been issued by these courts on the online sale of medicines without the prescribed licences. The Madras High Court as also issued a direction to the centre to bring into force the draft rules issued governing the online sale of medicines.

A practical challenge in prosecuting these drug rackets, to effectively erase the availability of such spurious and unlicensed drugs from the market, is to trace the manufacturer. In cases like these, where the public health and safety is at risk, there is a need of increased vigilance and surveillance by the relevant authorities to timely monitor the market and borders. It is also imperative that the pharmaceutical companies involved in the trade, including the patentees, take timely action in reporting this growing menace.

Tusha Malhotra is a partner and Rashi Punia is an associate in the litigation department at Anand and Anand

spurious drugs

Anand and Anand
B-41, Nizamuddin East,
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Tel: +91 120 405 9300