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VW’s ‘defeat device’ versus GVK’s electrocardiograms: what Indian regulators must ‘Make in India’

VW’s ‘defeat device’ versus GVK’s electrocardiograms: what Indian regulators must ‘Make in India’

In early September, a Financial Times article titled “Indian Drugs: Not what the doctor ordered” took stock of the Indian pharmaceutical industry in light of the US Food and Drug Administration (FDA) bans on imports from 39 drug companies in India over the last two years, leading to a credibility crisis.

Are drugs produced in India really sub-standard or is India fighting a battle of perception created by the misdeeds of a few companies?

While this was happening, another scandal rocked the corporate world. The US Environmental Protection Agency disclosed Germany-headquartered automobile major – Volkswagen (VW) – had employed software on some cars to trick the results of routine emission tests. As news continues to pour in on the VW issue and impacts millions of car owners, the incident may turn out to be the largest global car recall ever. Germans pride their cars and environment above everything else. And the VW scandal involves both. 

This week we compare the approaches taken by Volkswagen and GVK Biosciences in India. Europe suspended 700 different drugs, which used clinical data generated at GVK Biosciences (GVK BIO) in India, as GVK BIO allegedly falsified electrocardiograms (ECGs) while conducting clinical trials to demonstrate equivalency of generic medicines to those of the innovator.

Our table below highlights the significantly different approaches taken by both the organizations while handling quality problems with regulators.



GVK Biosciences


September 18, 2015

May 19, 2014

The issue

Installation of a defeat device software on cars to fool emission tests

Falsification of electrocardiograms detected in each and every one of the 9 trials inspected

The regulator

US Environmental Protection Agency (EPA)

French agency on medicinal products (ANSM)

The impact

About 11 million cars

About 700 different medicines suspended

The financial impact

EPA penalties could reach US $ 18 billion

India’s export loss estimated between US $1 billion to US $ 1.2 billion

Severity of problem

Car engines emitted nitrogen oxide pollutants up to 40 times above what is allowed in the US

Falsification of ECGs was performed by at least 10 different individuals and took place between July 2008 and 2013

The company’s response

"We've totally screwed up," said VW America boss Michael Horn.

Chief executive Martin Winterkorn has resigned, although he denied any wrongdoing.

Actions by the agency are highly disproportionate to the actual risk posed to human health. To counter the findings, GVK Biosciences sought the opinion of four independent cardiologists. The reports from these cardiologists indicated the ECGs could belong to multiple volunteers and it was difficult to conclude that the ECGs belong to the same volunteer.

The US/EU divide

Nitrogen oxides in the US are capped at 60 milligrams per kilometer. While Euro 6 emission standards became effective this month, the previous standard Euro 5 had a limit of 180 milligrams per kilometer, three times higher than what was permissible in the US.

FDA’s spokesman wrote to the Wall Street Journal that the FDA inspection in September 2014 did not reveal systemic issues

The government

Conservative German lawmaker, Oliver Wittke believes “economic interests in the US are also playing a role here”, while others accuse Chancellor Angela Merkel of being “in bed” with the car industry. Some even say that German ministers turned a blind eye to the problem.

Conspiracies aside, Angela Merkel urged Volkswagen to move "as quickly as possible" to restore confidence in a company held for generations as a paragon of German engineering prowess.

The Indian government is supporting GVK Biosciences completely and cancelled Free Trade Talks with the EU over the GVK ban.

A six-member multi-disciplinary committee has also been appointed, which found no manipulation in the ECGs.


The conclusive difference: Aggressive action versus clamoring for justice

In less than a week of emergence of the Volkswagen “Defeat Device” scandal, Gina McCarthy, Environmental Protection Agency (EPA) administrator told The Wall Street Journal: “I’m pleased that Volkswagen is taking such an aggressive stand on admitting the problem and attacking it”.

The GVK Biosciences story, on the other hand, is quite the contrary. A year on, the support extended by the India government to GVK Biosciences has been questioned. Rather than acknowledging its shortcomings and “taking proactive measures to correct them, the government continues to blame ‘western interests’ for” GVK Biosciences’ woes. 

The industry is also questioning another recent initiative of the Indian government. India’s central drug regulator has started the biggest sampling drive ever in the country to conclusively analyze the extent of counterfeit drugs available in the market. 

The plan to conduct this quality check in order to make or break India’s reputation as a leading manufacturer of generic medicines, challenges the fundamental premise of a robust pharmaceutical quality system since a vast majority of pharmaceutical professionals in India recognize that “testing-to-document quality is only a part of its collective standard” for assuring pharmaceutical quality. Honoring the regulatory commitments made and demonstrating adherence to good practices (e.g., CGMPs) are perceived to be minimally essential.

The Volkswagen case shows regulators in Europe and the USA seek urgent action, which in turn demonstrates that the quality problem has been acknowledged and addressed.  Moving on “as quickly as possible” to restore confidence, is an expectation to get back into a state of compliance with the regulatory agencies. 

The GVK Biosciences issue, on the other hand, appears to be an open and shut case from the European point of view. Meanwhile, the Indian side is still clamoring for justice.


Our view

India is beginning to battle a huge perception issue on the quality of drugs produced, as illustrated by the Financial Times headline. 

For the ‘Make in India’ campaign to succeed, “a bold commitment by regulatory and political leaders of India to one global quality standard will change debates into opportunities for collaboration,” Dr. Ajaz Hussain, Executive Director at the National Institute for Pharmaceutical Technology and Education and CEO at Insight Advice and Solutions LLC, said in his post on LinkedIn.

 “Clear and effective communication is urgently needed to prevent perceptions that there is, perhaps, a reluctance to face facts as they are,” he adds. 

And that’s our sentiment, exactly.


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Image Credit : 1973 Volkswagen Advertising Road & Track November 1973 by SenseiAlan is licensed under CC BY 2.0

“ The article is based on the information available in public and which the author believes to be true. The author is not disseminating any information, which the author believes or knows, is confidential or in conflict with the privacy of any person. The views expressed or information supplied through this article is mere opinion and observation of the author. The author does not intend to defame, insult or, cause loss or damage to anyone, in any manner, through this article.”

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