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Pharma Companies Under Scrutiny for Electoral Bond Donations Amid Drug Quality Investigations

Pharmaceutical companies' electoral bond donations under scrutiny amidst drug quality investigations.

The nexus between politics and big business often raises eyebrows, and the pharmaceutical industry in India is no exception. Recent revelations from data released by the Election Commission on March 14 have shed light on the significant contributions made by pharmaceutical companies to political parties through electoral bonds. What’s particularly concerning is that at least seven of these companies were under investigation for poor quality drugs at the time of their donations.

Regulatory Framework and Compromises

The pharmaceutical sector in India operates under the ambit of the Drugs and Cosmetics Act, 1940. This legislation empowers state-controlled Food and Drug Administrations to conduct inspections of manufacturing units and ensure the quality of medicines in the market. However, while regulators can issue notices for failing quality tests, punitive actions such as license suspensions or cancellations can only be taken by state or central authorities.

Amar Jesani, the editor of the Indian Journal of Medical Ethics, highlights a concerning trend of lax regulatory oversight, both at the state and central levels. He suggests that the financial support extended by pharmaceutical companies to political parties might be aimed at securing compromises in regulatory matters, especially at the state level.

Financial Influence Amid Quality Concerns

The data released by the Election Commission underscores the substantial financial involvement of pharmaceutical companies in political financing. S Srinivasan, an activist associated with the All India Drug Action Network, emphasizes that such significant investments in political parties are unlikely driven by altruistic motives but rather hint at vested interests.

Examining Specific Cases

Delving into specific instances, several pharmaceutical companies come under scrutiny for electoral bond donations amidst ongoing investigations into drug quality:

Hetero Labs and Hetero Healthcare

Hetero Labs, based in Hyderabad, purchased electoral bonds amounting to Rs 39 crore in April 2022. This transaction occurred despite receiving six notices from the Maharashtra Food and Drug Administration for substandard drugs in the preceding months. Notably, issues were flagged concerning the quality of Remdesivir, a crucial antiviral drug used extensively during the pandemic.

Torrent Pharma

Torrent Pharma, based in Gujarat, bought electoral bonds totaling Rs 77.5 crore between May 2019 and January 2024. Despite quality-related warnings from regulatory authorities, including the United States Food and Drug Administration, no significant actions were taken against the company.

Zydus Healthcare

Zydus Healthcare, another Gujarat-based company, purchased electoral bonds worth Rs 29 crore between 2022 and 2023. Concerns arose in 2021 when batches of Remdesivir medicines were declared spurious by the Bihar drug regulator due to bacterial contamination.

Glenmark and Cipla

Glenmark and Cipla faced similar scrutiny, with notices issued for substandard drugs between 2018 and 2023. Despite these issues, both companies continued to make significant contributions to political parties through electoral bonds.

Broader Implications

The ramifications of pharmaceutical companies funding political parties extend beyond immediate regulatory concerns. Malini Aisola from the All India Drug Action Network emphasizes that such financial backing enables these companies to wield influence over government policies, potentially shaping legislation in their favor.

Prashant Reddy, a researcher specializing in drug regulatory laws, suggests that political financing by the pharmaceutical sector may be geared towards influencing the legal framework to their advantage. Recent legislative changes introduced by the central government, which reduce punitive measures against makers of substandard drugs, raise questions about the influence of such financial contributions.

Wrapping up, the intersection of pharmaceutical companies and political financing raises significant ethical and regulatory concerns. As investigations continue into both drug quality issues and electoral bond donations, transparency and accountability are paramount to uphold public trust and safeguard public health interests.

This report is part of a collaborative project involving three news organisations – Newslaundry, Scroll, The News Minute – and independent journalists.

Project Electoral Bond includes Aban Usmani, Anand Mangnale, Anisha Sheth, Anjana Meenakshi, Ayush Tiwari, Azeefa Fathima, Basant Kumar, Dhanya Rajendran, Jayashree Arunachalam, Joyal, M Rajshekhar, Maria Teresa Raju, Nandini Chandrashekar, Neel Madhav, Nikita Saxena, Parth MN, Pooja Prasanna, Prajwal Bhat, Prateek Goyal, Pratyush Deep, Ragamalika Karthikeyan, Raman Kirpal, Ravi Nair, Sachi Hegde, Shabbir Ahmed, Shivnarayan Rajpurohit, Siddharth Mishra, Supriya Sharma, Tabassum Barnagarwala and Vaishnavi Rathore.

Gangtokian Web Team, 19/03/2024

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