Report On:

Legal and Ethical Issues in Drug Industry: Directorate of Drug

Administration Point of View

Legal & Ethical Issues in Business

MBA- 515, Section- 1

Submitted By

Syed Zubayer Alam 0420007

Submitted To:
Dr. Tanvir A. Khan

School of Business
Independent University, Bangladesh

6th July, 2009

 Table of Contents

Executive Summary 1

1 Introduction 2

2 Purpose of the Study 2

3 Literature Review 2

3.1 Drug 2

3.2 Drug Regulation in Bangladesh 3

3.3 Power of Drug Inspectors 3

3.4 Drug Manufacturers in Bangladesh 4

3.5 Good Manufacturing Practices (GMP) 4

3.6 Drug Testing Procedure of Bangladesh 5

3.7 Food Supplement 5

3.8 Open Trade Commodities (OTC) in Drug Industry 5

4 Problem Statement 6

5 Methodology 6

6 Hypothesis 6

6.1 Legal Issues 6

6.2 Ethical Issues 6

7 Findings 6

8 Recommendation 10

9 Conclusion 11

10 References 12
Executive Summary

This paper serves the purpose of people who are interested in legal and ethical issues
concerning drug industry of Bangladesh. Here, three of each legal and ethical issue about the
operation of vendors in Bangladeshi drug industry is explored and some recommendation
provided to sooth the discussed problems. Considering the limitation, the author welcomes
knowledgeable review and criticism about the paper.

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1. Introduction

Drugs are the essential product for the human being as it has the capacity to maintain or
recover anticipated health condition. World average drug consumption per people is rising
due to changing global environment that cause decreasing immune system of human bodies.
The case of Bangladesh is not exempt from the fact. If we take a look at the market condition
of this country’s drug industry, it will apparently look like a pure market competition as
evidentially proven when physicians prescribe various brands of same drug and same drug of
various brand found in shops in a plenty of amount. But when it comes to appraise the
industry in terms of regulation, the regulatory authority is not satisfied with the activities of
vendors, who are playing role as manufacturers, importers and shopkeepers. This rumor
becomes significant when patients loyalty and avoidance towards specific brands of drugs,
drug inspectors are being assaulted in production facilities and drug markets, doctors’ are
recommending ‘food supplement’ to patients. These incidents do not clarify the format of
market competition rather it deems to show disqualifiers existence and their unlawful
resistance to leave the market. The nation has the right to demand deep investigation,
clarification and solution if something found troublesome because the capacity of drugs can
be backfired if supplied from the wrong hand.

2. Purpose of the Study

Purpose of the study is to explore, gather knowledge about certain legal and ethical issues and
to provide solutions concerning the activities of pharmaceutical manufacturers, importers and
sellers in the drug industry.

3. Literature Review

3.1 Drug

Drug contains four groups of substances. First, any substance used or intended to be used
internally or externally for treatment, mitigation or prevention of diseases in humans or
animals. Secondly, any tool or substance used in clinical operations or first aids is drug.
Thirdly, other than food, any substance used to affect structure and functions of human body.
Fourthly, anything used to destroy vermin or insect which cause disease in humans or
animals. [Ref. 1]

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3.2 Drug Regulation in Bangladesh

The Directorate of Drug Administration (DDA) is the Drug Regulatory Authority (DRA) for
Bangladesh. It is under the Ministry of Health & Family Welfare, Government of the People's
Republic of Bangladesh. This Directorate supervises and implements all prevailing Drug
Regulations in the country and regulates all activities related to import, procurement of raw
and packing materials, production and import of finished drugs, export, sale, pricing, etc. of
all kinds of medicine including those of Ayurvedic, Unani and Homoeopathic systems. DDA
is also empowered by the Govt. to act as the Licensing Authority (LA) of drugs. There are 33
district offices of the Directorate in the country. All officers of the Directorate function as
"Drug Inspector" pursuant to the Drug Laws and assist the Licensing Authority for properly
discharging his responsibilities. The mission of the Directorate of Drug Administration
(DDA) is to ensure that the common people have easy access to useful, effective, safe and
good quality essential and other drugs at affordable price. [Ref. 2]

3.3 Power of Drug Inspectors

The powers of a drug inspector are as follows:

• Access and inspect any place with or without license deem to be used as private
health care facility.
• Examine any tools such as apparatus, appliance and equipment used or found in the
facility.
• Take any blood sample or product, human tissue or fluid for examination.
• Acquire any object found in the premises which they believe necessary to inspect.
• Take any copy of document of testing, procedure or task done on the premises of a
facility which is licensed under DDA.
• Ask any owner to show cause, if related premise or facility found not complied with
law. They can also directly suggest the owner to close inappropriate facility.
• Ask any specific information to any owner either in written or verbal form. Any
licensee under DDA is bound to co-operate with the inspectors. [Ref. 3]

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3.4 Drug Manufacturers in Bangladesh

There are 263 pharmaceutical manufacturers in Bangladesh producing more than 22,000
products comprising of about 1,200 active pharmaceutical ingredients (API). Bangladeshi
pharmaceutical manufacturers have spread their wings to more than 60 countries including
UK and the other EU countries. The macro picture looks very promising as most of the top 20
manufacturers are in the queue of achieving similar international recognitions within next
couple of years. If we take a look to the market shares, the top 50 pharmaceutical
manufacturers enjoy more then 95 per cent of market share. The rest 213 manufactures
supply to less then 5.0 per cent of the market. Out of these 213 manufacturers, at least half of
them have already turned into sick industries today and they are not in a position to invest for
improvement. [Ref. 4]

3.5 Good Manufacturing Practices (GMP)

Good Manufacturing Practice or GMP (also referred to as 'cGMP' or 'current Good

Manufacturing Practice') is a term that is recognized worldwide for the control and
management of manufacturing and quality control testing of foods, pharmaceutical products,
and medical devices [Ref. 5]. It is promoted by the WHO GMP Guidelines, implemented by
the pharmaceutical manufacturers and monitored by the regulations promulgated by the Drug
Regulatory Authorities (DRA). The regulations relating to the GMP are backed by the law of
the land and require that manufacturers, processors and packagers of medicines and other
medical products and devices take proactive measures to ensure that their products are safe,
efficacious and meets required quality standard. Failure of manufacturers to meet the GMP
requirements may result in serious consequences including recall, seizure, suspension or
cancellation of the licenses, and other punitive measures. GMP is also sometimes referred to
as the cGMP where the "c" stands for "current" demanding the manufacturers to update their
technologies and systems in order to comply with the recent scientific and regulatory
developments. The cGMP reminds the manufacturers and the DRAs to make periodic updates
of their systems and regulations. In 1940 Winthrop Chemical Company of USA had
accidentally contaminated Sulphathiazole with Phenobarbitone causing death of hundreds of
human beings. The incident prompted the US Federal Drug Administration (FDA) to
implement a detailed control in production throughout pharmaceutical industries resulting in
the introduction of the 'Production Control Standards' for the pharmaceuticals. In 1963 the
US FDA took another step ahead and made a more elaborate document on the manufacturing

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of pharmaceuticals and termed it as the "Current Good Manufacturing Practices (cGMP)". In
1968, the WHO initiated a process to formulate a GMP document as a standard guideline to
be followed by all member states. The document was published in 1975 as the famous WHO
Guidelines on the GMP. [Ref. 4]

3.6 Drug Testing Procedure of Bangladesh

A drug testing laboratory has one of the complementary functionality of drug regulatory
authority. The DDA of Bangladesh has got only one drug testing laboratory in Chittagong.
Each and every aspect of the laboratory in terms of operation is insufficient. As there is one
single laboratory, manufacturers are crowding in there. Only the main components of drugs
are tested there. Some companies have their own drug testing facility especially those who
intend to export test all material by their own or they are financially solvent [Ref. 6]. DDA’s
drug testing laboratory does not have enough facility to cross-check all reports. Sometimes
disputed testing report found while both DDA’s laboratory and a firm’s own laboratory
provides report of a same sample. In order to mitigate this kind of problem, there is no
‘central reference laboratory’ or ‘appellate laboratory’ in the country so far. [Ref. 4]

3.7 Food Supplement

A dietary supplement, also known as food supplement or nutritional supplement, is a

preparation intended to provide nutrients, such as vitamins, minerals, fatty acids or amino
acids, that are missing or are not consumed in sufficient quantity in a person's diet. Some
countries define dietary supplements as foods, while in others they are defined as drugs. [Ref.
7]

3.8 Open Trade Commodities (OTC) in Drug Industry

Open Trade Commodities are some sort of product which has no such boundaries to be
bought and sold in any amount. In trading OTC, buyers and sellers require no such
qualification. Not considering special cases, OTC product is not harmful if used according to
its purposes. Unlike Bangladesh, most countries have authorized lists of OTC products. [Ref.
6]

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4. Problem Statement

In Bangladesh the vendors (Manufacturers, Importers, and Sellers) of pharmaceutical

industry are not doing certain this legally and ethically (see Hyporhesis). Those are both
offence and capable of making harm to public health.

5. Methodology

In order to gather information, in dept interview technique has been applied mostly with
personnel of Directorate of Drug Administration (DDA). Moderate level of books
consultation and internet sources has been used.

6. Hypothesis

6.1 Legal Issues

L1: Importers are trafficking unauthorized\unregistered drugs into the country.

L2: Sellers not showing stock-in receipt to the concerning authority.

L3: Producers good manufacturing practice (GMP) does not followed by certain companies.

6.2 Ethical Issues

E1: Importing drugs but treating those as food supplement.

E2: Selling open trade commodities (OTC) without having approved list.

E3: Exploitation of deficiency of drug testing procedure by the manufacturers.

7. Findings

L1: Importers are trafficking unauthorized\unregistered drugs into the country.

Some importers use to bring medicines in the country which are not registered through unfair
means either by not declaring or by carrying luggage. These sorts of medicines can be of sub
standard quality that might be insufficient to use as medicine but are sold within the boundary
of the country at a cheaper price. As per market condition and affordability of most of the

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population, these trafficked medicines are easily sold at relatively lower prices than the prices
charged on the registered medicines. Consequently, sellers of the registered medicines are
suffering for this kind of action. Moreover people’s lives are at risk if they purchase those
drugs. [Ref. 6]

Drug trafficking is a violation of drug act which states unregistered drugs are to be treated as
misbranded drugs and also sellers are not suppose to sell, stock or exhibit such drugs via
contravention of fair import procedure. [Ref. 8]

L2: Sellers not showing stock-in\out receipt to the concerning authority.

Some sellers and few manufacturers are willingly does not want to show documents of
acquisition of materials to be sold or processed further to the drug inspectors, personnel of
drug administration. This kind of practice may cause serious damage to the public heath.
Suppose any batch or lot of manufactured or imported drugs are proven or declared to be
dangerous to implement are floating in the market required to be withdrawn as soon as
possible. If the vendors do not show the stock in or out documents to the regulatory authority,
then it becomes impossible to execute required action by the drug inspectors within a given
power. [Ref. 6]

This kind of action from the part of the vendor violets the drug act by putting obstacles on the
powers of inspectors one of which is demanding any relevant records and register for
inspection. On the other hand, vendors are to prepare all relevant business documents and
maintain register which are understandable by common bodies. [Ref. 9]

L3: Producers good manufacturing practice (GMP) does not followed by certain companies.

At least 56 companies turned sick in terms of financial abilities. They are not in a position to
invest for improvement. Concerning good manufacturing practices is far beyond to discuss
about these companies. Other companies who are more emphasized or just maintaining
standard GMP benchmark so that the products are manufactured not only edible with
reliability but also export quality. On the other hand, the sick players are only concerned with
the local market. They usually offer low prices to attract poor consumers, making little profit
or just carrying business to recover initial huge investments. This sort of outlook towards

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business can harm price sensitive customers. Managing existence of the crippled or
companies in a state of slow death is highly influenced by politicians. [Ref. 6]

GMP guidelines are produced by world health organization (WHO) technicians. WHO
suggest its member states’ or countries’ Drug Regulatory Authority (DRA) or Food & Drug
Authority (FDA) whichever applies to enforce standardization in quality of procurement. In
Bangladesh, pharmaceutical companies having solvencies and capabilities try to maintain
GMP as best as possible to their sides. But as there are only policies exist to maintain GMP
which only suggests guidelines for quality production procurement rather than setting any
crystal clear law, it is almost impossible to enforce surviving or loosing companies to give
importance to GMP. [Ref. 10]

E1: Importing drugs but treating those as food supplement.

Some importers bring products leveled as ‘food supplements’ from abroad are not actually
food in most cases. These are by definition drugs according to Drug Act. These so called
‘food supplements’ are considered drugs even in the abroad from where those come from.
Even physicians in our country prescribe those for treatments. Here, importers are bypassing
the regulatory authority by treating drugs as food supplements. Drugs are always drugs, never
change as its level change. Notwithstanding the cheating of the importers and sellers, some
consumers bye those so called food supplements with no recommendation and consume those
as regular products. As bypassed from the regulatory authority, these drugs are never tested
fulfilling the required drug testing procedures. This may cause serious trouble to the public
health. Examples of such food supplements are bone calcification tablets, mineral enriched
drinks, memory stimulating products etc.

Importers are exploiting regulatory gap and continuously bringing foreign drugs leveling
those as other means. The reason for this on going practice is there is no cross functioning
regulatory authority in Bangladesh. Here, Bangladesh Medical Association (BMA),
Bangladesh Standards & Testing Institute (BSTI) and Directorate of Drug Administration
(DDA) do not co-operate with each other to make sure there is no gap of regulation. In
explaining the gap of regulation, most physicians prescribe representative induced medicine
to the patients; BSTI check if any product is edible only and DDA do not specify their scope
of activities to other organizations

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E2: Selling open trade commodities (OTC) without having approved list.

People always buy open trade commodities for day to day activities. In purchasing medicine,
people buy painkillers, aspirins, saltines, anti-acidity suspensions or tablets, many sorts of
vitamins etc of different intensity very frequently. Some drug highly requires physicians’
prescriptions to buy or sell but are being traded as open trade commodities. Some profit
seeking sellers are selling both prescribed and non-prescribed drugs to the people. Not all
drugs openly traded are not regular drugs. Without any doctor’s advice, consuming non
regular drugs can be harmful to patient. Considering the average knowledge level about
awareness’ of patients or persons acting on behalf, it is the sellers’ responsibility not to sell
non-regular medicine of any form without doctors’ prescriptions. [Ref. 6]

Sellers are not willing to sell certain non regular drugs which explicitly dangerous if
consumed without doctors advice. But if we categorize whole drugs available in the market
into two groups. There are OTC drugs and non-regular drugs. There is no approved list of
either OTC drugs or non-regular drugs. As there is no specification of OTC drugs, most drugs
can be bought and sold without restriction. Drugs can be used to cure diseases but can also
make adverse effect without recommended consumption. [Ref. 11]

E3: Exploitation of deficiency of drug testing procedure by the manufacturers.

There are two physical parts of a drug. One is the major component and another is supportive
component. In Bangladesh, manufacturing companies and drug regulatory authority test
fitness of only major components of drugs. The drugs which are not produced in the country,
drug regulatory authority test those drugs. Untested components of drug can be harmful to
public health.

As there is no law or guideline regarding testing procedure of drug. Most manufacturers

except those are exporting drugs to abroad, do not test supportive component. Manufacturer
will not proactively do it for the sake of cost reduction though every part of drug is consumed
and sensitive to people’s health. [Ref. 6]

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8. Recommendation

According to the findings of the study, the following steps can be taken to solve mentioned
problems.

1) The DDA should be expanded and upgraded as soon as possible. Adequate regulatory
authority and administrative autonomy should be awarded.

2) The Central Drug Testing Laboratory should be strengthened. Divisional Drug Testing
Laboratories may be set up in phases.

3) The laboratories should be equipped with modern facilities and a sufficient number of the
Pharmacists and other technical personnel should be appointed to run the laboratory
effectively.

4) The Central Pharmaceutical Reference Laboratory may be set up with the collaboration of
DRA and the Pharmacy Council of Bangladesh.

5) The government may take initiative to appoint adequate number of consultants to support
the medium sized pharmaceutical manufacturers in improving upon their GMP compliance
levels. [Ref. 4]

6) Health professionals and drug manufacturers should be more committed in order to

achieve the goals of the National Drug Policy (NDP). [Ref. 12]

7) Customs authority should be more conscious about drag trafficking

8) Empowerment of drug inspectors should be done by the government.

9) Compliance of GMP should be enforced by law. [Ref. 10]

10) Food supplements should be regulated as like as drugs

11) There should be a specific list of open trade drugs

12) Shopkeepers’ and end users knowledge about rational drugs should broaden via special
training.

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13) Along with DDA, other parallel regulatory authority should co-operate each other.

9. Conclusion

Likewise any other industries in Bangladesh and the rest of the world, drug industry of
Bangladesh have more or lesser extent of legal or ethical problems. Identifications and
mitigations of any problems in this industry should be encouraged and rewarded. After all, at
end of the day we do not want to see two things. One, a person engaged in a drug industry
buying drugs other than the engaged one. Two, a solvent civilian avoiding drugs produced in
his or her own country.

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10. References

1. The Drugs Acts and Rules (1940-’84), pp. 4

2. Directorate of Drug Administration

http://www.pharmacybd.com/control_authorities/dda.htm July 5, 2009.

3. Rahman, R., (2007), “The State, the Private Health Care Sector and Regulation in
Bangladesh”, Asia Pacific Journal of Public Administration, Vol. 29, No. 2, pp. 191-206.

4. Zahedee, M.N.S., (2009), “Good Manufacturing Practices in Bangladesh”, The Financial

Express.

5. Wikipedia, (2009a), “Good Manufacturing Practice”, Wikimedia Foundation Inc.

6. Alam. S.S., (2009), Assistant Director, Directorate of Drug Administration, Interviewed.

7. Wikipedia, (2009b), “Dietary Supplement”, Wikimedia Foundation Inc.

8. The Drugs Acts and Rules (1940-’84), Section. 18, pp. 14.

9. The Drugs Acts and Rules (1940-’84), Section. 22, pp. 16-18.

10. Karim, F., (2005), “National Drug Policy”, Ministry of Health and Family Planning,
Section. 4(i), pp. 6.

11. Karim, F., (2005), “National Drug Policy”, Ministry of Health and Family Planning,
Section. 6(iii), pp. 7.

12. Islam, M.S., (2008), “Therapeutic Drug Use in Bangladesh: Policy vs Practice”, Indian
Journal of Medical Ethics, Vol. 5, No. 1, pp. 24-25

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