Novartis to probe drug approval allegations

The pharmaceutical market has taken off in India, with many local firms producting generic drugs Keystone

Swiss drugmaker Novartis said on Thursday it would investigate alleged drug approval irregularities after an Indian parliamentary report found the country's regulator colluded with pharmaceutical firms to speed up approval procedures.

This content was published on May 10, 2012 minutes and agencies

"We will investigate the allegations presented in the government's report," Novartis said in a statement.

The standing Indian upper house committee on health and family welfare reviewed 39 randomly selected drugs approved by the Central Drugs Standard Control Organization (CDSCO), which oversees clinical trials and the country’s 10,000 pharmaceutical firms.

In the case of 11 drugs, including Novartis' everolimus and aliskiren, it found that "mandatory" Phase III clinical trials - the final stage of testing before a drug is approved - had not been conducted as required.

"The basic purpose of Phase III trials is to determine if there are any ethnic differences that can alter the metabolism, efficacy and safety of the drug when administered to patients of different ethnicities living in India," the report said.

Specifically, in the case of everolimus, the CDSCO relied on the judgment of non-medical staff rather than seeking the opinion of independent experts, the report said.

Novartis said it followed one global ethical standard for conducting clinical trials worldwide and stood behind the safety and efficacy of its products.

Regulator criticised

The committee’s report also criticised the regulator for approving 13 drugs that were banned in the United States, Europe and most developed countries because of side effects.  

“There is sufficient evidence on record to conclude that there is collusive nexus between drug manufacturers, some functionaries of CDSCO and some medical experts,” the report said. “Such irregular approvals spare drug producers the cost and efforts but put Indian patients at risk.”

However the report did not directly accuse the firms of wrongdoing or name any of the CDSCO officials.

Instead, the panel catalogued a series of procedural failures that it said raised questions about how some of the drugs, including those made by pharmaceutical giants, were allowed to be sold in India.

The report underlines the difficult relations between international drug companies and India, a country with a long history of making cheap off-patent medicines.

Western firms were alarmed by New Delhi's decision in March to effectively end Bayer's monopoly on cancer drug Nexavar by issuing the country's first-ever compulsory license. Novartis has also been in an ongoing fight to protect its rights over its Glivec drug.

The panel recommended the government re-examine certain drugs that had been approved, investigate the "gross violation" of Indian laws it had uncovered, and take action against officials alleged to have colluded with the drug companies.

The committee’s findings did however state that the regulator suffered chronic staff shortages and was overwhelmed by its responsibilities in a country where the pharmaceutical industry was growing rapidly.

Emerging markets

The report may fuel concerns over lax supervision of the global industry in emerging markets, where Western drug manufacturers are increasingly focusing their sales effort.

The Indian pharmaceutical market is the fourth largest in the world in terms of volume, according to the Organisation of Pharmaceutical Producers of India (OPPI), the main lobby group of foreign drugmakers. It generates $12 billion in sales every year.

The market has grown 14 per cent annually for the past five years and could be worth $50 billion by 2020, according to estimates made by accountancy and services specialist Pricewaterhousecoopers.

The Glivec case

India subscribed to World Trade Organization rules on intellectual property on January 1, 2005. But the country's own patent laws deny protection to drugs that were patented before 1995 or are modifications or new forms of old medicines.


The Indian authorities have denied Novartis patent protection for the beta crystal, the active ingredient of Glivec, ruling that it is an adaptation of an existing compound. The crystal has been granted protection in 40 other countries.


Novartis says 95% of Glivec users in India get the drug free, but NGOs counter that generic versions of Glivec are one tenth of the price. They say there are 25,000 new cases of chronic myeloid leukaemia in India every year.

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