Worth The Price? Push For Generic Drugs Has Canadians Buying Questionable Medicines From India
NationalPost.com
Mar. 13, 2015
Mar. 13, 2015
Coded Expectation
GE2.02- evaluate the advantages and disadvantages of Canada’s international business relationships and activities
Summary
Recent investigations into Indian drug makers have found questionable practices. Close to 20 million of Canada’s generic prescriptions come from India every year, and yet the drugs may not be safe or effective. Inspectors found that bathrooms in many of the facilities lacked hot water and soap. Many buildings had bacteria and mould, and the water used in the manufacturing of the drugs was not clean. The push to lower the cost of Canadian healthcare by buying generic drugs has the unintended affect of lowering the quality.
Many Indian facilities have been found guilty of fraud - their drugs do not work. One of those companies, Ranbaxy Laboratories, was fined $500 million US in 2013 for selling unadulterated drugs, fudging data and misleading regulators. The main issue regarding enforcement is the lack of inspectors, with just 400 people inspecting over 1300 plants spread out across the country. |
Ranbaxy Laboratories, one of the major Indian drug manufacturers, has been found guilty on a number of criminal charges relating to their manufacturing conditions (5).
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Connection
This issue, and this article, perfectly summarizes both the advantages and disadvantages of international business. The pharmaceutical drug trade that Canada has with India is a significant business, one where more than 20 million generic prescription pills are sent to Canada every year. As with any outsourcing though, there are both positives and negatives.
Canada gains a lot from its relationship with India. The advantages are enormous, both to the consumer and the government. The government is able to save millions of dollars on its tax-funded health care costs by purchasing generic drugs from a country that only needs to spend one tenth that Canada does on manual labour. This results in enormous savings that can then be passed on to the consumer through lower tax rates.
However, as with almost anything, there are some negatives. Recently, Canada and the US have sent inspectors to Indian pharmaceutical manufacturing plants and have come back with disappointing results. The disadvantage of this trading relationship is the quality of drugs Canada is buying. Inspectors found mould in many factories, and noted that water used in the production of the drugs was not safe. Additionally, some drugs were found to have no effect on humans, creating major concerns for drugs that treat life threatening diseases.
As with most trading relationships, there are advantages and disadvantages of doing trade with India, and Canada must now decide if the pros outweigh the cons.
Canada gains a lot from its relationship with India. The advantages are enormous, both to the consumer and the government. The government is able to save millions of dollars on its tax-funded health care costs by purchasing generic drugs from a country that only needs to spend one tenth that Canada does on manual labour. This results in enormous savings that can then be passed on to the consumer through lower tax rates.
However, as with almost anything, there are some negatives. Recently, Canada and the US have sent inspectors to Indian pharmaceutical manufacturing plants and have come back with disappointing results. The disadvantage of this trading relationship is the quality of drugs Canada is buying. Inspectors found mould in many factories, and noted that water used in the production of the drugs was not safe. Additionally, some drugs were found to have no effect on humans, creating major concerns for drugs that treat life threatening diseases.
As with most trading relationships, there are advantages and disadvantages of doing trade with India, and Canada must now decide if the pros outweigh the cons.