Bad medicine: The value of monitoring banned drugs

These are tough times around the world when it comes to regulating flawed medicines that are banned from the marketplace.

Last month, the Washington Post reported details from a DEA database of 76 billion opioid pills sold in the United States between 2006 and 2012, showing that some six companies distributed 75 percent of the pills during that period.

Vaccine and heart drug recalls from China have also been hard to enforce, and this has been a challenge more broadly related to recalls around romaine lettuce, problematic smartphones and cars.

While there are no easy answers, the Drug Enforcement Agency (DEA) database and our recent research forthcoming at Social Science and Medicine indicates that there is value in tracking and monitoring banned medicines with detailed nationally representative databases. Perhaps targeted monitoring using anti-counterfeiting technologies will also help, and so will naming and shaming firms using insights from behavioral economics.

Another answer might be in setting up a global body that harmonizes enforcement standards across rich and poor countries, as research from Amir Attaran and his coauthors has indicated.

Otherwise, there are several reasons why bad medicine will continue to plague global health.

First, while some firms may be able to regulate themselves, there might not be enough of an incentive for private profit-maximizing entities to do so. Second, there are clear cross-border implications on the supply and demand side. Firms can produce flawed medicines in one country and find channels to diffuse them into another. In addition, patients and physicians, especially those in developing economies, might want to take flawed medicines when there are no alternatives.  

Third, the issue goes beyond medicines and pertains to other products that have an implication for human health. As mentioned above, consuming romaine lettuce, using problematic smartphones and flawed emission-inducing cars all have implications for consumer well-being and more generally for public health.

Fourth, one also has to recognize the nuances given the overlaps between a firm-specific recall and an industry-specific ban to a broader counterfeit and substandard product tracking effort.

But we need a comprehensive way to address these issues now, since selling problematic products today may destroy incentives for the research and development of socially beneficial products tomorrow, thereby creating market distortions and failures.

This is more so in a world where drug pricing debates are impacting health care policies and the U.S. and other countries are considering legitimizing the importation of drugs from Canada with concerns about associated impact on drug quality.

Our research shows that there are more lessons to be learned if we turn to enforcing bans on selling medicines from developing economies such as India, where weak institutions and resource constraints make such enforcement difficult.

Previous studies have tended to use randomly selected drug samples from the market to test for the prevalence of banned or recalled products. In contrast, we use a pan-India database that tracks more than 50 percent of overall sales of medicines in the country. We discovered some interesting patterns in sales of banned medicines in India (totally about $2.1 million) between 2007 and 2013. 

First, contrary to perception, both domestic Indian firms and multinational firms like GlaxoSmithKline and Abbott sold banned medicines in India during this period.

Second, counterintuitively, we found that richer regions (like Maharashtra and Karnataka) witnessed more sales of banned medicines after the ban than poorer regions. 

Third, while overall industry sales declined after bans in India, the infringement ratio, calculated as a share of post-ban to pre-ban sales, varied by banned medicine-region pair. Finally, established firms were more successful than new firms in selling popular banned medicines in India.

Overall our findings are consistent with other research suggesting that the effort to monitor banned medicines must be multidimensional and multi-stakeholder oriented and potentially also national, to make communities healthier and improve global health.  

Chirantan Chatterjee is a 2018-2019 Campbell and Edward Teller National Fellow at the Hoover Institution, Stanford University. He is also an associate professor in economics and business policy at Indian Institute of Management, Ahmedabad, where he holds the ICICI Bank Chair in Strategic Management.