NCPA - National Center for Policy Analysis

Understanding the Dilemma of Substandard Drugs

June 13, 2014

With a large percentage of the ingredients for pharmaceuticals coming from overseas, the U.S. Food and Drug Administration faces the task of determining how to ensure drug quality throughout the global supply chain, according to a new study from  Roger Bate, Aparna Mathur and Ginger Zhe Jin of the American Enterprise Institute.

Eighty percent of drug ingredients and 40 percent of final drug products come from overseas, and concerns have emerged about quality and fraud. Bate, Mathur and Jin tested the active ingredients in domestic and foreign drugs:

  • The authors analyzed 1,437 samples of the antibiotic Ciprofloxacin from 18 low- and middle-income countries.
  • Drug samples with zero correct active ingredients were labeled "falsified," while those with less than 80 percent of correct ingredients were listed as "substandard." All other drugs were rated as "passing."
  • The study found that almost 10 percent of the drug samples failed quality tests. Of those failures, 41.5 percent of the drugs were falsified.

Not only do falsified drugs provide no treatment, but they can harm patients. Substandard drugs may be partly beneficial, but not in all cases. Substandard antibiotics, for example, can lead to bacterial resistance, ultimately making the bacterial strain resistant to the correct, high-quality antibiotic. 

Where do these drugs come from? Substandard drugs are often the product of poor production practices, say the authors -- practices which could be curbed with better oversight and enforcement. Falsified drugs, on the other hand, are generally the product of criminal enterprise.

Notably, the authors found that falsified drugs more often mimicked the real product and carried the same prices as the real drug. Substandard drugs, on the other hand, tended to be 10 percent cheaper than generic versions of the drug.

How should policymakers respond to this problem? The authors note the tradeoff between drug quality and cost, as many of the world's poor may only be able to afford the cheaper, substandard drugs. However, as poor quality drugs do not help -- and can even hurt -- patients, regulators must ensure some minimum quality standards.

Source: Roger Bate, Aparna Mathur and Ginger Zhe Jin, "What to do About the Deadly Threat of Substandard Drugs," Forbes, June 3, 2014.


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