Electoral bonds: 7 pharma groups accused of dicey drugs donated 1,000 crore

Pharmaceutical companies have bought electoral bonds worth around Rs 1,000 crore, with the lion’s share of these contributions going into the BJP’s kitty. Seven of these companies were being investigated for poor quality drugs when they purchased these electoral bonds.

These include Hetero Labs and Hetero Healthcare, which bought Rs 60 crore worth of bonds between 2022 and 2023.

Gujarat-based Torrent Pharma bought bonds worth Rs 77.5 crore between 2019 and January 2024.

Zydus Healthcare, another Gujarat company, purchased bonds worth Rs 29 crore between 2022 and 2023 and Glenmark Rs 9.75 crore in 2022.

Cipla bought bonds worth Rs 25.2 crore in November 2022 and IPCA Laboratories Rs 13.5 crore in 2022–23.

All these companies are reportedly facing investigations for manufacturing substandard drugs.

Hetero Labs, for example, received three notices relating to remdesivir, a drug used for the treatment of Covid-19.

Torrent Pharma received a notice for its anti-platelet drug, which was found to be substandard by the Maharashtra Food and Drug Administration.

Zydus Healthcare, a company that otherwise enjoys a good reputation, was found to have faulted in the manufacture of the remdesivir drug.

A similar complaint was lodged against Cipla for a remdesivir drug it manufactures, as well as for a cough syrup.

Activist entrepreneur S. Srinivasan, who has had 329 irrational combinations of drugs banned, believes this amounts to: “legalisation of crime. This is like a quid pro quo for sub-standard medicine. [However,] I cannot point a finger at anybody and say they bribed the government. The money was given for elections; the company is supporting the democratic process and that is a completely legitimate activity.”

Dr Gopal Dabade, an ENT specialist and member of the All India Drug Action Network (AIDAN), a national advocacy group of NGOs that campaigns for affordable healthcare, believes drug manufacturers get away with this because the regulatory mechanism is very weak and subject to political interference.

“Drug regulation is very fragmented. If a Karnataka-based drug inspector finds a drug being sold in his state to be substandard, he can complain to the Drug Regulatory Authority, but the follow-up action will have to be taken by the state government where the drug was manufactured. With weak enforcement of the law, state officials find it easier to bribe a public prosecutor and the drug inspector in order to hush up the whole matter,” says Dr Dabade.

The whole process of taking action against the manufacturer is very laborious because the evidence has to be produced before a court of law. Drug inspectors are the foot soldiers responsible for executing the regulatory framework and this allows for a lot of corruption, he points out.

“We need to have uniform laws across all states to regulate the manufacture of drugs and these must protect the interest of consumers. Many of the pharma companies are being run by relatives of politicians and they are, therefore, enjoying high levels of immunity.”

Srinivasan, a co-convenor of AIDAN, points out sundry other violations that have become commonplace. “Drugs are not being properly tested and proper records are not being maintained. Another problem is that if a drug fails and the drug inspector is able to prove this, then the drug will need to be reconstituted and reformulated and that is a very costly exercise.”

He further explains: “India has no withdrawal policy once a drug has been placed in retail stores. Drug manufacturers point out that once a drug has left the company, they have no control over the medicine, how it is being stored and whether all storage facilities are as per the requirements of specific drugs. Once the retail sample is tested in a factory and then moved from there, the situation changes.”

Dr Mira Shiva, director of Initiative for Health and Equity in Society and founder member of the People’s Health Movement (PHM) believes the purchase of electoral bonds points to a deeper malaise. “The companies that were raided were all Indian companies. The government did not touch the bigger multinational companies who are also selling their drugs in the billion-dollar Indian market,” Shiva says.

Shiva maintains that most MNCs and many of the larger Indian drug companies are getting their drugs manufactured by smaller firms in places such as Baddi in Himachal Pradesh or Kotdwar in Uttarakhand under the ‘loan licence’ process. (Loan licence is a mechanism under which the drug regulatory authority allows a company to outsource the manufacturing of drugs and cosmetics to a facility owned by another licensed manufacturer.)

“The MNCs have [also] been putting pressure on the government to ban the manufacture of generic drugs because this will increase their profits. Even if big pharma [companies] have not bought electoral bonds, there is no doubt that they too must be contributing to the election process in other ways,” says Shiva.

There are wheels within wheels. P. Sarath Chandra Reddy is one of the directors of Aurobindo Pharma, which had bought electoral bonds worth Rs 3 crore in January 2022 and Rs 1.5 crore in July 2022.

On 15 November 2022, four days after his arrest in connection with the alleged cartelisation of licences—moving kickbacks in Delhi’s liquor licensing process—he bought bonds for Rs 5 crore, which he donated to the BJP.

In June 2023, Reddy turned approver in the case.

In November 2023, he gave Rs 25 crore to the BJP.

In total, Aurobindo Pharma gave Rs 34.5 crore to the BJP, Rs 2.5 crore to the Telugu Desam Party in June 2023 and another Rs 15 crore to Bharat Rashtra Samithi in April 2022.

Could it be the price of immunity from prosecution?