9.1% of TB Drugs Fail Quality Control: Roche Holding Ltd. (ROG)

Still, drug failures due to poor quality are most likely to occur in Africa (where the IJTLD study found a 16% failure rate), a single case of TB in the US can generate costs easily exceeding $200,000.  (To give the consumer-facing investor a sense of TB’s impact, that one American’s ailment is the equivalent of 400 iPads.)  Already, Homeland Security has prioritized a new drug-resistant strain of TB which has been discovered in numerous countries, including the US.  With over eight million people afflicted with TB every year (of which nearly 20% die), TB has become the world’s second most deadly infectious disease, and the first, HIV/AIDS, has intensified TB’s impact.

The study found that registered (which are theoretically legal and regulated) TB pharmaceuticals were six times less likely to be sub-standard, but 4.4% still failed to meet basic requirements – far from the 0% regulators (and consumers especially) aim for (as this means thousands of patients will receive too low a dose of the drug and overall resistance to treatment will increase).  Drawing on similar work, the study speculated that less than half of their sub-standard findings were deliberately counterfeited.  The remaining results were likely the result of poor manufacturing and inadequate wholesaling storage.

Even more disconcerting for investors and other interested parties is that just as there is increasing evidence that ratings agencies and accounting firms are failing to provide accurate and useful information, it also is becoming evident that guardians of pharmaceutical integrity are going down the same path.  While (German) Merck and Cepheid are making it possible for private and public authorities to react to the TB threat, corrupt governments, unaccountable mega-nonprofits, and international bureaucracies have clearly not been doing their part.

Based on his work with anti-malarials, Roger Bate pointed out that the World Health Organization does not like to tackle sub-standard and powerful legal pharmaceutical producers, and it should make observers ponder whether BRICS’ health ministries or other drug regulators will have the moxy to do so either.  So for now, investors and others interested in the future of pharmaceuticals might be inclined to put their faith (and capital) in consumer-driven responses and solutions.

The article 9.1% of TB Drugs Fail Quality Control originally appeared on Fool.com and is written by Nick Slepko.

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