Working Paper: NBER ID: w20469
Authors: Roger Bate; Ginger Zhe Jin; Aparna Mathur; Amir Attaran
Abstract: Experts claim that some Indian drug manufacturers cut corners and make substandard drugs for markets with non-existent, under-developed or emerging regulatory oversight, notably Africa. This paper assesses the quality of 1470 antibiotic and tuberculosis drug samples that claim to be made in India and were sold in Africa, India, and five mid-income non-African countries. We find that 10.9% of those products fail a basic assessment of active pharmaceutical ingredients (API), and the majority of the failures are substandard (7%) as they contain some correct API but the amount of API is under-dosed. The distribution of these substandard products is not random: they are more likely to be found as unregistered products in Africa than in India or non-African countries. Since this finding is robust for manufacturer-drug fixed effects, one likely explanation is that Indian pharmaceutical firms and/or their export intermediaries do indeed differentiate drug quality according to the destination of consumption.
Keywords: poor quality drugs; global trade; pharmaceuticals; Indian manufacturers; substandard drugs
JEL Codes: D8; F14; F61; I1; L15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| lower regulatory oversight in African countries (O55) | prevalence of substandard drugs (L65) |
| Indian pharmaceutical firms differentiate drug quality based on market regulation (L15) | quality of drugs exported from India (L65) |
| Indian-made drugs purchased in Africa (L65) | poorer quality compared to those purchased domestically in India or in non-African countries (F14) |
| non-registered products from Africa (O55) | exhibit the worst quality (Y60) |
| manufacturing practices (L60) | observed patterns in drug quality (L15) |