Seven firms that failed drug quality tests gave money to political parties through electoral bonds

Thirty-five pharmaceutical companies in India have contributed nearly Rs 1,000 crore to political parties through electoral bonds, data released by the Election Commission on March 14 has revealed.

Of these, at least seven companies were being investigated for poor quality drugs when they purchased the bonds.

Pharmaceutical manufacturers are regulated by the Drugs and Cosmetics Act, 1940, which empowers state-controlled Food and Drug Administrations to inspect manufacturing units as well as test the quality of medicines being sold in the market.

Any state Food and Drug Administration can send notices to a company if its drugs fail the quality test. But punitive action – such as the suspension of manufacturing or cancellation of a manufacturing licence – can only be taken by the state where the company’s factory is located.

“We often see a lax approach by drug regulators, both at state and central level,” said Amar Jesani, editor of the Indian Journal of Medical Ethics. He said it would not be surprising “if pharma companies finance political parties to strike some compromise in regulatory cases at the state level”.

Other experts noted that drug regulation is just one area where the pharmaceutical industry seeks concessions from governments. Firms could also be looking for cheap land, tax exemptions, favourable policies or for price caps to be removed.

More clarity on what prompted the firms to make donations to the parties is likely to emerge once the unique codes of the bonds that match the donors and the recipients become public.

Regardless, experts say it is significant that drug companies are a major contributor of political finance. “They have invested hundreds of crores in political parties,” said S Srinivasan, an activist who is part of the All India Drug Action Network. “Nobody believes that they did it for the love of democracy, elections or charity.”

Here is a list of the seven companies that received notices from the state Food and Drug Administrations the years they purchased bonds.

Hetero Labs and Hetero Healthcare bought electoral bonds for Rs 40 crore in April 2022. In the preceding 10 months, the Maharashtra Food and Drug Administration issued six notices issued to the Hyderabad-based company for substandard drugs.

At least three of them pertained to remdesivir, an antiviral drug widely used to treat Covid-19, that helped Hetero expand its business during the pandemic.

A lab test conducted by the Maharashtra Food and Drug Administration found that a remdesivir sample had yellow-coloured liquid instead of clear liquid. A notice regarding this was issued to Hetero in July 2021. A second sample had less than required quantity of the drug and a notice was issued in October that year. A third sample of remdesivir was found “not of standard quality”, with a notice issued in December 2021.

Such a violation could lead to the suspension of a company’s manufacturing licence, said Omprakash Sadhwani, former joint commissioner of drugs in Maharashtra.

But the Telangana regulator did not act against Hetero. The company recalled the batch of medicines found substandard by Maharashtra.

Two other products of Hetero were also found substandard in 2021: an antifungal medicine, Itbor capsule, and Monocef, used for bacterial infection.

In addition to the Rs 40 crore bonds Herero bought in 2022, it also purchased bonds worth Rs 10 crore in July 2023 and Rs 10 crore in October 2023 – a total of bonds worth Rs 60 crore.

Torrent Pharma bought electoral bonds worth Rs 77.5 crore between May 2019 till January 2024.

The Gujarat-based company’s antiplatelet medicine Deplatt-150 had failed the salicylic acid test and was declared substandard by the Maharashtra Food and Drug Administration in 2018.

In October 2019, the United States Food and Drug Administration issued a warning to the firm for repeated quality-related failures at its manufacturing unit. Such a notice attracts inspection by Indian authorities and could lead to the suspension of a company’s manufacturing licence. However, the Gujarat government did not take any action against the pharmaceutical company.

In September 2019, Torrent Pharma’s drug Losar H, used to lower blood pressure, was found to be substandard by the Gujarat Food and Drug Administration. In December 2021, its medicine Nicoran LV, used to treat heart diseases, failed to meet standards when tested by the Maharashtra Food and Drug Administration.

In February 2023, its Lopamide medicine, used to treat diarrhoea, failed the dissolution test and was found substandard.

The pharmaceutical company purchased electoral bonds worth Rs 12.5 crore in May and October 2019, Rs 7.50 crore in April 2021, Rs 25 crore in January and October 2022 , Rs 7 crore in October 2023 and Rs 25.5 crore in January 2024.

​​Zydus Healthcare purchased electoral bonds worth Rs 29 crore between 2022 and 2023.

In 2021, the Bihar drug regulator had declared a batch of remdesivir medicines manufactured by the Gujarat-based company as “not of standard quality” after traces of bacterial endotoxin were found in them. Several patients were reported to have suffered adverse drug reactions from the medicines.

But the Gujarat drug regulator did not collect samples of these batches for further testing and nor did it initiate any action against the manufacturing unit of Zydus.

Glenmark received five notices for its substandard drugs between 2022 and 2023. Four of these were issued by the Maharashtra Food and Drugs Administration, which flagged its blood pressure regulating medicine Telma as substandard, mostly failing a dissolution test. The pharmaceutical company purchased Rs 9.75 crore of electoral bonds in November 2022.

Cipla received four show-cause notices for its drugs between 2018 and 2022. Since 2019, it has purchased bonds worth Rs 39.2 crore.

In August 2018, its RC cough syrup failed to meet standards during an inspection. It purchased bonds worth Rs 14 crore the next year.

In July 2021, it received notices twice for its remdesivir medicine, Cipremi. Like Hetero, Cipremi was found to have less than the required quantity of remdesivir in it. Cipla bought bonds worth Rs 25.2 crore in November 2022.

IPCA Laboratories Limited bought bonds worth Rs 13.5 crore between November 2022 and October 2023. In October 2018, its anti-parasitic medicine, Lariago, had lower than required chloroquine phosphate levels and was found substandard. The medicine, flagged by the Mumbai Food and Drugs Administration, was manufactured in a Dehradun plant of IPCA.

Intas Pharmaceutical bought 20 crore worth of bonds in October 2022. In 2020, the company’s Enapril-5 tablet had failed the dissolution test by the Maharashtra FDA.

In recent years, the country’s pharmaceutical sector has been in the global spotlight for deaths and infections linked to Indian-made cough syrups and eye ointments in several countries.

The governments of these countries have suspended purchases, and international bodies organisations like the World Health Organization have issued alerts but the response of Indian authorities has been lax.

But the implications of the pharmaceutical industry funding political parties go far beyond drug regulatory action.

Malini Aisola from the All India Drug Action Network said political financing enables pharmaceutical companies to secure “privileged access, power and influence in government policy making”.

Prashant Reddy, who has extensively researched drug regulatory laws in India, said political funding by the pharmaceutical sector might be aimed at influencing the larger legal framework in its favour. He pointed out that recent legislations introduced by the Central government reduce punitive action against the makers of substandard drugs.

Corrections and clarifications: An earlier version of this report incorrectly used the term “spurious” for “not of standard quality”. The story has been edited to reflect that.

With inputs from Anjana Meenakshi, Maria Teresa Raju and Nandini Chandrashekar.

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.