The Electoral Bond data has unearthed a complex web of nexus between the BJP, enforcement agencies and private pharma companies. To understand the scale of political corruption by the BJP, one has to juxtapose the donations from ED, Electoral Trusts and corporates with the 'Ease of Doing Business' policies that have been given on a platter to the rich and the corporates by the Modi regime.
A quick look at the recently released data on income inequality by the World Inequality Lab makes the picture clearer. The report notes that today, India is now among the most unequal countries in the world. The rich (1% of the population) are getting richer, and the poor poorer. The report notes, “While the top 10% and top 1% hold respectively 57% and 22% of total national income, the bottom 50% share has gone down to 13%. India stands out as a poor and very unequal country, with an affluent elite. At the very top of the pyramid, the wealthiest 10,000 individuals own an average of Rs. 2260 crore in wealth, 16,763 times the average Indian.”
Though the trend of consolidation of wealth in the hands of the rich is clearly visible from 1990s onwards, the period India implemented the neoliberal economic model, but post 2014-15 this consolidation skyrocketed. Clearly, the slogans of Acche Din and Amrit Kaal are benefiting the rich and the elites, the top one percent.
This enormous consolidation of wealth in a few hands is a part of the largest economic-political corruption — the crony capitalism — India has seen in its history. While the rich amassed their wealth, the oligarchs close to the Sengol wielding king received ports, airports and several humongous projects.
The data on electoral bonds exposes corporate houses involved in infrastructure, mining and other sectors, and their relationship to the ruling BJP. In this article, we will focus on the healthcare and pharmaceutical sector, which deeply impacts the lives and livelihood of millions, especially people at the bottom of the wealth pyramid. In previous issues of Liberation - COVID-19 Vaccine Debacle: Why are people left at the mercy of the market? (June 2021) and The Unhealthy Medicine Scenario in India (June 2023) - we explored how the market oriented and privatised pharma and healthcare push by the BJP government is hitting people hard.
Vaccines & Donations
The COVID-19 pandemic in India had left the country's millions of people suffering due to lack of access to healthcare and medicines. When the ICMR-National Institute of Virology developed the vaccine, the BJP government decided to go for a market-oriented vaccine strategy rather than utilising the country's public sector resources. Why did India with a rich history of strong immunisation programs, went for private players? The electoral bond and electoral trusts’ donations sheds some light on this.
Serum Institute of India (SII) donated around Rs. 50.02 crores to the Bharatiya Janata Party via Prudent Electoral Trust during 2022-23. Meanwhile, in January 2024, Bharat Biotech International Limited and related firms like Chiron Behring Vaccines Private Limited, Biovet Private Limited and RCC Nutra Fill Private Limited donated Rs 25 crore to the Chandrababu Naidu-led Telugu Desam Party. The BJP has recently forged an alliance with the TDP for the ongoing elections.
Article 14, in an article published in November 2021 noted how Bharat Biotech, then a small Hyderabad-based company, has been offered a virtual monopoly by the Modi government. Bharat Biotech was reaping gigantic profit for a vaccine which was largely developed and invested by the government. Furthermore, in response to a Rajya Sabha question, it was revealed that the government had transferred the viral strain isolated by the ICMR-NIV to Bharat Biotech for a one-time fee of mere Rs 5 lakh.
We will now take a look at the entire pharmaceutical / drug manufacturing sector vis-a-vis EB donations.
Drugs & Bonds
Around 35 pharmaceutical companies have contributed a whopping Rs 1,000 crore to political parties through electoral bonds. Many of them were facing ED or IT or enforcement agencies like drug control authority at the time of purchasing the bonds.
1. Torrent Pharma tops the electoral bond list in the pharma sector donations to BJP, with the company giving away Rs. 61 crore to the ruling party between 2019 to Jan 2024.
In September 2019, Losar H drug (for lowering blood pressure) manufactured by the company failed a quality test by the Gujarat Food and Drug Administration. Again, in October 2019, the US Food and Drug Administration issued a warning of quality related failure at Torrent's manufacturing unit in Gujarat. However, no action was taken against the pharmaceutical company. Furthermore, in December 2021 and February 2023, Nicoran LV (to treat heart diseases) and Lopamide (for controlling diarrhoea) failed to meet quality standards.
2. Dr Reddy’s Laboratories, which bought bonds worth Rs 84 crores, donated Rs. 32 crore to BRS and Rs. 25 Crore to BJP. IT officials conducted raids in November 2023 on Dr K Nagender Reddy of Dr Reddy's Laboratories over allegations of tax evasion.
3. Natco Pharma Ltd purchased a total electoral bond worth Rs. 69.25 crore, and Rs. 15 Crore went to the BJP. Hetero Pharma and associated entities gave Rs. 50 crore to BRS and Rs. 10 Crore to BJP. Divi's Lab donated Rs. 30 crore to the BJP out of the total Rs 55 crore worth of bonds purchased. The company had faced several non-sanitary and contamination complaints regarding its production facility during US FDA inspections in Natco facility in Mekaguda in August 2019 and October 2023.
4. The accused turned approver in the alleged Delhi Liquor Scam case, Sarath Reddy was the director of Aurobindo Pharma, a company which along with two of its subsidiaries (Eugia Pharma Specialities Ltd and APL Healthcare Ltd) donated Rs. 55 crore to the BJP. Interestingly, Aurobindo Phrama purchased electoral bonds worth Rs 5 crore on November 15, 2022, five days after its director was arrested in the liquor case. On November 21, the BJP encashed this sum, and soon, in June 2023, Reddy was made approver in the case. On November 8, 2023, Aurobindo Pharma and the two subsidaries donated in total an amount of Rs. 50 crore to BJP via EBs.
5. Another big name in the Pharmaceutical industry, Cipla donated almost all of its bond amount to the BJP. Cipla gave Rs. 37 crore in Bonds to the BJP. The company received four notices regarding substandard drugs between 2018 and 2022. According to Scoll.in, in 2018 Cipla's RC cough syrup failed quality standards and in 2019 the company purchased bonds worth Rs. 15 crore. Again, in July 2021, it received notices of quality failure and in November 2022, the company purchased bonds worth Rs. 25.2 crore.
6. Sun Pharma and Labs gave its entire bond amount of Rs. 31.5 crore to the BJP. According to Reporters Collective, in 2022, this company was taken to NGT for environmental violations for its proposed expansion of a bulk drug manufacturing unit in the Kancheepuram district in Tamil Nadu. Though it got the Central government’s environment clearance just three months after applying, but the strong opposition from the locals and with case in NGT, the clearance was put on-hold.
7. In 2022-2023, Zydus Healthcare, a Gujarat-based company gave Rs. 18 crore to the BJP. According to reports, in 2021, the drug regulatory authorities in Bihar had flagged a batch of Remdesivir produced by the company as substandard after traces of bacterial endotoxin were found in them.
8. The Hyderabad-based Hetero Labs and Hetero Drugs Ltd purchased electoral bonds worth Rs 39 crore in April 2022. This was at a time when the company's drug manufacturing arm was facing complaints about substandard quality. The company was issued six notices for failing drug quality tests by the Maharashtra Food and Drug Administration, including for Remdesivir, an antiviral drug widely used in Covid-19. Remdesivir was in massive demand during the pandemic. Furthermore, its antifungal medicine, Itbor and antibacterial drug, Monocef, were found to be substandard in 2021. Apart from this, the Hetero entities faced IT raids and protests regarding industrial pollution. Overall, the Hetero companies together donated Rs. 50 crore to the BRS and Rs.10 crore to the BJP.
Journalists Soumyarendra Barik and Aanchal Magazine (The Hindu, March 15) mapping the pattern of electoral bonds and actions by enforcement agencies notes:
On one particular day, November 10, 2022, major pharma companies including Cipla, Dr Reddy’s, and Ipca Laboratories purchased bonds totalling close to Rs 50 crore. A day later, Glenmark and Mankind also purchased bonds worth over Rs 30 crore. Three days later, on November 14, Alembic Pharmaceuticals, Alkem Laboratories and Piramal bought bonds worth over Rs 20 crore.
Incidentally, in March 2022, the Directorate General of Goods and Services Tax Investigation (DGGI) had started a probe against several pharmaceutical companies for alleged tax evasion, including Glenmark Pharma, Cipla, Mylan and Aurobindo Pharma.
In total, Prime Minister Modi's party received a whopping Rs. 420 crore from the pharmaceutical and healthcare sector alone.
Pharma and Government - Quid pro quo?
Public health experts have raised serious concerns regarding the pattern of electoral bond purchases by pharma companies, especially as the pharma lobby in India has been pushing for concessions from the government, both for increasing drug prices and also for regulatory relaxations. The BJP's 'ease of doing business' policy and the red carpet for the rich and the private sector has been the result of this corporate nexus. In return for donations to BJP the pharma industry has gained considerably.
For example, the government's gross and wilful neglect of public sector companies and manufacturing units (as seen in the case of COVID-19 Vaccine) has given pharma companies more leverage to push for corporatisation of healthcare and thus increased drug prices. In April 2023, the Modi government approved an increase in the prices of essential medicines by 12.12 per cent. This was the highest ever annual increase in the prices of drugs in recent times. Previously in 2022, the drug prices were increased by 10.70 per cent.
Furthermore, the government has announced a scheme for 'Promotion of Bulk Drug Parks' where support will be provided to companies involved in crucial bulk drug production. Bulk drugs or Active Pharmaceutical Ingredients (APIs) are the main ingredients of a drug or medicine. While, the API domestic production will considerably reduce the burden of imports and can help drug production costs, but experts argue, it is only helping private players at public expense. As long as major public sector involvement is lacking, the access to medicine will remain a major challenge.
The money for this scheme was allocated in the Union Budget for the Department of Pharmaceutical, primarily for its Production Linked Incentive (PLI) Scheme for pharma companies. The BJP government had allocated Rs. 4,089.95 crore for this scheme for the fiscal year 2024-25, which is higher than the Rs. 3,160.06 crore outlay estimated for the fiscal year 2023-24.
In 2023, the application of Aurobindo Pharma (via subsidiary Lyfius Pharma Pvt. Ltd), which together with it's related firms gave Rs. 55 crore to the BJP in EBs, was approved under PLI scheme for manufacturing of Penicillin G, a key fermentation-based API.
Interestingly, India's public sector (like Hindustan Antibiotic Limited and Indian Drugs and Pharmaceuticals Limited) was once a world leader in production of fermentation technology-based APIs like Penicillin G (Liberation, June 2023). But due to the anti-public sector policies of the government and the increasing focus on market based approach, many of these PSUs have shut down, with India now forced to depend on fermentation based APIs .
In 2019, most of these drug companies including Sun Pharma’s US arm Taro, Zydus, Lupin, Aurobindo Pharma, Dr Reddy’s and Glenmark were accused in the US of market manipulation and unfair practices in collusion with an Israeli Pharma to inflate the prices of generic medicines. As per reports, due to the manipulation 112 drugs saw a price rise of around 1000 percent. Aurobindo Pharma is the largest provider of generic drugs by prescription to the US market.
Another major concern regarding the staggering amount of money being given to political parties in power by Pharma companies is hampering the ability of the government machinery to take action in cases of spurious drugs and substandard medicines. As illustrated above, several of the products of these drug companies failed drug quality tests. These incidents of the drug quality failures faced by pharma companies should have attracted immediate suspension of manufacturing licences, but instead business was as usual for them. According to reports, around 3 to 4 percent of drugs are found to be substandard or fake, or spurious in India.
Once known for high quality generic drugs, today we witness several cases of death and injury due to spurious drugs in India. WHO in 2022 had flagged a warning over four Indian-made cough syrups thought to be linked to the deaths of 66 children in the African nation of Gambia.
Clearly, both the BJP government and pharma companies feared the bond exposé. Many of these pharma companies are members of either Indian Drugs Manufacturers Association (IDMA) and/ or the Indian Pharmaceutical Alliance (IPA). Both these pharma associations influence policy making on aspects concerning drug regulation and drug pricing. The regime tries its best to keep the lid on this nefarious nexus of crony capitalism.
Data from electoral bonds, trusts and other corporate donations gives a snapshot of the correlation between the pro-corporate policy of the government and the rising income inequality in the country. The increasing privatisation of the pharma and healthcare sector has played a vital role in exacerbating this. Today, India is among the countries with the largest out-of-pocket expenditure in healthcare, with people having to pay around 48.2 percent of the total cost from their pocket.
