Generic drugs are not created equal, and a new study reveals why

Generic drugs are often promoted as identical to their brand-name equivalents – cheaper, yet equally safe and effective. However, a recent study challenges this widely held belief.

Study co-author John Gray is a professor in The Ohio State University’s Fisher College of Business. He pointed out that disparities in manufacturing standards exist worldwide.

“Drug manufacturing regulation, and therefore quality assurance practices, differ between emerging economies like India and advanced economies like the United States. Where generic drugs are manufactured can make a significant difference,” said Professor Gray.

Generic drugs from the U.S. and India

The researchers uncovered a concerning link. They discovered that users of generic drugs manufactured in India reported substantially more “severe adverse events” than users of equivalents made in the United States.

These adverse events included instances of hospitalization, disability and, in a few tragic cases, even death.

George Ball is an associate professor of operations and decision technologies at Indiana University’s Kelley School of Business.

“The FDA assures the public that all generics patterned after the same original drug should be equivalently safe and effective, however, this is not necessarily the case when it comes to generic drugs made in India,” said Professor Ball.

Tracing generic drugs to their factories

This study stands out not only for its findings but also for its exceptional methodology. Although the FDA was hesitant to disclose information about the manufacturing locations of the drugs, the researchers found a workaround.

By leveraging the Structured Product Labeling dataset, they successfully traced the drugs back to their factories of origin.

“Overcoming this lack of transparency of drug manufacturing location is one of the major accomplishments of our study,” said Professor Gray.

To ensure a fair comparison, the researchers matched those medicines made in India with identical drugs produced in the United States.

These drugs were perfectly alike in every measure – active ingredients, dosage form, and administration route. Therefore, it would be an accurate interpretation to say, they were comparing “apples to apples.”

The study considered 2,443 drugs from the United States and emerging economies. Significantly, 93% of these generic drugs were Indian-made.

Adverse events and comparative analysis

The researchers used the FDA Adverse Event Reporting System (FAERS) to identify events reported for people using generic drugs from India and those using their matched counterparts that were manufactured in the United States.

Only those reports listing the most severe outcomes like hospitalization, disability, and death were considered.

The number of severe adverse events associated with the use of generic drugs manufactured in India was 54% higher than the number for equivalent generic drugs that were manufactured in the United States.

The results were largely driven by drugs that have been on the market for longer. Older drugs were often found to have poorer quality.

“In the pharmaceutical industry, the older drugs get cheaper and cheaper and the competition gets more intense to hold down costs. That may result in operations and supply chain issues that can compromise drug quality,” explained Professor Gray.

Loopholes in the inspection process

Despite these findings, the researchers caution against interpreting the results as a blanket indictment of offshore drug production.

“There are good manufacturers in India, there are bad manufacturers in the U.S., and we’re not advocating for ending offshore production of drugs or bashing India in any way. We believe this is a regulatory oversight issue that can be improved,” explained Professor Gray.

One of the major regulatory loopholes lies in the inspection process of these plants. While inspections of U.S.-based plants are unannounced, those in overseas locations such as India are prearranged.

This potential loophole may allow manufacturers to conceal problems, making it harder for the FDA to detect these issues.

Professor Gray suggested that making all inspections unannounced, worldwide, could significantly improve the situation. He also called for product labeling to give information about the country of manufacture.

“A key recommendation we make in this study is for the FDA to make drug manufacturing location, such as the country of manufacture, and drug quality, transparent for consumers. This can help create a market in which drug quality is incentivized more than it is today,” concluded Professor Ball.

The full study was published in the journal Production and Operations Management.

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