News Feature | July 22, 2014

India Offers Handsome "Whistleblower" Rewards To Thwart Counterfeiting

By Lori Clapper

India’s government is offering significant cash rewards to whistleblowers, in hopes of pulling the plug on counterfeit pharmaceutical operations. The country's Central Drugs Standards Control Organization (CDSCO) says informants who turn in criminals who market fake drugs, devices, and cosmetics, can get paid up to 20 percent of the total value of the intercepted shipments that are "spurious, adulterated and/or misbranded,” reported.

The reward will be paid in stages - with 25 percent when charges are filed, 25 percent during the course of the trial, and the remaining 50 percent when the case has been completed. The total payment will have a ceiling set at 2.5 million rupees, or around $40,000, and will only be paid out once here has been confirmation of the seizure of counterfeit drugs, cosmetics and medical devices by the CDSCO. 

Making efforts to get their cred back

Because fake drugs are a serious issue that impacts the health of people, as well as the credibility of India’s pharmaceutical trade interests, the country is acting with a sense of urgency in taking down the counterfeit drug market.

The whistleblower reward initiative, along with other measures like serialized codes are being put in place to boost confidence in India's pharmaceutical exports. In the past year, the country and the U.S. FDA have been at odds over rampant quality issues and banned imports. Indeed, 25 Indian manufacturing plants have been blocked from sending drugs or ingredients into the U.S., according to the Wall Street Journal.

In addition, the CDSCO says it is also responding to repeated claims that counterfeiters in other countries - including China - are supplying fake meds bearing a 'Made in India' label on them.

“The country’s hold on [the] international pharmaceutical market, especially the status enjoyed by it in providing high-quality drugs [for the] cheapest prices invited some unhealthy competition from various quarters,” India’s health ministry noted in a nine-page memo.

In order to respond to these concerns and improve the reputation of the industry, the Indian government announced in May that it has chalked a $510 million plan to increase pharmaceutical regulatory capacity at a state and federal level over the next three years.

The FDA is also escalating its oversight in India to not only bust violators, but more importantly to strengthen industry practices in the country. Currently, the agency is in the process of adding seven new inspectors to monitor nearly 600 plants. However, the FDA has found it hard to keep staff in India, due to extreme cultural differences, Bloomberg News says.