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Illegal drug trade outsourced to
India, too
By Siddharth
Srivastava
NEW
DELHI - High-speed communication links combined
with lower costs in comparison with the
United States is what led to the outsourcing of
jobs to India. This now appears to apply to crime,
too. In what has been described as the biggest
illegal bust involving Indians, a
multimillion-dollar drug racket has been unearthed
by US and Indian authorities. Predictably, the
illegal 
drug trade flourished
courtesy of the Internet, lax law enforcement and
norms in India, as well as the economies of lower
prices.
A year-long investigation
by Indian and US authorities has revealed
that narcotics and psychotropic tablets
(pharmaceutical controlled substances as well as medicine) in
huge bulk were illegally exported from India to the
US through orders placed via Internet
pharmacies, hundreds of which dot cyberspace.
The front-end (US-based servers, e-mail queries
and websites) was managed by US citizens, while
the back-end supply of drugs was handled by a team
of Indian doctors who procured the
requisite permission to buy the drugs in India, which
were then shipped (or couriered) to the US,
repackaged in Philadelphia and New York, and sold to
the end-users. Authorities in Delhi have seized more than 4
million tablets valued at US$5 million, while over
$7 million in funds belonging to the Indian cartel
has been frozen in bank accounts around the world.
The drugs include generic versions of
narcotic painkillers such as Vicodin and
Oxycontin, amphetamines such as Ritalin, anabolic
steroids, sex stimulant Viagra and dozens of other
controlled substances, such as diazepam,
alprazolam and paracetamol with codeine. "In this
first major international enforcement action
against online rogue pharmacies and their source
of supply, we have logged these traffickers off
the Internet," announced US Drug Enforcement
Authority administrator Karen P Tandy.
Explaining this illegal trade, an
official of the Narcotics Control Bureau in India said
the reason for such a massive scale of exports was
the huge price difference in medicine in India
compared with advanced countries such as Canada, Australia
and the United States. "It is mostly due to the
patent regime in these countries that the prices
of medicines are very high there, and exploiting
this price difference, unscrupulous elements
illegally export these medicines to these
destinations from countries where prices are
comparatively less."
Kudos is due to
the Indian and US authorities who have for the
first time jointly cracked an illegal operation of
such a scale being conducted via the Internet.
The biggest problem in dealing with cyber-crime
is that there are no uniform laws
internationally. Some countries, such as the United Kingdom,
have cyber-crime laws, including the Computer Misuse Act
(1990), which are well implemented. Other
territories have laws that have yet to be fully
implemented, while some countries are yet to make
provisions for cyber-crimes within their judicial
system. If there are no relevant laws in the
country where the crime originates, no one can be
found guilty of breaking them.
International Internet crimes with Indian
involvement have been unearthed earlier, but more
in the nature of individuals hoodwinking others.
Cases involving extortion, false identities in
love affairs and hacking are quite common. One
Indian ostensibly sold property worth hundreds of
thousands of dollars on the Internet, but the
bogus papers turned out to be for the residence of
the prime minister of India.
Recently, a
supposed new-age guru was arrested for harassing a
British woman who had been lured to his
ashram (place of worship) by convincing her
father that he possessed "great spiritual powers".
The guru kept his contact with the lady's family
through the Internet and finally made the woman
come to India by threatening her father that he
would turn the young woman mad through his
spiritual powers if he refused to send her to him.
In another first of its kind that has rattled the
Indian business and process-outsourcing industry,
employees of Mphasis, which handles the back-end
operations of Citibank, managed to siphon funds
off accounts by accessing secret codes after
colluding with bank employees in the US.
However, the drug-transfer crime goes much
deeper, highlighting the scaling of time and
spatial constraints to take advantage of a
distorted paradigm, in an increasingly connected
world.
It may be recalled
that the drug-patent regime in India, unlike
in Western countries, is based on what is termed product
patents, in contrast to process patents. The
system is designed to encourage low-cost
manufacturing of drugs, develop the pharmaceutical
industry and make medicines widely available at
low prices. Despite the great success of this system,
its end was required by a World
Trade Organization agreement demanding that all countries
(with some exceptions) switch to process patents.
While India changed its patent law last December to meet
the January 2005 WTO deadline, the ground
situation is very different.
Although
Indian pharmaceutical companies are now heavily
investing in research in order to compete with
international firms, there is not much political
backing to the new system as there are fears that
the rise in prices consequent to the new regime
will make medicine inaccessible to the poor.
The question is: While one understands the
exigencies of multinational pharmaceutical
companies needing to protect their patent rights
as well as profits, why should medicines, whether
in India or anywhere, be inaccessible to those who
need them? This, in effect, resulted in the
illegal trade of medicine from India, which is not
to justify the crime, but to highlight a distorted
regime.
It
is estimated that the international intellectual-property
agreement (known as TRIPS,
for Trade-Related Aspects of Intellectual Property Rights, which many countries were
forced to ink when nobody understood
the consequences of pharmaceutical patents) will
cost India's economy more than $700 million each year, while
creating only $57 million in profits for
multinationals. Surely, there is a need to revise
the paradigms (some speak of government regulation
and funding), if they need to be implemented,
despite pressure from the powerful international
pharma lobbies. After all, this is not about
pirated music.
A recent Reuters report
quoted an unnamed pharmaceutical executive who
said: "There could easily be 70 [million] to 80 million
people [in India] who can afford expensive
medicines, just as they go out and buy expensive
cars, branded clothes and consumer goods. That is
equal to the size of a UK or a Germany. But India
has a population of over a billion - meaning that
the industry will be pricing new drugs for less
than 10% of the population, with over 90%
excluded."
Another recent article
in Nature Medicine notes that India is
the fourth-largest producer of pharmaceuticals in
the world and two-thirds of its exports go to
developing countries. The article notes that at
least 15% of drugs now on the market in India,
including some AIDS drugs, are likely to be
withdrawn.
The supply of cheap medicine (made by
reputed pharma companies such as Ranbaxy, Dr Reddy's and
Nicolas Piramal to take on the likes
of Pfizer and GlaxoSmithKiline) is an extension of
the overall cheaper medical regime in India that has led
to the emergence of India as an international
destination of medical care. Private-sector specialty hospitals
in India offer treatment and facilities
that meet international standards at 10-20% of the cost of
treatment abroad. These hospitals have in their own way
also turned into ruthless commercial enterprises as
in the West, but at least they have the cost
factor in their favor.
Siddharth
Srivastava is a New Delhi-based journalist.
(Copyright 2005 Asia Times Online Ltd.
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