Report On: Legal and Ethical Issues in Drug Industry: Directorate of Drug Administration Point of View

Legal & Ethical Issues in Business MBA- 515, Section- 1

Submitted By

Syed Zubayer Alam


Submitted To: Dr. Tanvir A. Khan

School of Business Independent University, Bangladesh

6th July, 2009

Table of Contents
Executive Summary 1 2 3 Introduction Purpose of the Study Literature Review 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 4 5 6 Problem Statement Methodology Hypothesis 6.1 6.2 7 8 9 Findings Recommendation Conclusion Legal Issues Ethical Issues Drug Drug Regulation in Bangladesh Power of Drug Inspectors Drug Manufacturers in Bangladesh Good Manufacturing Practices (GMP) Drug Testing Procedure of Bangladesh Food Supplement Open Trade Commodities (OTC) in Drug Industry 1 2 2 2 2 3 3 4 4 5 5 5 6 6 6 6 6 6 10 11 12

10 References

Executive Summary
This paper serves the purpose of people who are interested in legal and ethical issues concerning drug industry of Bangladesh. Here, three of each legal and ethical issue about the operation of vendors in Bangladeshi drug industry is explored and some recommendation provided to sooth the discussed problems. Considering the limitation, the author welcomes knowledgeable review and criticism about the paper.


1. Introduction
Drugs are the essential product for the human being as it has the capacity to maintain or recover anticipated health condition. World average drug consumption per people is rising due to changing global environment that cause decreasing immune system of human bodies. The case of Bangladesh is not exempt from the fact. If we take a look at the market condition of this country’s drug industry, it will apparently look like a pure market competition as evidentially proven when physicians prescribe various brands of same drug and same drug of various brand found in shops in a plenty of amount. But when it comes to appraise the industry in terms of regulation, the regulatory authority is not satisfied with the activities of vendors, who are playing role as manufacturers, importers and shopkeepers. This rumor becomes significant when patients loyalty and avoidance towards specific brands of drugs, drug inspectors are being assaulted in production facilities and drug markets, doctors’ are recommending ‘food supplement’ to patients. These incidents do not clarify the format of market competition rather it deems to show disqualifiers existence and their unlawful resistance to leave the market. The nation has the right to demand deep investigation, clarification and solution if something found troublesome because the capacity of drugs can be backfired if supplied from the wrong hand.

2. Purpose of the Study
Purpose of the study is to explore, gather knowledge about certain legal and ethical issues and to provide solutions concerning the activities of pharmaceutical manufacturers, importers and sellers in the drug industry.

3. Literature Review
3.1 Drug Drug contains four groups of substances. First, any substance used or intended to be used internally or externally for treatment, mitigation or prevention of diseases in humans or animals. Secondly, any tool or substance used in clinical operations or first aids is drug. Thirdly, other than food, any substance used to affect structure and functions of human body. Fourthly, anything used to destroy vermin or insect which cause disease in humans or animals. [Ref. 1]


3.2 Drug Regulation in Bangladesh The Directorate of Drug Administration (DDA) is the Drug Regulatory Authority (DRA) for Bangladesh. It is under the Ministry of Health & Family Welfare, Government of the People's Republic of Bangladesh. This Directorate supervises and implements all prevailing Drug Regulations in the country and regulates all activities related to import, procurement of raw and packing materials, production and import of finished drugs, export, sale, pricing, etc. of all kinds of medicine including those of Ayurvedic, Unani and Homoeopathic systems. DDA is also empowered by the Govt. to act as the Licensing Authority (LA) of drugs. There are 33 district offices of the Directorate in the country. All officers of the Directorate function as "Drug Inspector" pursuant to the Drug Laws and assist the Licensing Authority for properly discharging his responsibilities. The mission of the Directorate of Drug Administration (DDA) is to ensure that the common people have easy access to useful, effective, safe and good quality essential and other drugs at affordable price. [Ref. 2] 3.3 Power of Drug Inspectors The powers of a drug inspector are as follows: • • • • • • • Access and inspect any place with or without license deem to be used as private health care facility. Examine any tools such as apparatus, appliance and equipment used or found in the facility. Take any blood sample or product, human tissue or fluid for examination. Acquire any object found in the premises which they believe necessary to inspect. Take any copy of document of testing, procedure or task done on the premises of a facility which is licensed under DDA. Ask any owner to show cause, if related premise or facility found not complied with law. They can also directly suggest the owner to close inappropriate facility. Ask any specific information to any owner either in written or verbal form. Any licensee under DDA is bound to co-operate with the inspectors. [Ref. 3]


3.4 Drug Manufacturers in Bangladesh There are 263 pharmaceutical manufacturers in Bangladesh producing more than 22,000 products comprising of about 1,200 active pharmaceutical ingredients (API). Bangladeshi pharmaceutical manufacturers have spread their wings to more than 60 countries including UK and the other EU countries. The macro picture looks very promising as most of the top 20 manufacturers are in the queue of achieving similar international recognitions within next couple of years. If we take a look to the market shares, the top 50 pharmaceutical manufacturers enjoy more then 95 per cent of market share. The rest 213 manufactures supply to less then 5.0 per cent of the market. Out of these 213 manufacturers, at least half of them have already turned into sick industries today and they are not in a position to invest for improvement. [Ref. 4] 3.5 Good Manufacturing Practices (GMP) Good Manufacturing Practice or GMP (also referred to as 'cGMP' or 'current Good Manufacturing Practice') is a term that is recognized worldwide for the control and management of manufacturing and quality control testing of foods, pharmaceutical products, and medical devices [Ref. 5]. It is promoted by the WHO GMP Guidelines, implemented by the pharmaceutical manufacturers and monitored by the regulations promulgated by the Drug Regulatory Authorities (DRA). The regulations relating to the GMP are backed by the law of the land and require that manufacturers, processors and packagers of medicines and other medical products and devices take proactive measures to ensure that their products are safe, efficacious and meets required quality standard. Failure of manufacturers to meet the GMP requirements may result in serious consequences including recall, seizure, suspension or cancellation of the licenses, and other punitive measures. GMP is also sometimes referred to as the cGMP where the "c" stands for "current" demanding the manufacturers to update their technologies and systems in order to comply with the recent scientific and regulatory developments. The cGMP reminds the manufacturers and the DRAs to make periodic updates of their systems and regulations. In 1940 Winthrop Chemical Company of USA had accidentally contaminated Sulphathiazole with Phenobarbitone causing death of hundreds of human beings. The incident prompted the US Federal Drug Administration (FDA) to implement a detailed control in production throughout pharmaceutical industries resulting in the introduction of the 'Production Control Standards' for the pharmaceuticals. In 1963 the US FDA took another step ahead and made a more elaborate document on the manufacturing 4

of pharmaceuticals and termed it as the "Current Good Manufacturing Practices (cGMP)". In 1968, the WHO initiated a process to formulate a GMP document as a standard guideline to be followed by all member states. The document was published in 1975 as the famous WHO Guidelines on the GMP. [Ref. 4] 3.6 Drug Testing Procedure of Bangladesh A drug testing laboratory has one of the complementary functionality of drug regulatory authority. The DDA of Bangladesh has got only one drug testing laboratory in Chittagong. Each and every aspect of the laboratory in terms of operation is insufficient. As there is one single laboratory, manufacturers are crowding in there. Only the main components of drugs are tested there. Some companies have their own drug testing facility especially those who intend to export test all material by their own or they are financially solvent [Ref. 6]. DDA’s drug testing laboratory does not have enough facility to cross-check all reports. Sometimes disputed testing report found while both DDA’s laboratory and a firm’s own laboratory provides report of a same sample. In order to mitigate this kind of problem, there is no ‘central reference laboratory’ or ‘appellate laboratory’ in the country so far. [Ref. 4] 3.7 Food Supplement A dietary supplement, also known as food supplement or nutritional supplement, is a preparation intended to provide nutrients, such as vitamins, minerals, fatty acids or amino acids, that are missing or are not consumed in sufficient quantity in a person's diet. Some countries define dietary supplements as foods, while in others they are defined as drugs. [Ref. 7] 3.8 Open Trade Commodities (OTC) in Drug Industry Open Trade Commodities are some sort of product which has no such boundaries to be bought and sold in any amount. In trading OTC, buyers and sellers require no such qualification. Not considering special cases, OTC product is not harmful if used according to its purposes. Unlike Bangladesh, most countries have authorized lists of OTC products. [Ref. 6]


4. Problem Statement
In Bangladesh the vendors (Manufacturers, Importers, and Sellers) of pharmaceutical industry are not doing certain this legally and ethically (see Hyporhesis). Those are both offence and capable of making harm to public health.

5. Methodology
In order to gather information, in dept interview technique has been applied mostly with personnel of Directorate of Drug Administration (DDA). Moderate level of books consultation and internet sources has been used.

6. Hypothesis
6.1 Legal Issues L1: Importers are trafficking unauthorized\unregistered drugs into the country. L2: Sellers not showing stock-in receipt to the concerning authority. L3: Producers good manufacturing practice (GMP) does not followed by certain companies. 6.2 Ethical Issues E1: Importing drugs but treating those as food supplement. E2: Selling open trade commodities (OTC) without having approved list. E3: Exploitation of deficiency of drug testing procedure by the manufacturers.

7. Findings
L1: Importers are trafficking unauthorized\unregistered drugs into the country. Some importers use to bring medicines in the country which are not registered through unfair means either by not declaring or by carrying luggage. These sorts of medicines can be of sub standard quality that might be insufficient to use as medicine but are sold within the boundary of the country at a cheaper price. As per market condition and affordability of most of the 6

population, these trafficked medicines are easily sold at relatively lower prices than the prices charged on the registered medicines. Consequently, sellers of the registered medicines are suffering for this kind of action. Moreover people’s lives are at risk if they purchase those drugs. [Ref. 6] Drug trafficking is a violation of drug act which states unregistered drugs are to be treated as misbranded drugs and also sellers are not suppose to sell, stock or exhibit such drugs via contravention of fair import procedure. [Ref. 8] L2: Sellers not showing stock-in\out receipt to the concerning authority. Some sellers and few manufacturers are willingly does not want to show documents of acquisition of materials to be sold or processed further to the drug inspectors, personnel of drug administration. This kind of practice may cause serious damage to the public heath. Suppose any batch or lot of manufactured or imported drugs are proven or declared to be dangerous to implement are floating in the market required to be withdrawn as soon as possible. If the vendors do not show the stock in or out documents to the regulatory authority, then it becomes impossible to execute required action by the drug inspectors within a given power. [Ref. 6] This kind of action from the part of the vendor violets the drug act by putting obstacles on the powers of inspectors one of which is demanding any relevant records and register for inspection. On the other hand, vendors are to prepare all relevant business documents and maintain register which are understandable by common bodies. [Ref. 9] L3: Producers good manufacturing practice (GMP) does not followed by certain companies. At least 56 companies turned sick in terms of financial abilities. They are not in a position to invest for improvement. Concerning good manufacturing practices is far beyond to discuss about these companies. Other companies who are more emphasized or just maintaining standard GMP benchmark so that the products are manufactured not only edible with reliability but also export quality. On the other hand, the sick players are only concerned with the local market. They usually offer low prices to attract poor consumers, making little profit or just carrying business to recover initial huge investments. This sort of outlook towards


business can harm price sensitive customers. Managing existence of the crippled or companies in a state of slow death is highly influenced by politicians. [Ref. 6] GMP guidelines are produced by world health organization (WHO) technicians. WHO suggest its member states’ or countries’ Drug Regulatory Authority (DRA) or Food & Drug Authority (FDA) whichever applies to enforce standardization in quality of procurement. In Bangladesh, pharmaceutical companies having solvencies and capabilities try to maintain GMP as best as possible to their sides. But as there are only policies exist to maintain GMP which only suggests guidelines for quality production procurement rather than setting any crystal clear law, it is almost impossible to enforce surviving or loosing companies to give importance to GMP. [Ref. 10] E1: Importing drugs but treating those as food supplement. Some importers bring products leveled as ‘food supplements’ from abroad are not actually food in most cases. These are by definition drugs according to Drug Act. These so called ‘food supplements’ are considered drugs even in the abroad from where those come from. Even physicians in our country prescribe those for treatments. Here, importers are bypassing the regulatory authority by treating drugs as food supplements. Drugs are always drugs, never change as its level change. Notwithstanding the cheating of the importers and sellers, some consumers bye those so called food supplements with no recommendation and consume those as regular products. As bypassed from the regulatory authority, these drugs are never tested fulfilling the required drug testing procedures. This may cause serious trouble to the public health. Examples of such food supplements are bone calcification tablets, mineral enriched drinks, memory stimulating products etc. Importers are exploiting regulatory gap and continuously bringing foreign drugs leveling those as other means. The reason for this on going practice is there is no cross functioning regulatory authority in Bangladesh. Here, Bangladesh Medical Association (BMA), Bangladesh Standards & Testing Institute (BSTI) and Directorate of Drug Administration (DDA) do not co-operate with each other to make sure there is no gap of regulation. In explaining the gap of regulation, most physicians prescribe representative induced medicine to the patients; BSTI check if any product is edible only and DDA do not specify their scope of activities to other organizations


E2: Selling open trade commodities (OTC) without having approved list. People always buy open trade commodities for day to day activities. In purchasing medicine, people buy painkillers, aspirins, saltines, anti-acidity suspensions or tablets, many sorts of vitamins etc of different intensity very frequently. Some drug highly requires physicians’ prescriptions to buy or sell but are being traded as open trade commodities. Some profit seeking sellers are selling both prescribed and non-prescribed drugs to the people. Not all drugs openly traded are not regular drugs. Without any doctor’s advice, consuming non regular drugs can be harmful to patient. Considering the average knowledge level about awareness’ of patients or persons acting on behalf, it is the sellers’ responsibility not to sell non-regular medicine of any form without doctors’ prescriptions. [Ref. 6] Sellers are not willing to sell certain non regular drugs which explicitly dangerous if consumed without doctors advice. But if we categorize whole drugs available in the market into two groups. There are OTC drugs and non-regular drugs. There is no approved list of either OTC drugs or non-regular drugs. As there is no specification of OTC drugs, most drugs can be bought and sold without restriction. Drugs can be used to cure diseases but can also make adverse effect without recommended consumption. [Ref. 11] E3: Exploitation of deficiency of drug testing procedure by the manufacturers. There are two physical parts of a drug. One is the major component and another is supportive component. In Bangladesh, manufacturing companies and drug regulatory authority test fitness of only major components of drugs. The drugs which are not produced in the country, drug regulatory authority test those drugs. Untested components of drug can be harmful to public health. As there is no law or guideline regarding testing procedure of drug. Most manufacturers except those are exporting drugs to abroad, do not test supportive component. Manufacturer will not proactively do it for the sake of cost reduction though every part of drug is consumed and sensitive to people’s health. [Ref. 6]


8. Recommendation
According to the findings of the study, the following steps can be taken to solve mentioned problems. 1) The DDA should be expanded and upgraded as soon as possible. Adequate regulatory authority and administrative autonomy should be awarded. 2) The Central Drug Testing Laboratory should be strengthened. Divisional Drug Testing Laboratories may be set up in phases. 3) The laboratories should be equipped with modern facilities and a sufficient number of the Pharmacists and other technical personnel should be appointed to run the laboratory effectively. 4) The Central Pharmaceutical Reference Laboratory may be set up with the collaboration of DRA and the Pharmacy Council of Bangladesh. 5) The government may take initiative to appoint adequate number of consultants to support the medium sized pharmaceutical manufacturers in improving upon their GMP compliance levels. [Ref. 4] 6) Health professionals and drug manufacturers should be more committed in order to achieve the goals of the National Drug Policy (NDP). [Ref. 12] 7) Customs authority should be more conscious about drag trafficking 8) Empowerment of drug inspectors should be done by the government. 9) Compliance of GMP should be enforced by law. [Ref. 10] 10) Food supplements should be regulated as like as drugs 11) There should be a specific list of open trade drugs 12) Shopkeepers’ and end users knowledge about rational drugs should broaden via special training.


13) Along with DDA, other parallel regulatory authority should co-operate each other.

9. Conclusion
Likewise any other industries in Bangladesh and the rest of the world, drug industry of Bangladesh have more or lesser extent of legal or ethical problems. Identifications and mitigations of any problems in this industry should be encouraged and rewarded. After all, at end of the day we do not want to see two things. One, a person engaged in a drug industry buying drugs other than the engaged one. Two, a solvent civilian avoiding drugs produced in his or her own country.


10. References
1. The Drugs Acts and Rules (1940-’84), pp. 4 2. Directorate of Drug Administration July 5, 2009. 3. Rahman, R., (2007), “The State, the Private Health Care Sector and Regulation in Bangladesh”, Asia Pacific Journal of Public Administration, Vol. 29, No. 2, pp. 191-206. 4. Zahedee, M.N.S., (2009), “Good Manufacturing Practices in Bangladesh”, The Financial Express. 5. Wikipedia, (2009a), “Good Manufacturing Practice”, Wikimedia Foundation Inc. 6. Alam. S.S., (2009), Assistant Director, Directorate of Drug Administration, Interviewed. 7. Wikipedia, (2009b), “Dietary Supplement”, Wikimedia Foundation Inc. 8. The Drugs Acts and Rules (1940-’84), Section. 18, pp. 14. 9. The Drugs Acts and Rules (1940-’84), Section. 22, pp. 16-18. 10. Karim, F., (2005), “National Drug Policy”, Ministry of Health and Family Planning, Section. 4(i), pp. 6. 11. Karim, F., (2005), “National Drug Policy”, Ministry of Health and Family Planning, Section. 6(iii), pp. 7. 12. Islam, M.S., (2008), “Therapeutic Drug Use in Bangladesh: Policy vs Practice”, Indian Journal of Medical Ethics, Vol. 5, No. 1, pp. 24-25


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