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IMPACTS OF PHARMACEUTICAL POLLUTION ON COMMUNITIES AND ENVIRONMENT IN INDIA Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

CONTENTS

EXECUTIVE SUMMARY

Part 1 – AMR & pharmaceutical pollution

I. Pharmaceutical pollution – Impacts on the environment and human health

II. The environmental impact of antimicrobials

III. Key levers of AMR

IV. Occurrence of AMR in India

Part 2 – The Indian pharmaceutical industry

I. The expansion of the Indian bulk drug industry

II. The emergence of Hyderabad and Visakhapatnam as poles of bulk drug manufacturing

III. An export-oriented industry with global ambitions

Part 3 - Pollution in Hyderabad and Visakhapatnam 2 3 I. A long history of pollution

II. The investigation

A. Manufacturing plants and the companies that operate them a. Hyderabad area b. Visakhapatnam area

B. Industrial waste treatment in Hyderabad and Visakhapatnam: a tale of shocking dysfunction and industry capture

C. Local pollution impacts in Hyderabad and Visakhapatnam areas a. Hyderabad and surrounding areas b. Visakhapatnam and surrounding areas

D. Conclusion

PART 4 – Solutions and call to action

I. Recommendations for industry

II. Recommendations for investors This report was researched and prepared for Nordea by Changing Markets and Ecostorm. III. Recommendations for policymakers

Published in February 2016

Designed by Pietro Bruni Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

Close-up of effluent by the Hetero plant in Gaddapotharam

Executive Summary

India is in the grip of a severe water pollution geographically dispersed industry reliant on a as hospitals from understanding the risks of doing subcontinent. crisis. A 2015 report from the Indian Government highly complex supply chain network comprising business with specific companies. With increasing estimates that the number of contaminated thousands of suppliers worldwide.2 Outsourcing of understanding of the financial risks to business as Based on evidence from an on-the-ground waterways has more than doubled in the past five production to the emerging markets, where labour a result of environmental degradation - key among investigation in the southern Indian states of years and that half of the country’s rivers are now is cheap, workforces skilled, and environmental them the pollution of water sources - and potential Telangana and Andhra Pradesh in early 2016, as polluted1. A variety of factors have contributed standards lax, has now become second nature for health problems that pharmaceutical pollution well as thorough analysis of industry data and the 4 5 to this critical situation, notably the staggering the pharmaceutical majors, many of which are can trigger notably with regard to antimicrobial latest academic research, this report documents quantities of untreated sewage generated in this based in the United States and Europe. resistance (AMR), this is a problem that must be local impacts of drug pollution – including extreme country of nearly 1.3 billion people. Another major addressed head-on. contamination of waterways and agricultural lands cause is industrial pollution, the dark side of India’s Indeed, the vast majority of the world’s drugs - and identifies some of the key players at the root economic development. are now manufactured in India and China. While There are several elements to consider of the problem. It draws links between polluting China has become the dominant supplier of the when assessing the pharmaceutical sector’s manufacturers and some of the large multinational In recent decades India’s pharmaceutical industry Active Pharmaceutical Ingredients (APIs)A used to environmental footprint. One is the energy used pharmaceutical companies they have dealings with, has scaled new heights in step with a steady rise in make medicines, India has a sizeable share of API during production and processing. Another is the highlighting the need to establish and implement population and thanks to its reputation as a low- production itself, and has also carved out a niche in generation of waste – solid, liquid or airborne - from strong environmental standards at every stage of cost manufacturing destination for multinational processing drugs, which it ships to markets around the manufacturing process. While pharmaceutical the supply chain. drug companies. In particular, its bulk drug the world as finished products. contamination of water has only recently production sector, which has a major hub in the permeated the public consciousness, it has been The overall picture that emerges is one of an southern Indian city of Hyderabad and a more recent Pharmaceutical supply chains are as opaque as on the scientific community’s radar for decades. industry with a disconcerting lack of commitment presence along the coastline of Andhra Pradesh, they are complex and while it is relatively easy to There is now a compelling body of research on the to environmental stewardship, be it on the part of has experienced a rapid ascent since the 1970s. describe broad trends, granular detail is hard to negative effects resulting from the accumulation of the manufacturing units in India or the large global While this has yielded obvious economic benefits come by. Information about the origin of APIs and pharmaceuticals in the environment, which range brands they are contracted by. What is more, the for both Indian and overseas-based firms, as well the finished products that end up on our pharmacy from the near elimination of entire species3 to the political context in India makes enforcement of as dividends for shareholders, scant attention has shelves is jealously guarded by drug firms, which feminisation of fish4 and the spread of AMR. any domestic measures to improve the situation been paid to the impact of increased pharmaceutical are unwilling to open up their supplier relationships in the short term challenging. In light of this, and production on the environment and inhabitants to public scrutiny. The situation is not helped by This report looks at the latter aspect, focussing on of the massive global threat antibiotic pollution living in proximity to factories and industrial parks. the hands-off approach of regulators who could the major public health threat posed by pollution represents, it is argued that the pharmaceutical easily demand more supply chain transparency. This from antibiotic production in India, which is industry must act swiftly and effectively to manage The emergence of a globalised pharmaceutical poses a number of problems: first, if there is no believed to be contributing to soaring drug its environmental impacts wherever they occur sector, which accelerated in the wake of the World information, it is impossible to hold bad companies resistance rates in the country and further afield. in the supply chain or run the risk of suffering Trade Organisation’s agreement on trade-related accountable and reward more progressive ones for This has serious implications for global health considerable reputational damage as a result. aspects of intellectual property rights (TRIPs) their efforts. Secondly, the lack of a level playing as antibiotic resistance genes spread around the in 1994, has given rise to a sophisticated and field prevents investors and public institutions such world through travel and trade with the Indian

A. The U.S. International Trade Commission defines APIs as “the primary, active ingredient(s) of a final pharmaceutical product, produced in the first stage of pharmaceutical production and usually in bulk quantities.” (U.S. ITC, 2007). In this report they are largely synonymous with the term “bulk drug.” Impacts of pharmaceutical pollution on communities and environment in India Pollution on Musi river Impacts of pharmaceutical pollution on communities and environment in India

PART 1 - AMR & pharmaceutical pollution

I. Pharmaceutical pollution – impacts human or animal excretion, or in run-off from on the environment and human farms, scientists are increasingly exploring the role health that drug manufacturing discharges play in boosting concentrations of pharmaceutical substances in Compared to other forms of industrial pollution, the environment. The outsourcing of production the impact of effluent from the production of from countries such as the United States and EU pharmaceuticals on water and the biosphere Member States, where water treatment is relatively remains an underexplored issue and consequently well regulated and enforced, to emerging markets, off the public radar. However, a growing body of where sewage and industrial emissions are often scientific research indicates that the environmental dumped untreated or only partially treated in the consequences of discharging large quantities environment, adds to the urgency of addressing this of drugs and toxic chemicals into our natural aspect. surroundings are too great to be ignored and require rapid corrective action on the part of industry, as API residues are already widespread in the aquatic well as targeted policy interventions. environment, albeit mainly at trace levels.7 Nevertheless, there is clear evidence that even in For example, in 2013, a study published by the tiny doses some drugs have a measurable effect. EU’s Executive Agency for Health and Consumers One of the most shocking and widely reported 6 7 (EAHC) provided a wide-ranging assessment of examples of this is the startling decline of South the environmental risks associated with medicinal Asian vulture populations at the beginning of the products, examining the various pathways by 2000s. Trace amounts of the drug diclofenac (an which pharmaceuticals enter the environment, anti-inflammatory commonly used in livestock how they behave in the environment, and the risks rearing) present in in the carcasses of dead cattle they present to ecosystems and human beings. The having undergone treatment, was found to be report pointed to manufacturing as one of three key responsible for the death of birds which had feasted steps from an environmental perspective in the life on the carcasses and led to a collapse in vulture cycle of a product and noted that even in the EU, populations in India and its neighbouring countries a highly regulated market, the lack of systematic Pakistan and Nepal. So devastating was the impact monitoring of emissions during manufacturing that diclofenac was banned in India, Pakistan, means that the amount of Active Pharmaceutical Nepal and Bangladesh. Despite this, the drug is still Ingredient (API) releases from production facilities being found in cattle carcasses, proof that once the is largely unknown. 5 genie is out of the bottle, it is hard to put it back.8 There is also convincing evidence that hormonal Pharmaceutical production is usually an extremely drug residues are leading to the feminisation of wasteful and resource-intensive process. Experts some species, notably freshwater and marine fish9, calculate that the amount of waste generated per and rendering frogs sterile.10 Finally, the presence kilogramme of active ingredient can range from of antibiotic residues in the environment are also 200 to 30,000 kilogrammes. The manufacturing linked to adverse impacts on human and animal wastes include fermentation by-products, solvents, health in the form of rising antimicrobial resistance. pharmacologically-active reagents such as anti- coagulants and chemotherapeutic agents, cleaning II. The environmental impact of agents and disinfectants.6 antimicrobials

While studies to date have focused on drug residues Antimicrobials influence the environment in which have reached the environment through different ways. They can disrupt wastewater Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

treatment processes and adversely affect ‘antibiotic resistance’ specifically refers to the unhygienic food handling all contribute further to the in farming, this poses a significant threat to human ecosystems because they are toxic to beneficial resistance to antibiotics that occurs in common spread of drug-resistant infections.18 health, and has prompted the WHO to recommend bacteria; some antimicrobials bioaccumulate, bacteria which cause infections.13 the ring-fencing of important categories of and can persist in the environment for extended III. Key levers of AMR antibiotics for human consumption alone.27 periods of time; and finally, they can exert selective The gut of human beings or animals being treated pressure on bacteria, which results in drug with antibiotics is likely to be the most important The first ‘State of the World’s Antibiotics’ report resistance.11 reservoir for the development of resistance.14 published by the Washington-based Center for A key reason for the rampant growth in the use of However, bacteria present in the environment can Disease Dynamics, Economics and Policy (CDDEP) antibiotics is their low cost, particularly in the case Growing resistance to antimicrobial medicines also develop resistance factors which, through the in 2015 recorded a 30 per cent increase in total of generics. Even then, the cost of purchasing APIs (antimicrobial resistance, or AMR) is viewed by transfer of genetic elements to human pathogens, human antibiotic consumption between 2000 and in bulk is usually only a small fraction of what the experts as one of the major emerging threats can render antibiotic treatment “useless.” 15 Studies 2010, from approximately 50 billion to 70 billion consumer pays for the finished drug. According to a to human health. The EAHC report notes that: have shown that industrial wastewater containing standard units.22 Human consumption is set to rise 2009 study, for a common antibiotic, ciprofloxacin, “Without any doubt, the development of AMR antibiotics can “select” for resistant strains of over the coming decades as the population increases the cost of buying the API accounts for less than is by far the largest risk for humans of having bacteria in the environment.16 and citizens in emerging countries become more 1.5% of the sales price of the final product in medicinal products residues in the environment”12 prosperous. Sweden.28 This suggests that companies which (italics added). Like other drugs, antimicrobials Resistance is a naturally occurring phenomenon.17 only manufacture the API and have no involvement enter the environment as a result of excretion However, the mass consumption of man-made Antibiotic use for animal rearing is also high, in marketing the final product have relatively following human and animal consumption and in antibiotic drugs since the middle of the 20th century, as and expected to increase rapidly in the coming low profit margins. Indeed, low profitability is 8 9 manufacturing effluent. well as their extensive use in industrial animal rearing, years. Over 70 per cent of the antibiotics deemed the excuse proffered by some companies for has led to higher levels of resistance, resulting in the medically important by the U.S. Food and Drug not installing equipment to effectively treat Antimicrobial resistance is a broad term which emergence of virulent strains of drug resistant bacteria Administration (FDA) are used in the country’s manufacturing effluent at their plants. However, refers to the resistance of a range of micro- with the ability to survive even the most powerful livestock sector, while the figure in most other as shall be explored in sections 2 and 3, this is a organisms (bacteria, viruses, parasites, fungi) to antibiotics (known as antibiotics of last resort). Poor countries is above 50 per cent.23 What is more, the disingenuous argument, particularly in the case of treatment with anti-infective drugs. The term infection control, inadequate sanitary conditions and current consumption level is projected to rise by large vertically integrated companies which also two-thirds by 2030.24 In China alone, which already market the finished dose products, and there is consumes a vast share of the world’s antibiotics, ample evidence that bulk drugC manufacturers are The World Health Organisation’s 2014 report on global surveillance of antimicrobial resistance present consumption is expected to double by turning a handsome profit from the manufacture of revealed that “antibiotic resistance is no longer a prediction for the future; it is happening 2030.25 antibiotic APIs in India. Indeed, the pharmaceutical right now, across the world, and is putting at risk the ability to treat common infections in the industry is today one of the most profitable community and hospitals.”19 The WHO and other eminent global heath experts warn that we There are three main reasons antibiotics are industries in India, with drug company executives are at the dawn of a ‘post-antibiotic era’, which will result in millions of fatalities every year. administered to animals: first, to cure sickness; making up more than one-fifth of its 100 richest The UK’s Independent Review on AMR projects a death toll of 10 million people per annum by secondly as a way of preventing sickness from billionaires, and the founder of Sun Pharmaceutical 2050 if resistance is left unchecked, with a cost of up to $100 trillion. This is a conservative occurring in the first place (this use is known as Industries the country’s second-richest person29 estimate, which only takes into account part of the impact of AMR. 20 ‘prophylaxis’ and is common in industrial farming, where livestock are often housed in unhygienic Nevertheless, it would appear that low profit Examples of common multi-drug resistant bacteria include: conditions); and thirdly as growth promoters in margins do remove an important financial incentive - Methicillin-resistant Staphylococcus aureus (MRSA) order to reduce the time it takes to rear animals and for the industry to develop new antibiotics. A - Clostridium difficile to secure a higher price when they are brought to considerable amount of work is therefore being - Vancomycin-resistant enterococci (VRE) market.B undertaken to understand how alternative - Extended-spectrum beta-lactamase (ESBL)-producing Enterobacteriaceae (examples economic models might effectively ‘decouple’ the of common Enterobacteriaceae are E. coli and Klebsiella pneumoniae)21 Half of the antibiotics used in livestock are in the administration of antibiotics from the perverse - Multidrug-resistant Neisseria gonnorhoeae same drug categories used in human medicine.26 In financial incentives which are currently resulting in light of the vast quantities of antibiotics consumed their over-consumption.30

B. The use of antibiotics to promote growth has been banned in the European Union since 2006, but in practice there are plenty of loopholes in current legislation enabling unscrupulous farmers to continue administering them for this purpose.“bulk drug.” C. The U.S. International Trade Commission defines bulk drugs as “the active chemical substances in powder form, the main ingredient in pharmaceuticals - chemicals having therapeutic value, used for the production of pharmaceutical formulations.” Major bulk drugs include antibiotics, sulpha drugs, vitamins, steroids, and analgesics (U.S. ITC, 2007) Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India Apparent effluent pollution of large lake by Bollaram industrial area

As shall be explored at length in this report, people which “make India a perfect system for the spread living in the vicinity of dirty pharmaceutical of antibiotic resistance,” according to David manufacturing sites, who are often poor and reliant Livermore, professor of medical microbiology at on subsistence farming, are those whose health is the UK’s University of East Anglia.33 Another major at most immediate risk from the toxic effluents and problem which has emerged in recent years is the API-laden waste being deposited in their rivers, aggressive marketing in India of ‘combination lakes, groundwater and fields. However, because drugs’, including powerful cocktails of antibiotics, of the way in which antibiotic manufacturing by foreign pharma majors such as U.S.-based discharges trigger resistance in bacteria present in Abbott Laboratories without the approval of either the environment, spreading to human pathogens the Indian central government or other health which then travel the world, antibiotic pollution authorities around the world.34 puts everyone at risk, wherever they live. This is why AMR is often compared to climate change, Rising resistance is taking a devastating toll on the given the scale of the challenge it poses, and the Indian population, particularly the most vulnerable coordinated global response which is required to members of society. The State of the World’s tackle it. Antibiotics report noted that 58,000 newborn babies in India died in 2013 as a result of drug- resistant infections, while Indian drug resistance 10 11 IV. Occurrence of AMR in India rates for several major pathogens is on the increase. The authors of the report found that 10 per cent The discovery of a new type of antibiotic resistance of E. coli isolates were resistant to carbapenems gene in a Klebisella pneumoniae isolateD in a in 2008, increasing to 13 per cent in 2013. For Swedish patient returning from a trip to New Kebsiella pneumoniae, 29 per cent were resistant in Delhi in 2008 set alarm bells ringing within the 2008, increasing to 57 per cent in 2014.35 international medical community. The gene, named New Delhi metallo-beta-lactamase 1 (NDM-1) Antibiotic resistance is also affecting Indian was found to render bacteria carrying it resistant livestock. The CDDEP notes that 100 per cent to most antibiotics except polymixins, a group of resistance to sulfadiazine was detected in chickens highly potent drugs whose toxic side effects mean and other fowl, and resistance to amikacin, that they are reserved for treatment of only the carbenicillin, erythromycin, and penicillin was also most serious infections. Since its discovery in 2008, widespread. Resistance has also been reported NDM-1 genes have been identified in more than 70 in Staphylococcus and other bacteria in poultry countries dotted around the world, highlighting how litter: 75 per cent of isolates were resistant to quickly resistance spreads once it emerges.31 streptomycin, and more than 50 per cent were resistant to erythromycin, tobramycin, and It is not surprising that the NDM-1 gene first ampicillin.”36 surfaced in India. The country suffers from high and constantly rising rates of antibiotic resistance and in fact since the discovery of NDM-1, a new and potentially more dangerous variant, NDM-4, has been identified in sewage in a hospital in northern India.32. Several factors come into play, not least, an appalling lack of basic sewage treatment and the widespread over-prescription of antibiotics,

D. In microbiology, the term “isolate” is used to describe a population of microorganisms or viruses that has been isolated. Impacts of pharmaceutical pollution on communities and environment in India India is one of the world’s leading suppliers of generic Impacts of pharmaceutical pollution on communities and environment in India India’s pharmaceutical industry: drugs, with generic drug revenues of US$15 billion in 2014. A geographically diverse, Over half of India’s pharmaceutical exports are to highly export-oriented sector with regulated markets such as the U.S. and the EU. Anti-infectives, which include antibiotics, antivirals and antifungals, are the largest segment on the domestic market, PART 2 - The Indian Pharmaceutical Industry strong growth prospects accounting for one-quarter of total turnover.

Himachal Pradesh Multinational drug companies have flocked to Hyderabad, Visakhapatnam, and other manufacturing hubs since India opened its economy to overseas players in the mid-2000s. Some Punjab of the larger Indian firms are also competing at the global level. I. The expansion of the Indian bulk generics,47 which is considerably higher than its drug industry share the overall pharmaceuticals market (which India’s Environment Ministry classifies pharmaceutical 48 manufacturing as a “red category” activity owing to the stands at approximately 2%). India’s Bulk Drugs hazardous waste it produces. The pharmaceutical industry is one of the fastest Manufacturers Association describes the sector’s growing segments of the Indian economy37 and has recent growth as “phenomenal” and “one of the experienced rapid and sustained expansion since highest among the developing countries.”49 Anti- the second half of the 20th Century.38 A 2010 report infectives, which include antibiotics, antivirals by McKinsey and Company predicted high growth and antifungals, are the largest segment on the rates in the sector, with turnover increasing from domestic market, accounting for around one- $12.6 billion in 200939 to a projected $55 billion quarter of total turnover.50 by 2020, with the potential to reach $70 billion in an “aggressive” growth scenario.”40 Even under a Indian pharmaceutical manufacturing Gujarat Madhya Pradesh West Bengal “pessimistic” scenario characterised by regulatory companies are present at each stage of the controls and economic slowdown, McKinsey production process: APIs; pharmaceutical expected the market to reach $35 billion by 2020. formulation intermediates (PFIs); and finished The India Equity Brand Foundation (IBEF), a body dose products (FDPs, the end product). PFIs are In 2009, a report by India’s Central Pollution set up by the country’s Ministry of Commerce and the intermediate product between an API and a Control Board identified Visakhapatnam as Maharashtra being the most polluted industrial area in the Industry, estimates that industry revenues will finished dose. An API is the base ingredient of 12 Visakhapatnam 13 Telangana state of Andhra Pradesh. Undeterred, the expand at a rate of 12% per annum between 2012- medicine that is biologically active, and the term Bulk Drug Manufacturers Association recently called on the government of Andhra 20 to reach $45 billion, outperforming its global bulk active (or bulk drugs/ingredients) is also Hyderabad Pradesh to allot between 6,000 and 10,000 competitors by a wide margin to hit $100 billion by used. Some Indian companies specialise in one or acres for the establishment of two 41 pharmaceutical parks along the coast of 2025. two of these three stages, while large vertically Andhra Pradesh, in the vicinity of integrated firms such as Dr Reddy’s and Ranbaxy Visakhapatnam. Karnataka Up until the 1970s, the majority of India’s medicines cover all the stages. Andhra Pradesh were supplied by international corporations, with the domestic, mainly state-owned, industry India imports around $3.5 billion worth of APIs Telangana has proposed to set up India's 51 largest integrated pharmaceutical city producing cheap bulk drugs with the support of the every year, mostly from China. These APIs, spread over 11,000 acres near Hyderabad, WHO.42 manufactured at very low cost in China52, are complete with effluent treatment plants and processed by Indian companies and many are a township for employees, in a bid to attract Tamil Nadu investment of Rs 30,000 crore ($4.5 billion) From the 1970s onwards, changes to the country’s then sold on to foreign markets as ‘finished dose in phases. patent laws to make medicines affordable to the products’ (FDPs). India is a major supplier to the poor,43 combined with the growth in contract U.S.E, Europe and other developed economies, not Hyderabad, which is known as the bulk drug manufacturing and outsourcing by multinational to mention Africa and other countries in Asia. This capital of India, accounts for nearly a fifth of companies (MNCs) to low-cost Indian suppliers led means that a substantial share of Chinese-origin India's pharmaceutical exports, netting revenues of $15 billion in 2014. The to the rapid development of India’s generic drugs APIs end up in products sold on the global market. Patancheru-Bollaram manufacturing hub on sector, often described as the “backbone” of the the outskirts of Hyderabad is one of the most 44 polluted industrial areas in India. The bulk country’s pharmaceutical industry. Industry representatives and government officials drug manufacturing industry is one of the in India have expressed concern at the country’s The pharmaceutical industry is one of the fastest growing segments of the main polluters in the cluster. Indian economy and has experienced rapid and sustained expansion since the over-reliance on API imports from China, which they second half of the 20TH Century. The market is expected to grow to $100 billion Today, India is one of the world’s leading suppliers see as undermining the domestic industry. They by 2025. of generic drugs, which account for approximately also point to India’s lack of a physical inspection The sector is geographically fragmented, located in various clusters around India, including 75 per cent of its market by volume45 and revenues mechanism to monitor Chinese sites for supplies Hyderabad in the southern state of Telangana, Andhra Pradesh, Himachal Pradesh, of $15 billion in 2014.46 The country is responsible into India, with approvals from the regulatory Maharashtra, Gujarat, Madhya Pradesh, West Bengal, Tamil Nadu, Karnataka and Punjab. Hyderabad is considered to be the bulk drugs capital of the country. Overwhelmed by the for around one-fifth of the world’s production of agency simply based on “written declarations on manufacturing might of China, which is flooding the Indian market with pharmaceutical APIs, The states identified on this map all contain major pharmaceutical manufacturing hubs. Given a new drive to boost India’s bulk drug industry was announced in 2015, with a high-level E. According to a report submitted to the U.S. Congress in late 2014, Indian customs data show that China’s share of India’s organic chemical committee recommending the establishment of large manufacturing zones or "mega parks" the prevalence of the industry across India, it is imports and the U.S. share of India’s drug exports have both risen over the past decade (see: China Economic and Security Review across the country. not an exhaustive representation. Commission, November 2014 Report to Congress). Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

a form.”53 Because of the export-oriented nature pharmaceutical supply chains in light of the environment and the health of local inhabitants, In November 2015, drug makers in Telangana and of the Indian drug industry, this implies that a difficulty involved in establishing links between which have suffered severe and sustained negative Andhra Pradesh dominated a list issued by India’s majority of medicines available on the U.S. and companies, and the fact that polluting factories impacts as a result of the pharmaceutical industry’s Central Pollution Control Board (CPCB) revealing European market contain APIs from factories in in the developing world seem to be acting in unbridled expansion in Telangana and Andhra the names of companies which had not responded to China and India where manufacturing conditions impunity.56 Pradesh. directions regarding the installation of continuous are substandard. This issue was explored in a 2015 online pollution monitoring devices at their sites. In report by the NGO SumOfUs which highlighted a II. The emergence of Hyderabad and Hyderabad, which is known as the “bulk drug total, 59 companies from Telangana (45 located in number of pollution scandals at pharmaceutical Visakhaptanam as poles of bulk drug capital” of India, accounts for nearly one-fifth Hyderabad’s Medak District), and 13 from Andhra manufacturing plants in China.54 Antibiotic APIs are manufacturing of India’s pharmaceutical exports.64 The city’s Pradesh (6 located in Visakhapatnam) failed to among the products for which India is dependent Patancheru-Bollaram cluster, which is part of the comply with the CPCB’s request, an ‘oversight’ on Chinese imports.55 Nonetheless, the country The Indian pharmaceutical industry is highly Medak District, is home to a variety of industries65 which the CPCB stated would result in the plant in retains a sizeable share of antibiotic manufacturing fragmented, with more than 20,000 registered including over one hundred drug manufacturing question being shut down. 70 Two of the Telangana and processing in locations dotted across the manufacturing units nationwide.57 It is also units. It is the source of severe water pollution, and plants belong to SMS Pharmaceuticals, a company country. The southern Indian states of Telangana geographically dispersed: production takes place has on two separate occasions (in 2010 and 2013) which in 2012 was issued with a closure order and Andhra Pradesh are a major hub for bulk drug in multiple locations across the country, with the been subject to a ban on further expansion by the by the Andhra Pradesh Pollution Control Board manufacturing, which comprises a significant share states of Maharashtra, Gujarat, Telangana, Andhra Indian Ministry of Environment and Forests (MoEF) (APPCB) in the interest of protecting public health of antibiotic production and processing. Pradesh, West Bengal and Tamil Nadu all registering owing to its status as a ‘critically polluted’ area.66 and the environment, and on the grounds that it was a sizeable manufacturing and processing presence.58 violating the orders of the Supreme Court of India.71 14 15 The lack of transparency in pharmaceutical supply The city of Hyderabad in Telangana state, which was Several studies, including a detailed survey by chains makes it almost impossible to map the part of Andhra Pradesh until its division into two Greenpeace in 200467 have highlighted the many Despite local outrage at pharmaceutical journey of a pharmaceutical product from factory to separate states in 2014,59 emerged early on as a ways in which people, animals, crops and land manufacturers’ persistent disregard for basic pharmacy shelf. Measuring a drug’s environmental pole of bulk drug manufacturing. in the Medak District and other industrial zones environmental standards in Hyderabad and impact is particularly challenging where various surrounding Hyderabad have been afflicted by the Visakhapatnam, the official response has been stages of production are outsourced to suppliers In 1961, Indian Drugs and Pharmaceuticals Limited pollution, the severity of which prompted veteran inconsistent and hopelessly ineffective, suggesting in under- or poorly regulated markets. U.S. and EU (IDPL), a government-owned company, was set campaigner, Allani Kishan Rao, president of the that powerful forces within the state and national regulations in the shape of the Good Manufacturing up under the premiership of Jawaharlal Nehru Patancheru Anti-Pollution Committee to call it a governments are more concerned with protecting Practice framework (GMP) focus on drug safety but with a mandate to “free India from dependence ‘Hell on Earth.’68 drug manufacturers’ profits than the welfare of do not currently oblige companies to put in place on imports and to provide medicines to the their citizens. Indeed, if recent announcements are environmental safeguards when producing their millions at affordable prices.”60 Its establishment In recent years, Visakhaptanam, on the coast anything to go by, the leaderships of Telangana drugs, as is explained further below. Facilities in in Hyderabad (it also has offices in New Delhi of Andhra Pradesh has emerged as a rival to and Andhra Pradesh are intent on expanding India and China that export to Western markets are and Rishikesh, Uttarakhand state) heralded the Hyderabad’s dominance of the bulk drug industry drug production in their states, with complete hence regularly inspected, but these inspections emergence and subsequent concentration of the in the region. While its pharmaceutical industry indifference to the decades-long pollution crisis. are not allowed to sanction a factory for polluting generic drug industry in the city.61 A number of is less developed compared to Hyderabad’s, the practices, lack of waste water treatment or any IDPL employees subsequently established their own Andhra Pradesh state government has big plans for Multinational pharmaceutical companies – many other environmental problems – the verification of companies, which now rank among India’s leading the future and evidence gathered for this report of them headquartered in the U.S. and European these depends exclusively on local governments. pharmaceutical firms, including the founder of Dr clearly shows that waste from existing plants has Union – have flocked to Hyderabad, Visakhapatnam, Reddy’s, one of India’s largest drug companies.62 already taken a significant toll on local villages and and other pharmaceutical manufacturing hubs The SumOfUs report shed some light over the fish stocks. Indeed, in 2009, a report by India’s since India moved to open its economy to overseas antibiotics supply chain, exploring the relationship Indira Gandhi, who represented the outlying Medak Central Pollution Control Board (CPCB) containing players, partly by making its patent regime more between polluting API factories in China and District constituency as a Member of Parliament the Comprehensive Environment Pollution Index amenable to foreign firms in the mid-2000s72 and processing plants in India, which between them in the 1980s was a keen proponent of the area’s (CEPI) identified Visakhapatnam as being the most by allowing 100% inward foreign direct investment supply the majority of antibiotics (around 80 industrialisation.63 Over the following years, the polluted industrial area in the state of Andhra (FDI). It is estimated that foreign multinationals per cent) sold by multinational pharmaceutical bulk drug industry grew from strength to strength Pradesh, closely followed by the Patancheru- will hold 35% of Indian pharmaceutical market companies on the global market. However, the from its stronghold on the outskirts of Hyderabad. Bollaram cluster.69 share by 2017, compared with 28% in 2009.73 report also called for greater transparency in Unfortunately, the same cannot be said for the Abbott Laboratories, Pfizer and GlaxoSmithKline Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

are identified as key international players in India.74 on contract production for Western drug companies highly regulated markets such as the U.S. and the medical products investigator in New Delhi.92 They, along with other foreign majors including or have entered into research and development EU.87 In order to export to the regulated markets, Mylan, Sanofi, Daiichi Sankyo, Merck and Co., and agreements, mergers and acquisitions, and other Indian manufacturers must prove that they are Antibiotics make up a sizeable share of India’s drug Bristol Myers-Squibb have flooded the country with alliances with foreign partners.80 compliant with Good Manufacturing Practices (GMP), exports. According to UN Comtrade data the U.S. billions of dollars-worth of FDI in recent years and which define the minimum standard that a medicines imported $37 million worth of antibiotics from sealed alliances with large Indian manufacturers A common route used by Indian pharmaceutical manufacturer must meet in its production processes. India in 2014 and the UK imported $43.8 million.93 including Dr. Reddy’s, Aurobindo and Ranbaxy to manufacturers to capture the generic market is Compliance is monitored and periodic inspections Under the trade partner ‘World’, antibiotic trade name just a few. Conversely, a number of the larger to invent a new delivery system for an existing are carried out by various national, regional, and value for India is $858,827,114 – with a total net Indian firms such as Dr Reddy’s and Aurobindo, drug. One frequently cited example of this is international authorities, including the U.S. FDA, weight of 11,041,080 kg.94 have made forays into foreign markets and are now the agreement between Indian manufacturer the EU and its Member States, and the WHO. Under competing at the global level.75 Ranbaxy Laboratories and German pharmaceutical GMP, products must be of consistent high quality; India’s top ten pharmaceutical exporters: giant Bayer on ciprofloxacin, a wide-spectrum appropriate to their intended use; and meet the 1. Dr Reddys Laboratories Ltd III. An export-oriented industry with antibiotic belonging to the fluoroquinolone group requirements of the marketing authorisation (MA) 2. Lupin Ltd global ambitions of antibioticsF used as a first-line defence against or product specification.88 GMP violations and 3. Mylan Laboratories Ltd anthrax. product bans are a common occurrence in India’s 4. Aurobindo Pharma Ltd The pharmaceutical industry only became truly pharmaceutical manufacturing sector. In the second 5. Cipla Ltd globalised after the establishment of the WTO in In 1999, Ranbaxy and Bayer signed a 20-year half of 2015 alone, Indian pharma firms including Dr. 6. Hetero Drugs Ltd 1995 and the implementation of the Agreement agreement for the development and marketing of Reddy’s, Sun Pharma, Zydus Cadila, Wockhardt Ltd 7. Sun Pharmaceutical Industries 16 17 on Trade Related Aspects of Intellectual Property the Indian company’s oral variant of ciprofloxacin, and IPCA Lab were all issued with warning letters by 8. Glenmark Generics Ltd Rights (TRIPs).76 In the following years, rapid re- the original version of which was discovered by the US FDA89 and the EU introduced a ban on 700 9. Ranbaxy Laboratories organisation of the industry took place, covering Bayer.81 The Ranbaxy formulation had proved to generic drugs supplied by Indian companies.90 10. Serum Institute Ltd95 three different product types: “branded products be much more effective than the original, and with patent protection, where the innovator has recognizing the potential benefit of the product, There are currently no GMP provisions regulating In post-Independence India, the pharmaceutical a monopoly on the product during the patent Bayer entered into a licensing agreement with environmental emissions from the production of industry was viewed as a ‘sun rise industry’ with period; quality generics (off-patent products with Ranbaxy to market the product worldwide against medicinal products, which means that authorities the potential to provide skilled jobs as well as international approvals, which may be sold under a payment of $65 million.82 Under the terms of in the regulated markets have no formal power to technology transfer and the ability to generate a brand but where equivalent products of the same the deal, Ranbaxy received exclusive marketing police the environmental impact of pharmaceutical foreign exchange.96 However, several decades quality are available); and low-value generics (off- rights for the product in India and CIS countries manufacturing outsourced to countries such as China on, many Indian commentators are critical of the patent products sold mainly in developing country while Bayer kept the rights in the U.S., Europe and and India. industry’s track record on several fronts. markets, where price is the determining factor Japan.83 Ranbaxy subsequently gained worldwide setting the entry barriers for market access)”.77 notoriety when it was fined $500 million by the U.S. India exported over $15 billion worth of drugs in Critics have described how the costs of the rapid With no new classes of antibiotics discovered since authorities for falsifying data and allowing serious the financial year 2014-15, with Europe accounting expansion of India’s pharmaceutical sector have the 1980s, most antibiotics manufacturing falls in manufacturing deficiencies to occur at its facilities for 20 per cent of this (around $3 billion). Of this, been ignored and view the development of India’s the second and third group. in India.84 formulations of generic drugs constituted about manufacturing capacity as mainly providing an $1 billion and APIs formed $2 billion, according opportunity for Western economies to move away Following the amendment of the country’s Since the expiry of Bayer’s original patent on to industry data.91 The United States are also a key from dirty goods manufacturing by exporting it to intellectual property laws to bring them in line ciprofloxacin in 2004, numerous approvals have market for the Indian pharmaceutical industry. A India.97 This has generated “significant costs for with the TRIPs agreement in the 1990s, Indian been given for the development of generic versions 2014 report to the U.S. Congress describes how: local populations in terms of loss of assets, health, pharmaceutical manufacturers were no longer of the drug to companies including the Indian “India is now the preeminent supplier of generic natural resources and quality of the environment.”98 allowed to manufacture and market reverse- subsidiary of U.S. giant Mylan, Germany’s Sandoz drugs, serving as an export platform for U.S.-based engineered versions of drugs patented by foreign (the generics arm of Switzerland’s Novartis), Israel’s multinationals, as well as Indian competitors.” To companies.78 This made it considerably more Teva Pharmaceuticals, and Indian giants Lupin Ltd.85 regulate Indian drug exports to the United States difficult for Indian companies to copycat new drugs and Dr Reddy’s Laboratories.86 more effectively, the FDA has established offices in and make “new” generics.79 In light of this, many New Delhi and Mumbai, and stationed one full-time of the country’s leading manufacturers now focus Over half of India’s pharmaceutical exports are to

F. Fluoroquinolones are powerful antibiotics used to treat a wide range of infections. Their use has been associated with serious side-effects and health experts therefore recommend that they should be used as antibiotics of ‘last resort’, i.e. for only the most serious illnesses. Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

PART 3 - Pollution in Hyderabad and Visakhapatnam

I. A long history of pollution Pollution (CAP) launched the Patancheru Anti An oft-cited but apparently unpublished report by the World Health Organisation puts the Pollution Committee. The following year, nearly volume of spurious drugs originating from India at 35% of the global market99 and a European India’s Environment Ministry classifies 2,000 people marched 40km from Patancheru to Commission report from 2006 showed that India was the leading source of counterfeit drugs pharmaceutical manufacturing as a “red category” the Andhra Pradesh State Assembly and presented exported to the EU. The Commission noted that the increase in counterfeit drugs from India activity owing to the hazardous waste it produces. a list of demands to then Chief Minster N. T. Rama “reflects the developing industrial capacity of this nation and highlights the reality that Successive studies have shown that air, water Rao. These included the construction of an effluent counterfeiting is carried out on an industrial scale, in all sectors where a potential profit is and soil in Telangana and Andhra Pradesh are treatment plant for each industrial unit, adequate perceived.” 100 Concerns regarding the quality of Indian pharmaceutical products remain significantly contaminated by toxic chemicals and compensation for degraded agricultural land a source of tension between India and the EU. A recent low point was India’s decision to heavy metals such as copper, lead, mercury and and the supply of safe drinking water to affected suspend talks on a planned bilateral freed trade agreement following an EU ban on 700 Indian arsenic. One 2001 article recommended that “Most villages.”105 pharmaceutical products in August 2015.101 of the soils should be removed from agricultural production” 102 in Patancheru, the industrial Unfortunately, 30 years on from that march, there is area on the outskirts of Hyderabad described at little proof that the effluent treatment plants which length in the following pages. More recently, have since been built are adequate for the task in the environmental and health impacts related to hand, with evidence showing that they are unable to antibiotic production have also emerged as an handle the large volumes of waste being generated issue of growing concern, against the backdrop of by the bulk drug manufacturing industry. rising mortality caused by growing antimicrobial 18 19 resistance across India and around the world. A further problem is the way in which monitoring of pollution from pharmaceutical manufacturing The social and environmental costs of the is undertaken. Private, so-called independent development of Hyderabad’s bulk drug industry laboratories are paid by the industry to carry out are plain to see in the neighbourhoods and villages Environmental Impact Assessments (EIA) of the surrounding the industrial areas, and have been pharmaceutical plants and give them a clean bill well-documented over a period of decades. of health, providing certificates that say plants are However, the response from both the central well within the standards despite potential issues. government and the state authorities has been This evidence is then considered expert testimony woefully inadequate, not to say complicit, and in court whenever the waste management standards over the years, irresponsible drug manufacturers are called into question. Hyderabad University have enjoyed free rein to continue pumping vast academic Vijay Gudavarthy, an authority on quantities of untreated or inadequately treated Hyderabad’s bulk drug industry notes that this is pharmaceutical waste into the environment. similar to the relationship between ratings agencies Inhabitants living and working in the vicinity of drug and banks in the lead up to the 2007-08 financial manufacturing units in Hyderabad, Visakhapatnam, crash. Because the private labs and rating agencies and other locations have borne the brunt of are paid by the industry they are meant to regulate this. It has affected their livelihoods in the form to carry out the tests, they have a disincentive to of livestock deaths and decreased agricultural give negative reports because after a while they will yields,103 and damaged their health, with reported no longer be asked to carry out the audits.106 impacts ranging from higher abortion rates to birth defects and stunted growth in children, as well as Organisations charged with monitoring pollution greater incidence of skin diseases.104 have absolutely no teeth and in some cases are in league with the industry they are supposed Campaigners in Telangana and Andhra Pradesh have to be monitoring. Even when the authorities do been fighting against pharmaceutical pollution for intervene, the cases reach the Supreme Court only decades, to little avail. In 1986, Citizens Against to be watered down at the critical stage and the Close-up of the water flowing into Isnapur Lake, Pashamylaram Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

necessary action is not taken. According to Rishabh pay compensation to impacted communities but the July 2011: Moratorium lifted on the basis of pollution control measures proposed by the state Khanna at Envirohealth Matters, cases against the compensation was never released. More recently, pollution control boards. pharmaceutical industry have been in the courts farmers represented by a local NGO have taken a 2012: NGO Citizens Forum for Better Patancheru Constituency makes submission to Andhra Pradesh since at least the 1980s. This led to an agreement case to India’s Green TribunalG and the case is still High Court highlighting the plight of villagers in Kazipally, Sultanpur and 15 surrounding villages on in 1997 that the government and industry would being heard at the time of writing.107 the banks of the Nakka Vagu River as a result of pollution from bulk drug manufacturing industry. July 2012: Andhra Pradesh Pollution Control Board orders closure of 12 pharmaceutical manufacturing units in Hyderabad in the interest of protecting public health and the environment on HYDERABAD - A LONG SAGA OF POLLUTION, MANUFACTURING the grounds that they violated pollution norms. The affected units are: BANS, AND LEGAL ACTION WITH NO END IN SIGHT 1961: Establishment of Indian Drugs and Pharmaceuticals Limited (IDPL), a government-owned - 2 facilities of Aurobindo Pharma company with a mandate to “free India from dependence on imports and to provide medicines to - 4 facilities of Hetero Labs the millions at affordable prices.” - 1 Cirex Pharmaceuticals 1973: Formation of Andhra Pradesh Industrial Infrastructure Corporation (APIIC). Patancheru - 1 Covalent Laboratories 108 begins to grow into a “mega industrial estate.” - 1 Divis Pharmaceuticals 1975-1995: APIIC creates 6 industrial estates in ‘backward regions’ around a thirty-mile radius - 1 Sri Krishna Pharmaceuticals 109 of Hyderabad, the largest of which is the 440-hectare estate in Patancheru. - 1 Innogent Laboratories 20 1987: Indian High Court orders 20 industries to stop releasing their effluents into the Nakkavagu - 1 SMS Pharma. 21 River and directs the Andhra Pradesh Pollution Control Board (APPCB) to report to the court on the nature and degree of pollution in the Patancheru area.110 5 companies in Visakhapatnam, including Mylan, are also asked to suspend operations by the Vizag 1990: Submission of a public interest litigation (PIL) by the Indian Council for Enviro-Legal District Adminsitration.113 Action before India’s Supreme Court against pharmaceutical producers and common effluent September 2013: Moratorium on industrial expansion in Patancheru-Bollaram cluster re-imposed treatment plant management in Patancheru and Bollaram for pollution of groundwater and in light of Central Pollution Control Board (CPCB) survey showing high pollution levels at 8 industrial surface water caused by manufacturing effluent.111 clusters. Indian government notes: “The CEPI [pollution] scores indicate (for the eight clusters) 1994: Establishment of a common effluent treatment plant (CETP) in Patancheru. that even after a period of two-and-a-half years of implementation of action plans, there is no 1996: APPCB imposes ban on establishing new industries generating high water improvement in the environmental quality.” pollution. Ban extends to 4 districts (Mahabubnagar, Nalgonda, Rangareddy and Medak) 2013: Citizens Forum for Better Patancheru Constituency files complaint regarding bulk drug surrounding Hyderabad city.112 manufacturers in Patancheru-Bollaram before the National Green Tribunal (NGT) in Chennai. 1997: Supreme Court bans the establishment or expansion of bulk drug manufacturing units in 11 November 2013: National Green Tribunal “orders notice” to Andhra Pradesh Government on Patancheru-Bollaram estate and asks the industries to implement zero liquid discharge (ZLD), Citizens Forum complaint. which means they have to treat the wastewater and reuse it. July 2014: Moratorium on industrial expansion at Patancheru-Bollaram and other clusters is 2000: Several Hyderabad-based NGOs initiate litigation against polluting industries. effectively lifted following election of Narendra Modi as Prime Minister and reformulation of pollution 2007: Swedish study raises awareness of impacts of pharmaceutical pollution in Patancheru- index. Bollaram cluster, with a focus on its contribution to antibiotic resistance in bacteria. November 2015: CSE analysis of Telangana State Pollution Control Board (TSPCB) inspection reports 2008: Amberpet Sewage Treatment Plant is inaugurated. The STP receives effluent from the pertaining to 15 Bulk Drug Manufacturers operating in Patancheru-Bollaram cluster shows most Patancheru-Bollaram CETP through an 18km pipeline. companies producing ingredients for which they do not have permission, using more water than the January 2010: India’s Ministry of Environment and Forests (MoEF) imposes moratorium on permitted limit and dumping more effluents and hazardous waste than allowed. setting up new industries or expanding existing ones in 8 “critically polluted areas” in India, January 2016: On-the-ground investigation in Hyderabad and Visakhapatnam for the purposes of the including the Patancheru-Bollaram cluster. current report confirms that pharmaceutical pollution is still rife in these areas.

G. India’s National Green Tribunal was set up in 2010 and is dedicated to “the effective and expeditious disposal of cases relating to the subject of forest, environment, biodiversity, air and water.” It has wide jurisdiction to deal not only with violations of environmental laws, but also to provide compensation, relief and restoration of the environment in accordance with the ‘Polluter Pays’ principle, as well as powers to enforce the precautionary principle (see: WWF India, Green Tribunal, http://www.wwfindia.org/about_wwf/enablers/cel/national_green_ tribunal/) Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

II. The investigation As anticipated from the outset, we have found the extreme lack of transparency regarding supplier- This part of the report presents key findings of in- buyer relationships to be a significant stumbling depth documentary analysis and an on-the-ground block in terms of ascertaining which foreign-based investigation into the environmental and health companies are purchasing drugs from the polluting impacts of bulk drug manufacturing undertaken factories identified below. Where we have firm in early 2016 in Hyderabad, Telangana state, and indications as to the identity of overseas buyers Visakhaptnam, located some 600km away on which may be outsourcing production to sites in the coast of Andhra Pradesh. Its objective was to Hyderabad and Visakhapatnam, we include these in ascertain the true extent of pollution in the region, the narrative. However, it is obvious that important following detailed background research in late pieces of the puzzle are still missing. Nonetheless, 2015. As the following will make clear, the situation it is clearly the case that because of the key role on the ground is critical. The effluent treatment outsourcing plays in today’s global pharmaceutical systems that were set up to process industrial waste market, as well as the increasing presence of Indian are a signal failure, and there is also systematic companies in ‘developed’ markets, a significant dumping of chemical effluent by pharmaceutical portion of the production from the sites identified factories in rivers, lakes and groundwater. Pollution is highly likely to be ending up on pharmacy shelves impacts are so severe as to be visible to the casual in the United States, Europe, Australia, Canada 22 23 observer not just in the areas immediately adjacent and beyond. Pharmaceutical pollution in India is to the factories and treatment plants, but many very much a global problem. It can be especially kilometres further afield. Rivers channel pollution critical with regard to antimicrobial resistance over long distances, as witnessed in numerous in cases where the effluent also contains large villages along the banks of the Musi River, whose amounts of antibiotics. Within the scope of the inhabitants live miserable lives blighted by ill current report, the investigation team was not able health and poor nutrition. Subsistence farming to test water and soil samples for the presence of and fishing, on which many local people’s survival antibiotic residues. However, there are numerous depends, is on the brink as their animals die and units manufacturing antibiotic APIs in the areas their crops repeatedly fail. described. What is more, recent research by Swedish scientists indicates that antibiotic pollution in the The investigation had several areas of focus: the industrial areas investigated is rife, and existing industrial areas and the pharmaceutical factories effluent treatment systems are not fit for purpose. which operate there; the effluent treatment Our analysis shows several major polluters emerging plants set up to process the waste from these from the pack in Telangana and Andhra Pradesh: areas; and the impact of pollution on villages and Aurobindo, Dr Reddy’s, Hetero Drugs Ltd, and water bodies surrounding the industrial areas. The Mylan Laboratories Ltd (the Indian subsidiary of findings are presented broadly according to these U.S.-based Mylan), which are examined in depth categories. Site visits, face-to-face meetings with below. All are major pharmaceutical companies, officials, academics and medical professionals, as and all have a significant presence in overseas well as interviews with local inhabitants, farmers, markets, either through partnerships with foreign fishermen, and environmental activists paint a multinationals, or in their own right, following picture of an area that is drowning in pollution. acquisitions. Aurobindo’s U.S. client McKesson Finally, the investigation also focused on trying to and the European operations of Actavis which identify links between polluting factories and the Aurobindo acquired in 2014114 have also been global markets to which they supply drugs. identified as key players marketing drugs produced in polluting factories in India on the U.S. and EU Name: Bonthapalle Village Bonthapalle Name: JETL - Jeedimetla Effluent Treatment Limited Description: Village people avoid eating the food they grow here, which is mostly sold Name: Kazipally Village Description: The team filmed tankers entering and elsewhere, and there are many health problems linked to the high pollution levels, Description: The water table has been contaminated with industrial effluent since the leaving the site from the public highway but were forced including miscarriages, cancers, deaths of livestock etc. The village well is contamina- 1980s, a situation greatly exacerbated by the arrival of the pharmaceutical industry. to stop following a confrontation with security guards. ted and unusable, and a bore well has had to be dug a long way from the village as a Villagers can no longer drink from the lake, from their wells or even from the bore well result. Hetero operates a factory here. Fewif any locals are employed at the plant, which was provided for safe drinking water. They have very limited weekly access via tap to a pipeline connected to the municipal water supply. Villagers report many despite assurances that they would be at the time of land purchase. The plant has serious health issues, including miscarriages, skin disorders, cancers and intestinal informers within the village, and villagers who complain are threatened by local police problems. The livestock suffer from the same problems. Most, not to say all, food who are complicit with the plant owners. grown in the village is unfit for human consumption. Name: Hussain Sagar Lake Description: Adjacent to the bottom of the Hussein Sagar Lake, the investigation team observed construction work underway at an intersection where water flowing from the lake joins an open nallah heading towards the Musi River. At this point the flow is joined by Name: Gaddapotharam Industrial Area an underground pipe, the contents of which appear to be Description: A large volume of chemical effluent was observed to be flowing from the chemical effluent, with black tarry sediment. entire industrial area into an open concrete well, about 25 feet deep, filled to the brim with effluent. The overflow is diverted through a side channel which leads off towards the edge of the hill and from there runs in a strong steady flow down an open nallah into the wide valley below. Name: Patancheru-Bollaram Industrial Cluster (PBC) Description: In 2010 the Ministry of Environment and Name: Edulabad Village Forests banned the creation of new industries or the Description: Since the Amberpet STP was opened, expansion of existing ones in the PBC. The ban was villagers have had their livelihoods destroyed and renewed in 2013 after a review showed no improvements experienced major health problems. Fish in the village had been made. In November 2015, an analysis of Name: Bachupally tank regularly die as a result of chemical effluent flowing Telangana State Pollution Control Board inspection Bachupally, Hyderabad, Telangana, India into the water body. The investigation team was told’ in reports by an Indian NGO found that drug manufacturers Description: An Aurobindo plant manufactures front of ‘buffalo’ and ‘and tastes bad’ in the sentence: operating within the PBC were producing pharmaceutical antibiotics here. The site is very highly guarded, with ‘The milk produced by the animals fetches a very low ingredients for which they did not have permission, using two different sets of personnel as well as security price as it smells and tastes bad. Children have eyesight more water than the permitted limit, and dumping more Name: Ramky Hazardous Waste Plant, cameras. Waste water, potentially chemical effluent, problems, old and young people have joint pains and skin effluents and hazardous waste than allowed. Dindigal Secunderabad was observed to be flowing from the plant. diseases, people and animals have frequent diarrhoea. Description: The investigation team observed what appeared to be chemical effluent in standing water pools in open land behind the site, starting only a couple Edulabad village of feet away from the perimeter wall. BANJARA HILLS There was also what looked like a large hill Name: Isnapur Lake inside the site, higher than the top of the Hyderabad Description: The lake receives waste flowing in through perimeter wall, which is understood to be open nallahs from the Patancheru Industrial Area. The additional waste being piled up above chemical effluent forms thick crusts in some places and ground level. There are high levels of chemical reactions can be observed occurring under the security at the plant. surface. The lake bed is thickly coated in a black tarry DILSUKHAGAR sediment which seems to go down to a considerable depth. Name: Patancheru-Amberpet Pipeline Description: The pipeline channels effluent from the Patancheru Common Effluent Treatment Plant to the Amberpet Sewage Treatment Plant and from there Name: Peddagudem Village Name: Uppal neighbourhood into the Musi River. Description: Locals had skin conditions caused by Description: At Uppal the investigation team observed working in the water in their paddy fields. The water high levels of what appeared to be chemical effluent table is totally contaminated and all crops are affected: Name: Chaitanya Nagar Colony being discharged from a stream into an open nallah rice is blackish in colour and spoils very fast. The village Description: Chemical effluent was observed pouring which heads down towards Amberpet Sewage Treatment has to pay to have drinking water delivered by tanker. along an open nallah. The surface of the stream was Plant. This effluent emanates from other industrial areas Tankers are regularly observed coming down from the covered in heaps of thick white froth and there was an at Nacharam and Mallapur, and joins with the waste industrial areas to dump waste illegally straight into the overpowering chemical smell. A small pond had coming from Jedimetla and the Patancheru-Amberpet river. collected adjacent to the main stream, and farmers were Name: Patancheru Common Effluent Treatment pipeline, entering the STP, and ultimately being running plastic hose pipes from this highly contaminated Plant (CETP) discharged into the Musi River. Much of the flow actually water source into adjacent land where they were Description: The Patancheru CETP processes effluent bypasses Amberpet and is discharged directly into the growing guava and other fruit and vegetables. from around 100 pharmaceutical plants in addition to Musi. waste from a variety of other industries. Name: Amberpet Sewage Treatment Plant (STP) Description: In 1997, a Supreme Court order resulted in Name: Musi River Hyderabad: A city drowning in pharmaceutical pollutionRajiv Gandhi the construction of an 18-kilometre pipeline to channel Description: The Musi River, a tributary of the Krishna effluent from the Patancheru common effluent International Airport River flows from west to east right through the heart of treatment plant (CETP) to the mega STP at Amberpet, Hyderabad. Historically, the Musi was seasonal and Village or neighbourhood Lake or river Industrial zone Waste treatment plant reported to be Asia's largest. Almost twenty years on, rain-fed, and irrigated approximately 24,000 hectares of the Musi is critically polluted and the Amberpet STP is adjacent farmland, but now due to the massive increase clearly not fit for purpose. When the investigation team in waste water volume being added to the flow by visited in early 2016, it was closed for four days for Hyderabad City and the Amberpet STP, it has become a essential maintenance. Throughout this period, perennial river irrigating 150,000 hecatres, so many wastewater entering the plant was being diverted No photos Plant operating Over-consumption Corruption Contaminated Illegal Dead crops Sick animals Health Chemical Bad Heavy Contaminated farmers have turned their crops over to rice paddy. through side channels leading towards the river. allowed above capacity of water water dumping of waste problems effluent Smell Security Food Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

markets. Actavis ceded its generics operations in A. MANUFACTURING PLANTS AND chemical waste is a constituent element of the pollution control board norms, and have featured seven EU Member States to Aurobindo in 2014, THE COMPANIES THAT OPERATE general effluent pollution described here. in multiple legal cases, media reports and exposes and the two companies also concluded a long- THEM down the years.121 Along with reports by the state term strategic supply arrangement.115 Over the The Bollaram industrial area was by far the worst Pollution Control Boards and India’s Central Drugs 24 months following the deal, Aurobindo planned a. HYDERABAD AREA: Patancheru-Bollaram that the investigation team witnessed: a vast site Standard Control Organisation, the list served as to replace half of Actavis’ products with its own Cluster, Gaddapotharam, Jeedimetla, filled with dirty industry including pharma, cement, one of the guiding documents in the planning of the low-cost high-margin products to bring down Bonthapalle, and Bachupally paint, agrochemicals, steel, electricity substations, investigation. Key highlights of the CSE analysis are its overall costs.116 This is not to say that other and paper. The air is thick with dust and pollutants, therefore woven in with our own findings and the drug manufacturers operating in the area are Around 270 industries including pharmaceuticals, constantly thrown up by hundreds of trucks company profiles set out below. not also guilty of generating large quantities of paints, plastics and chemicals operate in the going backwards and forwards over dirt tracks pharmaceutical pollution – in fact, all the evidence Patancheru-Bollaram industrial cluster.117 The crisscrossing the cluster, and the chemical smell is • AUROBINDO indicates that the practice is ubiquitous throughout largest pharmaceutical companies operating in the overpowering. Slum dwellings of corrugated iron India. However, until the industry and regulators cluster are Dr. Reddy’s, Aurobindo, Hetero, Mylan line the roadsides. Headquartered in Hyderabad, Aurobindo is one of decide to lift the veil of secrecy over the identity of (and its subsidiary Matrix), Ranbaxy Laboratories India’s largest vertically integrated pharmaceutical companies purchasing from factories in India and and SMS Pharmaceuticals.118 Nearby industrial areas A list of all companies sending effluent to the companies, targeting $2 billion in revenues by China, we will be left in the dark concerning the which were also visited for the purposes of the Patancheru CETP from the Patancheru-Bollaram 2015-16122 and $3 billion by 2017-18.123 The origin of the drugs we consume. investigation include Gaddapotharam, Jeedimetla, cluster, as well as a list of bulk drug units accused company is scaling up capacity in readiness for Bonthapalle and Bachupally. by a major Indian NGO of being the worst flouters more launches in its U.S. market, and plans to make 26 27 of environmental regulations using the CETP was India its sourcing hub for the European generic drug The Patancheru industrial area itself contains many obtained during the research phase preceding the business it acquired from Actavis Plc in 2014.124 pharmaceutical companies and a variety of other investigation. These companies are currently being Since launching its European commercial operations polluting industries. Of the 106 units sending challenged before India’s National Green Tribunal as in 2006 with the acquisition of Milpharm in the UK effluent to Patancheru Common Effluent Treatment part of a case brought by local activists and farmers and Pharmacin in the Netherlands in 2007, and Plant (CETP), the majority are pharmaceutical impacted by pharmaceutical pollution in Medak following the Actavis deal, Aurobindo has further companies so it is clear that pharmaceutical District, of which Patancheru is part. expanded its footprint in continental Europe, and has operations in Member States including France, The “worst polluters” list is derived from an analysis Italy, Spain, Portugal, Belgium, Romania, Malta of Telangana State Pollution Control Board (TSPCB) and Germany. The total value of the company’s inspection reports by India’s Centre for Science European operations recently reached the €500 and Environment (CSE) in November 2015.119 million mark, making it Europe’s largest Indian This found that 15 drug manufacturers operating generic pharmaceutical manufacturer.125 within the Patancheru-Bollaram cluster had egregiously flouted environmental regulations and Aurobindo first entered the market manufacturing Indian Supreme Court orders. CSE found that most semi-synthetic penicillin at the end of the 1980s126 companies were: manufacturing pharmaceutical and today its products include antibiotics (notably ingredients for which they did not have permission; cephalosporins), anti-retrovirals and anti-allergics. using more water than the permitted limit; and It has nine units for the production of APIs and dumping more effluents and hazardous waste than intermediates, and seven units for formulations allowed. Two of the units were operating without which it claims are “designed to meet the clearance from the Ministry of Environment, and requirements of both advanced as well as emerging Forests (MoEF). The analysis also cast doubt on market opportunities.”127 The company exports the quality of the TSPCB inspection reports, which to over 150 countries across the globe with more contained a number of significant discrepancies.120 than 86% of its revenues derived from international Many of these companies are repeat offenders when operations.128 Its customers include “premium it comes to environmental pollution and violating multinational companies” and many of its facilities

H. Actavis is now trading as Allergan, which is now owned by Pfizer following a record-breaking deal worth $160 billion in late 2015 (see: BBC, Polluted waterbody at Bollaram industrial area 23.11.2015, Pfizer seals $160 billion deal to create drugs giant, http://www.bbc.co.uk/news/business-34900344) tribunal/) Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

have been approved by regulatory agencies such FDA ban lasted until March 2013, effectively killing designed to provide it with an uninterrupted supply outsourcing production to smaller units in the area, as the U.S. FDA, the UK Medicines and Healthcare the deal.138 As one source familiar with Pfizer put it: of raw materials at competitive prices.147 The Indian the total amount of pharmaceutical manufacturing Products Regulatory Authority (MHRA) and Health “[Pfizer’s] choice of suppliers “suggests an inability company also has a Shanghai-based subsidiary waste it is responsible for can be assumed to Canada. It also has multiple approvals under the EU to ‘separate the wheat from the chaff.”139 called ALL Pharma (Shanghai) Trading Co. Ltd.148 go beyond the quantities that are generated GMP framework.129 by its own production units. In addition to the Generic drugs account for a substantial portion Aurobindo has a number of manufacturing Aurobindo plants listed below, a plant operated in Aurobindo operates several manufacturing plants of Aurobindo’s revenues. In 2014-15, its generics subsidiaries worldwide, including a company called Gaddapotharam by Senor Organics, a subsidiary of on the outskirts of Hyderabad,130 with two new units formulations business saw growth of 77.7% across APL Swift Services in Malta, which it sees as a Aurobindo,154 is also recorded as sending its waste approved for construction in Mahabubnagar District, all global markets, with 42% growth in the United “gateway” to the European market. APL was set to Patancheru CETP. to the south-west of the city.131 It also operates a States and a remarkable rise of 375% in Europe. up in 2008 with a remit to manufacture finished plant in Pydibhimavaram Village, 80km north-east Key growth markets were France, Germany, the formulations and provide services including - Aurobindo Unit I: The CSE analysis of of Visakhapatnam, and in the Jawaharlal Nehru Netherlands, the UK, Spain, Italy and Portugal. The lab testing, quality assurance for the release of Telangana State Pollution Control Board Pharma City, both of which are described in detail company also reports growing external demand products onto the EU market.149 Aurobindo Vice- inspection reports found that the unit below. In total, the company plans to build three for its active ingredients, which is being met by President Venulopalan Muralidharan said the produces an additional API without consent, new formulation plants in Telangana and Andhra its expanding Pydibhimavaram facility (Unit XI), company chose the island because of “its pool of consumes more water, and generates more Pradesh and to ramp up production at existing ones located 80km north-east of Visakhapatnam (see hardworking, English-speaking workers, reduced waste than consented155 Shortly before (including Unit I described below). The new plants below).140 Aurobindo currently has a total of income tax, investor-friendly legislations, and the CSE published its report in late 2015, will be located in: 232 abbreviated new drug application (ANDA)141 widely acknowledged quality standards of the Malta Aurobindo’s Unit I was given the go-ahead 28 29 approvals (201 final approvals including 10 for Medicines Authority, among others.”150 by the Ministry of Environment’s ‘green • Jadcherla (Mahabubnagar District), near Aurolife Pharma LLC and 31 tentative approvals) panel’, the Expert Appraisal Committee Hyderabad: this will be a semi-synthetic from the US.142 In fact, Aurobindo Pharma is This suggests that Aurobindo is importing (EAC) to invest Rs. 300 crore (approximately penicillin plant; among India’s most prolific filers of Drug Master formulations and APIs from its Indian manufacturing $40 million) in expanding production from • Visakhapatnam: the new plant will be an oral Files (DMFs)I and ANDAs.143 Four of Aurobindo’s plants to Malta for processing and then selling its current 96 tonnes per month to 421.2 finished dosage facility for export to European six “key” formulation plants in India manufacture them on to other European markets. A list of tonnes per month156, a significant increase markets; antibiotics144, with other sites manufacturing manufacturing and importation authorisations which raises big questions about the amount • Naidupet (Nellore District): oral finished antibiotic APIs, as described below. issued by the Maltese authorities in January 2016 of pharmaceutical waste that will be dosage facility.132 lists APL Swift Services as being in possession of a generated in the future and how that waste Aurobindo’s UK subsidiary, Milpharm Ltd., supplies licence to both manufacture and import drugs.151 will be treated, as well as the quantity and In 2009, a deal was struck whereby Pfizer would the antibiotics ciprofloxacin and cefalexin to the The export of packaged medicaments is worth provenance of water that will be required for licence a selection of generic drugs including four UK market. Aurobindo also supplies antibiotics to US$497 million to the Maltese economy, making production. Currently, antibiotic APIs make injectable antibiotics from Aurobindo as part of NorthStar Rx, a U.S.-based generic drug company them one of the country’s top three exports.152 up a significant share of production at the the U.S. company’s “grand plan” to expand into which is a subsidiary of pharmaceutical distribution Unit I plant and will continue to do so in the generics with lower manufacturing costs.133 The giant McKesson.145 In 2015, it was reported future: the Environmental Impact Assessment agreement expanded on a five-product U.S. deal by SumOfUs that NorthStar Rx was marketing ❖ AUROBINDO ON THE GROUND Report commissioned by Aurobindo shows entered into in July 2008 with Aurobindo, with amoxicillin capsules, amoxicillin and clavulanate – HYDERABAD AREA that antibiotics will account for 90 of the 421 which Pfizer first worked in 2006 through its potassium tablets and amoxicillin and clavulanate tonnes per month that will be produced. It animal health division.134 However, it was beset potassium powder for suspension on the U.S. Aurobindo says that it will do “whatever it takes notes that water will be procured from ground with problems. The antibiotics were to be supplied market, all of which were produced by Aurobindo. to keep [its] employees and the environment safe water and from outside suppliers in tankers from Aurobindo’s Unit VI – which manufactures Furthermore, Aurobindo held import licenses for and healthy.”153 However, all the evidence points to and that the nearest village (Borapatla) is just cephalosporin antibiotics - in Hyderabad but the several Chinese API manufacturers which had been the contrary. Our on-the-ground investigation has 500 metres away from the site. The Manjeera U.S. FDA suspended imports from the facility due identified as discharging high levels of antibiotic- uncovered damning evidence that its manufacturing River, which is a key source of drinking water to bad manufacturing practices.135 At the time, laden effluent into their surroundings in China, sites in India are causing systematic pollution of for Hyderabad, is 2.5km from the site. 157 annual sales to the U.S. market from Unit VI were namely: Sinopharm Weiqida, Harbin Pharmaceutical their surroundings and the local water supply, a estimated to be in $30 million136 and initial reports Group, NCPC and CSPC.146 In fact, Aurobindo holds scandal to which the company seems to be turning - Aurobindo Unit V is located a few hundred speculated the deal would last until 2014.137 The a 10% strategic stake in Sinopharm’s Datong facility a blind eye. If, as appears to be the case, it is also metres from Isnapur Lake, Pashamylaram,

I. A Drug Master File (DMF) is a document prepared by a pharmaceutical manufacturer which provides the relevant regulatory authority with regulatory authority relating to an existing licensed medication or approved drug. Once approved, an applicant may manufacture and market confidential, detailed information about facilities, processes, or articles used in the manufacturing, processing, packaging, and storing of the generic drug product in the relevant market. one or more human drugs. An Abbreviated New Drug Application (ANDA) is an application for a generic drug approval from the relevant Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

is also recognized by several other regulatory of Corporate Affairs is anything to go by. That agencies and customers globally. The facility revealed massive profit margins on 21 common had previously been inspected successfully by drugs manufactured by Indian companies. Although the U.S. FDA and the WHO.160 A large water national pricing regulations say that companies body lies on the other side of the road from can only keep a profit margin of maximum 100 per the plant. At the time of the investigation, cent over the cost of production of a drug, mark- there were no visible signs of effluent on ups of 200 to 500 per cent were found to be very the lake surface; however, a number of local common. The report identified Dr Reddy’s as being informants told the team that locals don’t in receipt of the highest profit margin identified drink the lake water, or eat the fish they catch – 509 per cent for Ciprolet, Dr Reddy’s version of Stream of polluted water flowing into Isnapur Lake just 165 below Pashamylaram industrial area here because it is polluted. Instead, fish is sold the antibiotic ciprofloxacin. This is the very same far away and information about where it was drug that was discovered in sky-high concentrations caught is kept quiet. Locals also report that at Patancheru treatment plant by a team of just inside the Patancheru industrial area. research indicates that this unit manufactures they develop skin problems when they swim in Swedish researchers in 2007. Dr Reddy’s markets Desk research indicates the Aurobindo V Nafcilin and Ampicillin antibiotic injectables the water. ciprofloxacin in the UK166 and U.S. markets.167 plant produces drugs for the U.S. and has FDA for the US, and Amoxicillin with FDA approval. approval. The investigation team was not able Aurobindo describes it as a “dedicated • DR REDDY’S Dr Reddy’s lists the amoxicillin based antibiotic to observe any gullies of effluent emanating facility spread over 15,228 square meters for Clamp 625 as one of its top brands.168 The company 30 31 directly from the factory premises towards manufacturing oral and sterile beta-lactam Dr Reddy’s was founded in 1984 by Anji Reddy, makes a lot of final dose generics so there is a nearby polluted gullies leading to the lake, but formulations.”159 During the investigation, who had previously been an employee of Indian high degree of chance the bulk drugs they make in it should be noted that very often companies an open gully was observed, appearing to Drugs and Pharmaceuticals Ltd, the body set up to Hyderabad are used within the company’s vertically run pipes underground from their sites, which emanate from inside the Aurobindo site, along foster the expansion of the Indian drug industry integrated supply chain. As in the case of Aurobindo, emerge elsewhere on the industrial area and which waste water was flowing, potentially in 1961. It is a vertically integrated company and Dr Reddy’s appears to outsource some of its API join into the gullies there. An informant who chemical effluent. Bachupally is directly was the first Indian drug manufacturer to be listed production to smaller companies in India. Its 2011- worked on the premises of Unit V explained adjacent to the Bollaram industrial area and on the New York Stock Exchange in 2001. The 12 Sustainability Report describes how the company that two adjacent independent factories more or less merges into it. The Aurobindo company clearly has global ambitions: a document outsourced the manufacturing of ciprofloxacin were both subcontractors of Aurobindo. This site is extremely highly securitised, with from its 2015 Investor Day makes clear that it to a plant in Gujarat, for example. The company suggests that smaller plants not bearing the two different sets of personnel, one team in intends to substantially expand its operations notes that one of the benefits of this approach was Aurobindo logo are carrying out work for camouflage and another in blue uniforms, worldwide.161 In 2009 Dr. Reddy’s labs signed a that it “significantly reduced the effluent load at them, which could potentially form part of very prominent around the perimeter and at deal with GlaxoSmithKline under which Dr. Reddy’s [Dr Reddy’s manufacturing units] but provides the export supply chain, and these smaller the entrance, as well as cameras. A gully was would manufacture and supply drugs to GSK no detail about how the effluent was treated at operations would potentially be polluting observed at the front right corner of the plant, which in turn would license and co-market the the external plant, except to say that it “complied more heavily, since they are not under the which appeared to be emanating from inside drugs across Africa, the Middle East, Asia-Pacific with all statutory environment norms.””169 Arene same level of scrutiny as the larger companies. the site, or certainly from between the site and Latin America.162 In 2010, Dr Reddy’s bought Life Sciences, a bulk drug and intermediate and its neighbour, mostly covered but open at GSK’s penicillin manufacturing facility in Bristol, manufacturer that produces the antibiotics - Aurobindo Unit IX: According to the CSE the point where it joins the main gullies, and Tennessee.163 ciprofloxacin and levofloxacin, and which also uses report, this plant generates over four times apparently containing effluent. the Patancheru CETP, states that its customers more hazardous waste than allowed and treats Dr Reddy’s business model is focused on the include “several multinational companies in India its waste inappropriately. Lack of data related - Aurobindo Unit VIII: In 2007 the unit production of low-cost generic drugs, which make & abroad” and lists Dr. Reddy’s as a domestic to the type of products manufactured raises received GMP clearance from the UK up the largest share of the company’s product customer.170 Arene is also exporting products to doubt surrounding the quality of inspection by Medicines and Healthcare Products Regulatory offering. However, low-cost production does not “Europe, Japan and Middle East etc.” Lee Pharma, the Telangana State Pollution Control Board Authority (MHRA), which the company said translate into low profits. The company had global which also produces antibiotics and uses Patancheru (TSPCB).158 completed “one of the important formalities revenues of US$ 2.4 billion in 2015164 and seems to CETP, equally lists Dr Reddy’s as a customer.171 of supplies to be made in the European Union be doing well out of the production of bulk drugs - Aurobindo Unit XII, Bachupally: Desk and observer states” given that the certificate if a 2012 study on drug pricing by India’s Ministry Dr Reddy’s 2013-15 sustainability report Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

acknowledges that “good health is impossible three times the level of hazardous waste Tamiflu, the drug deployed during the swine flu would suggest that it is importing finished dose without clean water, clean air, and a healthy soil”, permitted.176 epidemic.180 Products it manufactures include products manufactured and processed in India. explaining that the company sets itself “ambitious generics of the antibiotics levofloxacin, linezolid environmental goals that go beyond statutory - Dr Reddy’s Unit II: The investigation team and moxifloxacin.181 The company develops, The company states that it has a “strong global requirements and back[s] them up with strategic drove around the perimeter of the Unit II manufactures, and markets APIs, intermediate presence” in over 120 countries. exports its investments in talent and equipment.” Moreover, plant which manufactures APIs. The gullies chemicals, and generic finished dosages in India. products to the United States, Canada, Japan, they claim to “regularly conduct plant audits to surrounding the site were dry on inspection, It offers APIs in the areas of antiretroviral and and Australia, as well as Europe, Latin America, evaluate performance vis-à-vis these targets, but join into many other gullies of effluent all oncology products to the global pharmaceutical the Middle East, the Far East, Africa, the CIS, and and plug gaps if any.”172 However, the fact that running downhill towards a large effluent lake market; finished dosages in various therapeutic internationally. Dr Reddy’s manufacturing plants have repeatedly at the edge of the industrial area. areas, including antiretroviral, gastro-intestinal, been in the public eye for polluting their natural cardiovascular, antidepressants/antipsychotics, surroundings, prompts serious questions about the - Dr Reddy’s Unit III: According to CSE, the anti-diabetics, pain management, anti-infectives, ❖ HETERO DRUGS LTD. ON THE company’s stated commitment to “Mother Earth”. lack of data related to non-consented products dermatology, and oncology; and oncology products, GROUND – HYDERABAD AREA and hazardous waste generation raises doubts including injectables, solid/liquid oral dosages, ❖ DR REDDY’S ON THE GROUND regarding the quality of inspection by the ointments, soft gelatine capsules, and inhalers.182 - Hetero Unit I at Bonthapalle: Desk research – HYDERABAD AREA TSPCB.177 indicates that this unit manufactures Like Aurobindo’s Maltese subsidiary, Hetero Levofloxacin and Moxifloxacin and has been Dr Reddy’s operates four manufacturing units on subsidiary Hetero Malta Ltd is in possession of an WHO inspected. A source told the investigation 32 33 the outskirts of Hyderabad,173 two of which (Unit importation licence from the Maltese authorities, team that he had observed boreholes within I and Unit III) send waste to Patancheru CETP.174 which suggests that it is exporting drugs from India the premises of the plant into which chemical If, as appears to be the case, it is also outsourcing to Malta for distribution on the European market.183 waste was being dumped. The team observed production to smaller units in the area, the total Unlike Aurobindo, Hetero does not appear to be standing pools of what appeared to be amount of pharmaceutical manufacturing waste it manufacturing pharmaceuticals in Malta, which chemical effluent and waste water close to is responsible for can be assumed to go beyond the quantities that are generated by its own production units.

In November 2015, Dr Reddy’s received a warning letter from the U.S. FDA relating to two of its API manufacturing plants and one formulation plant located in Andhra Pradesh and TelanganaJ. The regulator said that it had found several violations with regard to good manufacturing practices at Gully with potential effluent running the plants and “strongly recommend[ed]” that the adjacent to Hetero plant company evaluate global manufacturing operations to ensure compliance with [GMP] regulations and requirements, “comprehensively and immediately.”175 Two of the units identified were • HETERO DRUGS LTD. located in areas described in this report as suffering severe pollution impacts from pharmaceutical Hetero Drugs Limited was founded in 1993 and manufacturing (Pydibhimavarmam Village and is based in Hyderabad.178 It has 25 manufacturing Visakhapatnam, Andhra Pradesh). facilities worldwide179 and turnover of over $1 billion. It is targeting revenues of over $2 billion - Dr Reddy’s Unit I: According to CSE’s for 2015-20. In 2005, it was licensed by Swiss analysis, this plant produces more than company Roche to make a generic version of

J. These were: CTO Unit VI, located at APIIC Industrial Estate, Pydibhimavarmam Village, Andhra Pradesh; CTO Unit V, located at Peddadevulapally Village, Telangana, and Unit-VII located at Plot No. P1 to P9, Phase III, Duvvada, VSEZ, Visakhapatnam, Andhra Pradesh. Apparent effluent adjacent to wall of air force plot at Bonthapalle Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

Gates of Hetero plant in Gaddapotharam

the site, separated from it by a walled plot of lake becomes polluted with the effluent, in inaccessible air force land. Local informants addition to which there is effluent emanating confirmed that a stream emanating from from the ground which seeps from the site and the plant runs across the air force plot and merges with the lake water. The informant emerges on the other side forming the pools has heard from a plant employee that the of effluent viewed. From here the waste seeps site has between 15-20 boreholes inside, into adjacent farming and grazing lands. The between 70-100 feet deep. Ostensibly they effluent pools increase in volume significantly were sunk for the company to obtain water for during the monsoon season to form a lake. its processing, but, the informant said, in fact Pollution from this site forms part of a waste is poured into them, and seeps into the multiple case (32 elements) currently before surrounding subsoil. the Green Tribunal. An informant told the team that he had entered the Hetero premises In 2012 the entire Nallah Punta was rated with members of the pollution control board completely contaminated by leaks from this as part of the court case, and observed large plant by the pollution control board, and boreholes which had been sunk inside their the company had to remove all the water compound and into which chemical effluent by tankers, however this has not stopped was being poured, ultimately to sink down and the pollution continuing each year, and the 34 35 pollute the groundwater table, seeping across company has also extended its perimeter into adjacent land during monsoon. into the surrounding common land/forest without permission. An informant alleges bubble with what appeared to be some kind of pharmaceuticals company registered in - Hetero Unit IV (Bonthapalle): According to that the Telangana Chief Minister Mr Chandra chemical reaction. the Netherlands and with operational CSE, this unit operates without environmental Shekha Rao has a commercial interest in the headquarters in Hatfield, Hertfordshire in clearance; manufactures eight APIs for Hetero factories - as with the Hetero plant in - Hetero Labs Ltd Unit (Hetero Labs is part of the United Kingdom. All active ingredients which it does not have consent; finally, its Visakhapatnam (see section on Visakhapatnam the Hetero Group): CSE reports that this unit are manufactured in India (4 facilities in volume of waste is not commensurate with below). This, if true, might explain the operates without environmental clearance. It Hyderabad; 4 in Vizag; and one in Mumbai). the production amount, which is three times apparent impunity with which Hetero recently applied to expand production capacity The third largest pharmaceuticals exporter over the limit. According to an employee at pollutes in this village despite much public to 6,473 kg/day for up to 72 products, which in India for fiscal year 2014, the company the plant, there are a number of borehole campaigning and attempts at prosecution. will increase its water consumption and waste claims that one in 13 prescriptions in the wells inside the site into which chemical generation. US – brand name or generic – is filled with effluent is being dumped. The investigation - Hetero Unit I (Gaddapotharam): CSE’s a Mylan product. In Australia it is the No.1 team was shown pipe openings behind the analysis shows that the amount of APIs this - Cirex Pharmaceuticals Unit (Cirex is part supplier, by volume, to Australia’s national site from which chemical effluent has been unit produces is more than seven times the of the Hetero Group): According to CSE, pharmaceuticals program.186 Mylan acquired observed being discharged into the adjacent consented amount. Its water consumption this unit treats its effluent inappropriately. a controlling stake in Hyderabad-based open land during monsoon season. The site is and waste generation are accordingly very Furthermore, the lack of data in the TSPCB pharmaceutical company Matrix in 2006, 10-12 years old. The villagers say they have high. The investigation team observed what report casts doubt on the quality of inspection. giving the company a firm footing in the APIs experienced continuous pollution since its appeared to be chemical effluent flowing Drug supply websites list the company as market.187 inception. A wall behind the plant gives on along an open concrete gully beside the plant. a supplier of ciprofloxacin (antibiotic)184 to a wide tract of land which floods during This was then tracked back to the side gates of and pentoxifylline (used in cardiovascular Founded in the 1960s in West Virginia, monsoon season forming a large lake called the site. At this junction, a covered pipe within treatment).185 USA, Mylan Labs makes ciprofloxacin and the Nallah Punta. An informant told the the Hetero plant led out and joined onto the amoxicillin antibiotics.188 It also makes a investigation team that at that time the plant effluent gully, and was partially exposed just • MYLAN LABORATORIES LTD. generic version of AstraZeneca’s Atacand for releases large quantities of effluent via the inside the gate, where the team could see Novartis’ generic drug subsidiary Sandoz – wall openings which enter into the flood plain effluent emerging to join the main flow. When Mylan Laboratories Ltd is the Indian subsidiary which is manufactured in Hyderabad and was and merge with the rainwater. The entire the effluent was stirred with a stick it began to of Mylan Inc, a global generic and specialty the subject of a Class III voluntary recall in Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

2014 by Novartis.189 In 2013 Mylan issued through the industrial area. the U.S. and EU authorities inspected. The plant is under construction in Visakhapatnam recalls for 11,650 cartons of ciprofloxacin investigation team heard allegations from a through its joint venture partner Granules tablets because the drugs “were produced CSE’s analysis identified a non-specified Neuland employee that the company dumps OmniChem.202 The company claims to have and distributed with active ingredients Mylan Laboratories plant operating within the chemical waste inside the site in underground the world’s largest capacity for producing not manufactured according to Good Patancheru-Bollaram cluster which generates containers, sealed at ground level with pharmaceutical formulation intermediates Manufacturing Practices”.190 Arene Life about three times more hazardous waste than concrete. This is illegal, since containers are through its facilities at Jeedimetla and Sciences, the bulk drug and intermediate permitted. meant to be above ground in order that they Gagillapur, both located in Telangana. In manufacturer that produces ciprofloxacin and can be continuously inspected for leaks. The 2015 it received three ‘observations’ from levofloxacin and uses the Patancheru CETP - Astrix Laboratories Unit (Astrix is a company has covered the containers with the U.S FDA for its Jeedimetla, facility. (see above) also lists Mylan as a domestic subsidiary of Mylan and specialises in concrete. During monsoon season the ground The FDA issues these when the observed customer.191 manufacturing anti-retroviral APIs192). The becomes soaked with rainwater and chemical conditions or practices indicate that an FDA- CSE analysis highlighted a lack of data related waste reportedly seeps from the containers regulated product may be in violation of ❖ MYLAN LABORATORIES LTD. to the type of products manufactured at the which are leaking underground. Apparently, FDA’s requirements. According to its 2014 ON THE GROUND – HYDERABAD Astrix plant, which casts doubt on the quality this pollution, joins with the pollution from Annual Report, Granules India has shares AREA of inspection by TSPCB. the nearby Hetero IV plant (see above) to in Jeedimetla effluent treatment Ltd and contaminate the Nallah Punta lake. Patancheru Envirotech Ltd.203 Its 2005-06 - Mylan Unit I: Gaddapotharam industrial • NEULAND Annual Report cites “Customer validations area. Desk research indicates that this OTHER COMPANIES OF NOTE coming in from large pharmaceutical 36 37 facility is manufacturing the antibiotic Neuland describes itself as a “pure play WHICH USE PATANCHERU CETP players like Pfizer, Perrigo, Ranbaxy and Sun moxifloxacin, and has been WHO inspected. API company” - which means that it only Pharma,”204 although more recent details The investigation team did not observe any manufactures APIs - and as a “preferred and - MSN LABORATORIES: Makes APIs and about its customers appear to be unavailable. effluent directly connecting to the Mylan site reliable API source for leading pharmaceutical finished dosages. A 2013 corporate video 32 per cent of the company’s sales are in in this cluster, however as explained in the companies worldwide.”193 It produces the shows Levanol 750 packaging, which is an the US and 31 per cent are in Europe, with a section above on Hetero I located at the same antibiotics ciprofloxacin, moxifloxacin and antibiotic containing levofloxacin.198 It is further 11 per cent in Latin America, 10 per industrial area, there are heavy volumes of ofloxacin.194 In 2013, a subsidiary of Japan’s unknown whether MSN provide the API for cent in Asia and 16 per cent in India.205 chemical effluent apparently being discharged Mitsubishi, APIC, invested in Neuland as this drug or make it in finished dosages. The within the area and polluting the valley below part of a drive to build up its pharmaceutical aforementioned corporate video also list - NESTOR PHARMA: Large antibiotics via open channels. As mentioned elsewhere, business.195 The company’s Annual Report GlaxoSmithKline, TEVA, Hospira, Sandoz manufacturer with a bulk drug facility it is quite possible that this site would conceal 2014-15 states that it has nearly 40 (generic arm of Novartis), Mylan and Sanofi in Hyderabad. The company produces the origin of its effluent discharge by running commercial products being sold to around Aventis as partners. anti-tubercular antibiotics, penicillins, the piping underground and connecting to the 450 generic and innovator companies in 70 cephalosporins, tetracyclines, quinolones, main gullies elsewhere within the network. countries, primarily in the highly regulated - LEE PHARMA LTD: Manufactures APIs, and other antibiotics.206 The Indian-based markets of Europe, North America and intermediates and granules. Produces three company has operations in India, the UK and - Mylan Unit III (Jeedimetla industrial area): Japan.196 In 2015, 46 per cent of its revenues antibiotic APIs: linezolid Form II, moxifloxacin Nigeria. Its foray into the European market Desk research indicates that this facility is came from Europe, a further 32 per cent from Hcl and prulifloxacin Hcl. Also manufactures began with the 2005 acquisition of Suffolk- manufacturing APIs and has been inspected North America and the rest from India and ciprofloxacin, clarithromycin and azithromycin based manufacturing unit Schering Plough, by the WHO. An open gully was observed with Japan combined.197 granules.199 The company lists TEVA, Dr. which has since been renamed Nestor UK what looked like chemical effluent behind the Reddy’s, Matrix and Ranbaxy amongst its Ltd.207 site adjacent and parallel to the perimeter. ❖ NEULAND ON THE GROUND – major clients.200 It was difficult to say whether the gully HYDERABAD AREA - SARACA LABORATORIES LTD: Also part of emanated from inside since it was covered - GRANULES INDIA: Makes APIs, finished the Virchow Group, Saraca manufactures APIs at the junction between the site wall and its • Neuland I (Bonthapally, Domudugu Village): dosages and intermediates including the and intermediates and sells products in over entrance into the gully at right angles, but Desk research indicates that this site antibiotics ciprofloxacin and rifaximin.201 40 countries.208 CSE reports that its Hyderabad potentially it is Mylan effluent. This joins up to manufactures fluoroquinolones and other It has three manufacturing facilities in unit generates about eight times the amount the network of gullies full of effluent running antibacterials and has been inspected by Hyderabad and one in Jingmen, China. A fifth of hazardous waste permitted. Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

- COVALENT LABORATORIES Pvt LTD. shifted the pollution to a different location, Covalent specialises in the manufacture rather than addressing its root causes, local of cephalosporins, a class of beta-lactam environmental campaigners see the development antibiotics. It makes both oral and sterile of pharmaceutical manufacturing in Visakhapatnam types, including cefixime, cefdinir and as a cynical move to transfer polluting activities cefpodoxime proxetil209. All are bulk drugs from Hyderabad to another area. Capt. J. Rama – meaning that they are sold on to bigger Rao notes in this regard that effluents [formerly] companies to be turned into final dose discharged into water bodies in and around land- products. Covalent is part of the Virchow locked Hyderabad, “can safely be discharged into Group. CSE found that the Covalent unit treats sea [off the coast of Visakhapatnam] by laying its waste inappropriately. The lack of data a pipeline deep into sea.”213 True as this may be,

related to the products the Covalent plant with the planned expansion of pharmaceutical Pipe apparently discharging effluent into village tank at Rajiyyapeta manufactures also casts doubt over the quality manufacturing in Telangana, it seems unlikely that of inspection by the TSPCB. pollution levels will drop in Hyderabad at all. In that sense, the development of Visakhapatnam has industrial deaths within the City. In a recent Treatment Plant, which is presented as a key - VIRCHOW LABORATORIES, another simply opened up a new front in the fight against incident, in September 2015, two workers feature of the industrial area in marketing member of the Virchow Group, located pharmaceutical pollution. were burned to death and five others were materials, also impacts these villages. in Jeedimetla, claims to be the preferred injured following an explosion at an API plant 38 39 supplier of the antibiotic sulfamethoxazole Scientific studies have highlighted high operated by Sainor Life Sciences Ltd. At least - Hetero plant, Rajiyyapeta Village: This plant to GlaxoSmithKline, Hoffman La Roche, pharmaceutical residues in the Bay of Bengal, six major fire accidents have been reported at is reported to be manufacturing antibiotics Merck Generics.... ‘and various generic notably of antibiotics, given their widespread the JNPC city in the past few years, and there for Western export. It occupies a large site manufacturers worldwide’.210 use in aquaculture (in particular shrimp farming, are are allegations that the managements directly bordering one side of the village lake, which is a major industry in the region).214 It does of pharmaceutical companies operating at around 2.5 km from the coast. There are no b. VISAKHAPATNAM AREA not take a huge stretch of the imagination to posit the site have not introduced adequate safety other plants in the vicinity. The lake appears that the dumping of large amounts of untreated or measures.215 An informant described two to be completely polluted by chemical effluent inadequately treated pharmaceutical waste into the chemical effluent lakes within the complex and the water is undrinkable. Villagers The main hub of pharmaceutical activity in the sea next to Visakhapatnam, a coastal city directly which discharge into nallahsK flowing out originally sold the land ten years ago on the Visakhapatnam area is the Jawaharlal Nehru adjacent to the Bay of Bengal, could result in very of the site towards the sea, but it was not promise of jobs at the factory which never Pharma City (JNPC), which started operating in serious consequences, mixing with the antibiotics possible for the investigation team to access materialised - all jobs are given to outsiders. 2008. The site comprises a Special Export Zone used by the aquaculture industry to spread drug these. (SEZ) and is being touted as an “ideal destination resistance in bacteria. Adjacent to the factory a large pipe mouth for investors.” Most of the drugs manufactured Since the site opened, there have been was observed sunk into the edge of the north in the JNPC – whether formulations, bulk drugs - Jawaharlal Nehru Pharma City/CETP: steady increases in reports of adverse health east corner of the lake. Upon inspection the or intermediates – are exported abroad. The SEZ This huge modern industrial site, run as a effects, breathing problems, fertility issues, pipe mouth and the lake bed around had a plays host to numerous foreign pharmaceutical joint venture between Ramky Group and the skin disorders, and so on, as reported in thick layer of what looked like black chemical companies, including U.S. giant Mylan, Pfizer Andhra Pradesh state government, is highly Hyderabad, and surrounding agricultural lands pollutant beginning just below ground level subsidiary Hospira, Japan’s Eisai, Germany’s Pharma securitised, bounded by perimeter walls, have reportedly been heavily contaminated and going deep down under the lake. An Zell and India’s own SMS Pharmaceuticals.211 Other with checkpoints, and limited entrance/exit in all directions by chemical effluent from informant confirmed that there are regularly clients apparently operating outside the SEZ include gates controlled by barriers. Journalists are the industrial area running downhill through chemical dumps which cause all of the water Indian companies Aurobindo, Hetero and Lupin not welcome on the site and recently media the open nallahs which feed into local water in the tank to turn black. The tank empties via Laboratories. 212 entering were pulled in for questioning on bodies. Nallahs leading to the sea discharge a gully towards the sea and there is also water the grounds of not having prior permission, chemical effluent affecting the fish and exchange into the surrounding area during In the same way that the construction of the and had visa rights permanently rescinded. livelihoods of coastal villages, and discharge high tides and via ground water leaching. pipeline connecting the Patancheru CETP to Outside scrutiny is not welcome and access into the sea from the JNPC’s Common Effluent the Amberbet Sewage Treatment plant simply is therefore risky. There have been regular

K. Nallahh’ is an Urdu word meaning “arm of the sea” used to describe a stream, watercourse or steep narrow valley. The nallahhs described here are sometimes manmade channels, sometimes following stream-type watercourses, but often with pipes connecting to them, then linking to each other, flowing into large waterbodies. Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

evidence of mass pollution from the Aurobindo An informant alleged that the Andhra Pradesh by agricultural land. The team observed a local manufacturers. This meant that from day one, plant, which was ordered to send its effluent to Chief Minister Mr Chandra Babu Naidu is an lot of what looked like chemical effluent in it was outside of direct state control, employing the sea 3 km away. However, this has been largely “unofficial” shareholder in Hetero which might standing water around the back of the plant. personnel appointed and paid by the polluting ignored: the plant continues to dump locally and the help explain how the company has managed to Although there are a couple of other factories industries themselves. This model was subsequently ground water is highly contaminated. extend the site on protected forest land here in the vicinity, Aurobindo is the closest to the replicated at the Patancheru plant, which is run by a

to the current plot of 2,000 acres, and also effluent observed. private company owned by the manufacturers. The why they have not faced any prosecution over Local village tanks are also in close proximity B. ON THE GROUND: government and pollution control board became the lake contamination despite the fact there to the plant and villagers report serious INDUSTRIAL WASTE TREATMENT mere overseers as the polluters effectively became are no other factories anywhere around. pollution problems from the water. At the IN HYDERABAD AND the owners of the effluent treatment plants.217 front of the plant is a quasi-permanent police VISAKHAPATNAM: A TALE OF SHOCKING DYSFUNCTION AND - Aurobindo XI, Pydibhimavaram Village. outpost, put in place a few months ago Oversight of the Patancheru CETP is the remit of the Desk research indicates that this plant apparently to intimidate workers who had INDUSTRY CAPTURE Telangana State Pollution Control Board (TSPCB). manufactures APIs and has UK MHRA and FDA staged a strike after many had been laid off. However, with the plant under the ownership of the clearance. This ten-year-old plant is situated Gullies around the perimeter of the site at the The bulk of pharmaceutical waste from factories industries that use it, and PCB officials in cahoots 80 km north-east of Visakhapatnam towards rear were dry at the time of the investigation around Patancheru is treated at two facilities: with companies, monitoring is poor. For example, the coast and was set for expansion in 2015 but clearly carrying effluent at other times Patancheru Common Effluent Treatment Plant the quality and quantity of the effluent entering according to Aurobindo.216 The area has a since some were shored up with sandbags (CETP, also referred to under the acronym PETL, the the CETP should be recorded by the PCB. However, number of manufacturing plants of different where there had been leaks. name of the company that runs itL) and Jeedimetla according to the Hyderabad University academic 40 41 kinds but is not a concentrated hub of the CETP, which were set up in the late 1980s to Vijay Gudavarthy, officials fail to adequately In 2010 the pollution control board came to inspect sort seen elsewhere, and the site is set in mid-1990s. Hazardous waste is handled at the perform the required checks.218 Kankana Das, the site following village demands, and found amongst a number of villages, and surrounded Ramky Hazardous Waste Plant. Effluent from the Deputy Programme Manager at India’s Centre for Patancheru and Jeedimetla CETPs is channelled Science and Environment (CSE) paints a similar to the Amberpet Sewage Treatment Plant (STP), a picture. She says that prior to the lifting of the 2010 major facility to the south of Hyderabad’s Hussein moratorium on industrial expansion in Patancheru- Nagar Lake. All of these treatment plants were Bollaram, PCB officials were under instructions to visited as part of the on-the-ground investigation monitor all effluent discharge points – including at in early 2016. The picture that emerges from the the manufacturing plants themselves and the entry evidence gathered there and through consultation to the CETP. However, when the ban was lifted the of numerous reports and documents is one of PCB’s responsibilities were reduced to inspecting systematic dysfunction, with problems ranging the discharge point at Amberpet Sewage Treatment from overcapacity and inappropriate processing of Plant (STP), at the very end of the treatment waste to a complete (albeit temporary) suspension process.219 of operations resulting in the discharge of untreated effluent into the local water supply over a number In 1997, a Supreme Court order resulted in the of days. construction of an 18-kilometre pipeline to channel effluent from the Patancheru CETP to the STP at Local industrialists played a pivotal role in the Amberpet, reported to be Asia’s largest. From establishment of the effluent treatment plants, its very inception, the Amberpet pipeline project, and regulatory infringements there are generally which also receives waste from the Jeedimetla treated with indulgence, not to say indifference, plant through Hyderabad’s sewerage system, by the local authorities. This goes some way to was vociferously rejected by environmental explaining why they are failing today. In the case campaigners, who saw it as a way of just shifting of the Jeedimetla plant, which is located roughly the problem of pharmaceutical waste to another 20km east of the Patancheru-Bollaram cluster, it location within the Hyderabad area, and certainly was set up by a cooperative society composed of not as an effective solution.220 Almost twenty years

L. Full name: Patancheru Enviro Tech Ltd. Fishing in apparently polluted village tank behind Aurobindo XI plant Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

on, its critics have sadly been proven right: the Indeed, the investigation team heard from many Patancheru CETP could be acting as a reservoir for A 2009 follow-up study found “unprecedented” geography of pollution incidents has expanded to informants about widespread dumping of effluent the proliferation of antibiotic-resistant bacteria. contamination of surface, ground- and drinking include new areas and the Musi River, which runs by tankers at roadsides, into open nallahs, and They took water samples from the plant, which at water with pharmaceuticals in the region through the city of Hyderabad has become even other water bodies. Those who bear the brunt the time served around 90 bulk drug manufacturers surrounding the Patancheru plant, and noted that more critically polluted. Furthermore, like the of such pollution are the villagers and farmers in the local area. The samples contained by far “the most urgent aspect of the environmental drug Patancheru CETP, the Amberpet STP does not have living close by. Both Kankana Das and Vijay the highest concentration of pharmaceuticals contamination is that high levels of broad-spectrum the capacity to remove any hazardous compounds, Gudavarthy report that health problems in the reported in any effluent sampled to that point, antibiotics are likely to promote the development merely diluting the concentration levels of toxic and area are on the increase, including high rates of with the presence of several broad-spectrum of highly antibiotic-resistant microorganisms and other substances.221 miscarriage. Some pharmaceutical units attempt antibiotics raising concerns about the development possibly horizontal transfer of resistance factors to to distance themselves from illegal dumping, of drug-resistant bacteria. In particular, the human pathogens.” The use of “activated sludge” To add to this gloomy picture, some manufacturing claiming no liability and instead blaming the tanker researchers found “exceptional” concentrations of containing approximately 20% of raw human faeces, units are not even sending their waste to the companies.222 fluoroquinolones (notably ciprofloxacin), a powerful “inevitably containing pathogens”, to metabolise effluent treatment plants. Illegal dumping – either class of antibiotics reserved for the treatment of the influent was described as an exacerbating factor by tankers or through pipes that come directly Patancheru Common Effluent Treatment Plant: serious bacterial infections. The total discharge in that close contact between pathogens, resistant from the manufacturing plants – appears to be Companies from every stage of the production load was calculated as roughly 45kg of APIs per day, bacteria and antibiotics can facilitate the transfer commonplace. chain, including synthesis of intermediates and which is equivalent to the total amount consumed of resistance to pathogens.224 Another related APIs, use the Patancheru CETP, with 200 tankers in Sweden (population 9 million) over an average study published in 2009 found that a significant In an attempt to combat this, a rule was introduced containing effluent reportedly entering the 5-day period. The researchers observed that if number of medicines available on the Swedish 42 43 whereby tankers are only allowed to visit the plant every day. At the plant, the investigation the equivalent amount of the 11 most abundant market contained APIs originating from Indian CETPs between 6am and 6pm, meaning any team encountered a high level of security, which APIs released over a 24-hour period were to be producers sending their effluent to PETL, implying tankers seen on the roads outside this window are prevented them from accessing the site. In purchased as final products in a Swedish pharmacy, an “international responsibility” to improve the potentially dumping. Still, local reports indicate 2007, a team of Swedish researchers alerted the they would cost over €100,000 even if generic environmental situation in Patancheru, all the more that the dumping continues, often late at night. international community to the possibility that the brands were selected. 223 so in light of the global threat posed by the spread

Industrial effluent tanker leaving Patancheru CETP Information board outside Patancheru Common Effluent Treatment Plant Close-up of apparent chemical deposits outside Ramky Hazardous Waste Plant Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

Information board at Jeedimetla Common Effluent Treatment Plant The report goes on to say “We had some indication of unsavory conclusions when we queried the Jeedimetla and Patancheru CETPs about what happened to effluent tankers which were turned back by the CETP managements because the effluent they carried did not meet the inlet parameters. There was no credible reply. The local citizen groups say that these effluents are then dumped into the nearest nallahhs” (streams). In actual fact, tankers are rarely turned away because there are no checks on whether effluent meets these parameters.227

Jeedimetla Common Effluent Treatment Plant: When the investigation team visited the Jeedimetla CETP, they encountered a heavy security presence. Tankers were observed entering and leaving the site from the public highway, and the investigators 44 45 had a confrontation with security guards. There is a general air of paranoia at all the CETPs whereby any questions, photographers, video cameras are of AMR.225 outsiders are not allowed access to inspect, and the that has repeatedly violated basic environmental perceived as a threat and responded to with heavy- pollution control board, which is supposed to be regulations] indicates. Thus, one could conclude handed security and threats of police intervention. Ramky Hazardous Waste Plant: At the Ramky checking is reportedly highly corrupt. that as far as AP [Andhra Pradesh] is concerned, one plant, which is the only one of its kind set up to does not really know where the bulk of its hazardous Amberpet Sewage Treatment Plant: Inputs into treat hazardous waste in Hyderabad, effluent was The team observed what appeared to be chemical waste really goes.”226 the Amberpet plant come from a closed pipeline observed to be seeping from under the perimeter effluent in standing water pools in open land behind wall of the plant into open land behind. According the site, starting only a couple of feet away from the to an informant there is a major problem with the perimeter wall. Also observed was what looked like plant. The original design was intended for the final a large hill inside the site, higher than the top of the product sludge waste to be stored in containers, perimeter wall, which the informant says is a heap buried in synthetic-lined pits to eliminate seepage. additional waste now being piled up above ground The site was intended to last 25 years before level. There are high levels of security at the plant reaching full capacity. In practice, there has been (team was forced to stop filming on the open public seepage on a large scale, and capacity was overshot road outside the entrance). much earlier than 25 years, due to other regions also sending their own hazardous waste to the A 2004 investigation by the Indian Supreme Court plant, which was not featured in the original plans. Monitoring Committee on Hazardous Wastes found that an “interesting feature of hazardous The team was told by an informant that containers waste handling in [Hyderabad] is that a maximum are now leaking into the ground, so that when it percentage of it (52%) is declared “recycled”, rains and during the monsoon season, the seepage 45.4% goes for final disposal and only 2.5% is drains out from the site underground into the water incinerable... There does not appear to be any table and up into the surrounding area. The site controls over the waste once it goes for “recycling”, claims it has expanded to meet the demand, but as the example of SMS [a pharmaceutical company

Effluent flowing untreated through Amberpet Sewage Treatment Plant - closed for maintenance - directly into the Musi River Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

direct from Patancheru CETP and the city sewage system which also apparently contains effluent A few dozen metres from the STP is the Golnaka waste from Jedimetla CETP. Surplus Nallah I&D (Interception and Diversion) which channels effluent into the STP from various The investigation team visited the plant, which has sources. This plant is situated at the mouth of a a capacity of 339 million litres/day (mld). Other wide nallah which leads out from the bottom of Effluent at Chaitanya Nagar Colony STPs handling domestic waste generated by the Hyderabad’s Hussein Sagar lake, and is discharging city are Attapur (51 mld), Nagul (179 mld) and large volumes of city waste directly into the Nallahcheru (30 mld), so the total capacity of all river beyond the plant. A small proportion of the STPs is 620 mld. However the total volume of waste nallah water is being diverted through the plant, came across several instances of pipes feeding from emanating from the city is 3,000 mld, so around and mixed with the contents of other pipelines plants or industrial areas into the sea. The impact of 60% of the sewage waste is not being treated, and converging here. The investigation team observed the pollution on local fish stocks has been dramatic, is being discharged in a raw state into the river (let two overhead pipelines which descend below depriving local people of a key source of revenue. alone the chemical waste which is also entering the ground at this point. They were told that one of C. ON THE GROUND: LOCAL system from Patancheru and Jedimetla CETPs and these contains domestic waste from the Chardagard POLLUTION IMPACTS IN other industrial areas - see Upal below for example). area of the city, and the other is the 18km Patancheru pipeline, and that a pipe here takes 20% HYDERABAD AND a. Hyderabad and surrounding areas The plant has applied for expansion to be able to of the water from the nallah and inputs into the VISAKHAPATNAM AREAS 46 47 manage a further 120 mld but there is an issue Patancheru pipeline at this location. From here the At Chinna Vagu, Chaitanya Nagar Colony, over land so it is not clear when or if this will go pipeine runs underground into Amberpet. In Hyderabad, at least twenty-two villages chemical effluent was clearly observed to be through. At the time of the investigation, the plant affected by pollution lie in the immediate vicinity pouring along an open nallah coming down from was not operational, and all the water entering Returning to the Amberpet plant the team was told of the industrial development areas where the direction of Patancheru industrial area. This was being diverted through side channels leading that all incoming pipes, i.e. domestic waste, other pharmaceuticals and bulk drugs manufacturing is meant to be a general water/sewage nallah, towards the river. The contractor on site told the inputs and the contents of the 18km pipeline, are units are located. In addition to this, twenty-three however the surface of the stream was covered team that the entire plant was closed for four days all mixed into one large pipe and enter the plant as villages along the Musi River and several others in heaps of thick white froth and there was an for essential maintenance. During this time there one flow. When asked if they were aware that the situated along the streams carrying pollutants, are overpowering chemical smell. A small pond had was no treatment whatsoever. He told the team that flow contains chemical effluent from Patancheru affected.228 Many of them are engaged in water- collected adjacent to the main stream, and farmers they test for 14 parameters daily, which are to do going into a domestic sewage plant unable to treat intensive activities such as the the production were running plastic hose pipes from this highly with domestic waste only. The waste is screened for it, the operative said he was unaware and could not of rice and sugar cane, and aquaculture, so contaminated water source into adjacent land plastic objects, then filtered through grit and sand, comment. the contamination of the area’s water supply where they were growing guava and other fruit then passed through the bioreactors. In Visakhapatnam, the investigation team visited Since close-by available water sources are highly contaminated When asked whether they test for toxicity and the Jawaharlal Nehru Pharma City Common Effluent and in any case insufcient in volume for their requirements, the chemical effluent content, he said that they have no Treatment Plant. The pipeline from the plant pharmaceutical companies buy up water (collected by tanker) from resources or money to do so, but once every couple originally ran to the sea overground but has now of months the Environmental Pollution Testing been buried, with concrete inspection manholes outlying villages - this has the knock-on efect of depriving village Research Institute come to check whether toxicity at intervals which enable its route to be traced farmers of water for their own agricultural land, making farming levels have been breached. When these are found for the 6-7 km it runs to the sea discharge point. increasingly unsustainable, and causing crisis for these already to be over the limit, instructions are issued by the Informants report that there have been leaks at impoverished rural communities. institute to reduce the levels of toxic chemicals by various points over time. A huge thermal power 20-25% by mixing the toxic waste with domestic plant also discharges into the sea close to the CETP waste in order to “decompose the heavy metals.” pipe and contributes to the general contamination poses a significant threat to their livelihoods. In and vegetables. There were catfish in the pond. The contractor freely acknowledged that heavy of the area. Visakhapatnam, which is on the coast of Andhra According to our informant these are the only fish metals do not decompose in biowaste and that this Pradesh, the sea is often used as a dumping ground which can survive in such polluted water, and they measure is therefore futile. for industrial effluent, and the investigation team are caught and sold for human consumption. The Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

Gaddapotharam industrial area, which contains a side channel which leads off towards the edge many pharmaceutical companies and has no on-site of the hill and from there runs in a strong steady CETP, enter into an existing irrigation system which flow down an open nallah into the wide valley traditionally watered the entire valley, and enabled below. An informant told the team that this well a drought-prone region to achieve two crops per was constructed officially, under the auspices of an year for 400 years. organisation called the Model Industry AssociationM The gullies from many factories on the site all even though it is illegal to collect untreated connect in a large network. In one direction they chemical effluent in open tanks. In the rainy season lead towards a vast lakebed, now completely dry but the well overflows and more of the effluent inside smelling strongly of chemicals and with what looks joins the existing open flow heading out and down like chemical salt crusting its surface. In the other towards the valley. The original intention had been direction the gullies converge and feed into an open to regularly empty this well and transport the concrete well, built around 2005, about 25 feet contents by tanker to a Common Effluent Treatment deep, filled to the brim with effluent. Plant, but the informant says this has rarely, if ever, been known to happen. Buffalo grazing adjacent to polluted Isnapur Lake Since a large volume of effluent is constantly pouring in from the whole Gaddapotharam The system is constructed of interlinked canals and industrial area, the overflow is diverted through water tanks controlled by gates, the first of which is 48 49 Chinna Vagu nallah feeds into the overall network of chemical effluent was observed to be flowing into nallahs which form the sewage system, theoretically the lake, forming thick crusts in some places, and ultimately being treated for sewage (but not for in others appearing to be bubbling with chemical M. Information on the Model Industry Association is hard to come by. However, it would appear that Aurobindo is a member. chemical waste) at Amberpet STP before being reactions occurring under the surface. discharged into the Musi River. Close-up of chemical pools in lakebed at Kazipally The lake bed was thickly coated in a black tarry Isnapur Lake, Pashamitaram is a large tract sediment which appeared to go down to a of water adjacent to one side of the Patancheru considerable depth. An informant who herds cattle industrial area. It is traditionally rain-fed, so at the lakeside (some animals were entering the would be completely dry at the time of year the water) said that he brings around 60 buffalo each investigation took place. However, there was a year to the area to graze the common land grass substantial amount of water in the lake, all of which here for various owners in surrounding area. He derived from waste flowing in through open nallahs said that half of the herd fall sick and die each year, from the industrial area. What appeared to be from drinking the water or eating the grass - the buffalo are milked and the milk is consumed by owners/purchasers. The animals then go to the slaughterhouse and enter the food chain as meat. He told the team that the pharmaceutical industry association pays compensation to the owners each time, and they use it to buy replacement animals. Farmers are bringing animals here to graze despite the risks since their former agricultural land is all being bought up, often forcibly, for development. This means that they have shrinking areas of public grazing space and have to resort to whatever is available, even if it is contaminated.

Gaddapotharam: Nallahs flowing downhill from

Close-up of the water flowing into Isnapur Lake, Pashamylaram Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

at Kazipally village. The tank there was completely problems. The livestock suffer from the same issues, dry when the investigation team visited. The for example goats have frequent miscarriages from villagers keep all the gates permanently open now, eating the contaminated grass. The investigation which means that no water can collect within the team was told that nothing can be grown for human system any more, and the lake bed was crusted with consumption in Kazipally village. what looked like concentrated chemical salts. Rings of what appeared to be rust-coloured chemical Bonthapalle, Domudugu Village: Village people deposits were visible on granite boulders dotted avoid eating the food they grow here, which across the lakebed. Digging with a stick below the is mostly sold elsewhere, and there are many surface crust revealed thick black tarry sediment, health problems linked to the high pollution which our informant told us has been measured and levels, including miscarriage, cancers, deaths of goes down to a depth of 200 feet. livestock etc. The village well is contaminated and The entire irrigation system, and the surrounding unusable, and they have had to dig a bore well a water table and fields is completely contaminated long way from the village for their drinking water. Effluent at Upal gully with industrial effluent on a huge scale and has No locals are employed in the Hetero factory here been for decades. The growth of the pharmaceutical despite assurances they would be at the time of industry in the area greatly exacerbated the land purchase. The plant has informers within the privately owned land, into which effluent pollution other industrial areas at Nacharam and Mallapur, problem. Villagers can no longer drink from the village, and villagers who complain are threatened leaks from both sites. The landowner will reportedly and joins with the waste coming from Jeedimetla 50 51 lake, from their wells or even from the bore well by local police who are complicit with the plant not act against the companies as he is involved in a and the pipeline, entering the STP, and ultimately which was provided for safe drinking water. They owners. Between 50-100 tankers enter the plant business arrangement with them. being discharged into the Musi. It is supposed to be have very limited weekly access via tap to a pipeline each day, each carrying approximately 5,000 litres treated before joining the main sewage network, connected to municipal water sourced from the of water. Yet only 1-2 tankers leave the site per Downstream of Amberpet Sewage Treatment but the nearby treatment plant is only designed Manjeera river but this is intended for urban month carrying wastewater for treatment at the Plant: The investigation team visited locations for sewage treatment, not chemical effluent. The Hyderabad, is already under great pressure, and CETP. This is a large discrepancy, by no means fully downstream from the discharge point of the pollution control board have insisted that the cannot be spared in any great volume. accounted for by evaporation processes. A source Amberpet STP on the Musi River to gauge the effluent is domestic detergent but informants told the investigation team that between Hetero I impact of the pollution on local communities. report that the white foam on the surface has been Herds of buffalo and goats graze the surrounding and another plant called Horner Labs is a tract of seen to reach 30 feet high at midnight on some land, but very little can be grown since the soil At Upal, a municipality located to the east of occasions, which is an unusual time for domestic is so toxic. An informant told the team of an Hyderabad, high levels of what looked like chemical waste discharge or detergent to appear. The nallah incident (undated) when a large chemical dump effluent were observed being discharged from flows down into the Hussein Sagar lake then nallahs had entered the lake, and buffalo who were in the a stream into an open nallah which heads down lead out from the bottom of the lake towards the water emerged with their skin hanging from their towards Amberpet STP. This effluent emanates from Amberpet plant and the river. Much of the flow bodies. It should be noted that the area was deemed actually bypasses Amberpet and is discharged “critically polluted” on the Central Environment directly into the Musi. Pollution Index (CEPI) assessed by the Central Pollution Control Board (CPCB) up until the early Next to the Marriott Hotel, adjacent to the bottom 2000’s, then was de-notified around 2009 when of the Hussein Sagar lake, construction work was its overall score fell below 70, then re-notified underway at an intersection where water flowing when the score rose in 2013 to 76 at a time when from the lake joins an open nallah again heading pharmaceutical pollution was greatly increasing in towards the Musi. At this point the flow is joined by the Industrial Area. an underground pipe, the contents of which look very much like chemical effluent, with black tarry Village informants reported to the team many sediment. Once again, chemicals from industrial serious health issues, including women having areas are apparently being mixed in the open with the miscarriages, skin disorders, cancers, and intestinal Apparent effluent pollution on the Musi River Effluent flowing down from Hussein Sagar Lake, which lies behind the visible bridge domestic sewage system and flowing untreated either Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

into the Amberpet STP or being discharged directly turned their crops over to rice visible on the river surface mount up 10-20 feet campaigning by local activists the companies into the river. paddy which is deemed more (3-6 metres) higher than the river, obscuring the delivered free tanker water, but this contribution lucrative. existing road bridge - drivers are unable to see the (and admission of responsibility) faded once media Edulabad Village is approximately 20 km road and have driven off into the river, resulting in attention moved on and now the villagers have downstream, and since the plant was opened villagers fatalities. to buy most of their water at a cost of Rs. 20 for have faced enormous pollution and destruction of 20 litres. An informant told the team that buffalo livelihoods both fishing and farming, as well as major A farmer interviewed for the investigation said Pedhagudam Village is 12 km further downstream, are poisoned and produce low levels of milk which health problems. Fish in the village tank regularly die that buffalo no longer mate naturally, and have to local informants spoke of (and showed) skin tastes and smells bad, so they have problems when chemical effluent flows into the water body. be artificially inseminated to produce young - this conditions caused by working in the water in their selling it. The animals stop yielding completely very is very costly for the farmers as it may take 3-4 paddy fields. The water table is totally contaminated early compared to the norm. Villagers also report The Musi River historically attempts to be successful. The milk produced by the and all crops are affected: rice is blackish in colour the same health problems reported by the other animals fetches a very low price as it smells bad, and spoils very fast (if cooked in the morning it will communities the team visited. was seasonal and rain-fed, and and animals often give as little as 3 litres (the norm be bad by the afternoon). The village has to have Mutyalammapalem Village: This village is situated irrigated approximately 24,000 is 10 litres). Other livestock also face health issues drinking water delivered by tanker and has to pay at the southern end of a small coastal bay. Around hectares of adjacent farmland, but due to contaminated water and feed. for it. One informant has paddy fields on the river the centre of this bay, the Jawaharlal Nehru Pharma now due to the massive increase Children have eyesight problems, old and young bank. He says he regularly observes tankers coming City CETP pipeline discharges into the sea. The people have joint pains and skin diseases, people down from the industrial areas illegally dumping pipe of the thermal power station discharges at in waste water volume (up 80% and animals have frequent diarrhoea. Rice yields straight into the river (i.e. bypassing the CETP). the northern end of the bay. The nallah from the 52 53 to 700 million gallons/day) being may increase (due to fertiliser and pesticide Once, some of the farmers apprehended a group Pharma City also ultimately discharges in this area, added to the fow by Hyderabad contamination) but the weight of the rice is down by of tanker drivers who were dumping and brought having been joined by 6 other nallahs along its route 50% and the quality is very poor. The investigation them before the police. Nothing was done, they down to the sea. were released and the farmers themselves were threatened by the police. The community is dependent on fishing, men fish at sea on small boats, and women dry and sell the In addition to the pollution entering the sewage fish at the market. The team was told that the system, many informants report widespread villagers’ livelihoods have been devastated by dumping by tankers at roadsides, into open nallahs, ongoing chemical pollution of the coastal waters and other water bodies, and a doctor told the team over the last ten years. The fish stock has decreased of many cases he personally treated that were dramatically, and the quality of fish caught has directly linked to chemical pollution. These include also deteriorated. One fisherwoman told the team menstrual problems, miscarriages, low fertility, that the fish catch was often blackish in colour and birth abnormalities, organ failures, skin problems, smells and tastes bad, so that it is very difficult high levels of heavy metals present in breast milk of to sell - and frequently the entire catch has to be mothers, fluoride poisoning causing bone defects thrown away to rot since nobody will purchase it. and many other illnesses. They themselves still eat the fish as they have no other option and there are health issues throughout

Women working in paddy irrigated by the polluted Musi River b. Visakhapatnam and surrounding areas the village.

Uracheruvu lake, Tanam Village: A nallah from Tikkavanipalem: The team observed the area the Jawaharlal Nehru Pharma City feeds into this of bay where the CETP pipeline discharges. city and the Amberpet Sewage team crossed the Musi River downstream, and village water supply and has apparently completely Although the pipe is buried underground until it Treatment Plant, it has become a observed a new bridge under construction contaminated it. In addition to this, tankers from is out to sea, its route is indicated with concrete perennial river, irrigating 150,000 approximately 40 feet (12 metres) higher than the the city have reportedly dumped illegally directly blocks used to weigh it down. The opening of existing one. This is being built because at certain into the lake and onto surrounding land and nallahs. the pipe lies several metres out in the bay and is hectares, so most farmers have times the piles of white foam chemical pollutant The water is now poisoned - initially after much visible during very low tides around October. An Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

informant told the team that there are often surrounding areas. particular concern to many of our interlocutors was institutions, and the political space for public chemical dumps through the pipe on a Monday the deepening of the nexus between politicians and debate is being closed down. Local NGOs working evening, because traditionally fishermen do not D. CONCLUSION the industry since Prime Minister Narendra Modi’s on environmental issues face problems if they fish on a Tuesday as they attend the market, so will The overall picture in the valleys and agricultural accession to power. communicate with internationals, and risk having not be out at sea to observe the yellow effluent lands surrounding industrial areas in Hyderabad their assets frozen if th ey are deemed to be and the immediate effect on fish; by the time is a bleak one, of communities which have been Under a mantra of “ease of doing challenging government/industry interests. The they commence fishing again on Wednesday the industries themselves operate private security blighted by pollution for thirty plus years, since business” Modi has been heavily effluent has diluted into the sea. It is also common, Indira Gandhi’s first welcoming in of heavy firms (as experienced directly by the investigation reportedly, for dumps to be made under the cover industry to the area. There is no doubt that the promoting India as a location for team) and intimidate and threaten local villagers of cyclone and other adverse weather conditions pharmaceutical industry has played its role in the outsourcing of polluting industries who attempt to call them to account for polluting during the year. mounting pollution crisis, confirmed by pollution which the West would prefer not activities. The police also seem to be complicit with the industry, as backed up by several first-hand index readings which have steadily risen over to host within their borders, and Pydibhimavaram Village: Villagers are using the the last 10-15 years, during which the bulk drug accounts. lakes for fishing and washing. To the side of the industry has boomed in the region. The picture all regulatory bodies have had Aurobindo Unit XI plant is a wide rain-fed river in Visakhapatnam is very similar although the their teeth drawn, either by having The overall impression gained from interlocutors basin, currently dry but full during the monsoon. was a pessimistic one. It is felt that the government polluting industries are of more recent vintage, and pressure applied from above, or by An informant said that in the monsoon the river problems mostly started in the early 2000s. In the intends to continue to pursue a pro-industry line becomes full of chemical effluent leaching from being ‘bought’ by the industry. regardless of human, social or environmental costs, 54 entire area visited, the team did not see one single 55 the plant, that local villagers are suffering with village which actually had its own safe drinking and will turn a blind eye to the manipulation or major health problems including blood disorders of water supply - all of them had to buy water from Heedless of their citizens’ distress, the state overriding of regulatory legislation by industry, in the children, weakness and anaemia, that livelihoods tankers or other sources. This also has a knock-on governments of Telangana and Andhra Pradesh are service of profit-driven production. have been destroyed by the pollution, and that impact on agriculture, especially as food production keen to promote further industrial development the plant ignores all representations from the is competing with the pharmaceutical industry for in the region. A huge 11,000 acre industrial park community. water and land. dedicated to pharmaceutical manufacturing, the An additional concern expressed was that a nuclear ‘Hyderabad Pharma City’, is planned in the city’s plant has been approved for construction 2 km away Rangareddy District.229 Local inhabitants and and will come on-stream in 1-2 years. It is feared The pharmaceutical companies appear to act with campaigners have expressed profound disquiet that pollution discharge from that plant might more or less total impunity. The investigation team about the plans, not least because 6,000 acres of combine underground with chemical pollution was told time and again of specific examples where the area are currently forested.230 At a roundtable from this site to create further toxic and dangerous companies had clearly polluted, communities tried on ‘Pharmacy Implications on Environment’ in compounds. Although there have been some small to take action and were ignored, and their claims October 2015, distinguished Supreme Court localised studies of health impacts, there has been denied. Even when the Pollution Control Board itself lawyer M.C. Mehta stated his opposition to the no systematic wide-scale sampling and testing in took action (a rare occurrence since all information project, explaining that the new development had this area. suggests that it is highly connected to the industry the potential to become “another Patancheru.” Mr it is intended to police), then their prosecutions and Mehta further claimed that “foreign companies were Rajiyyapeta Village: The villagers suffer with fines did not act in any way as a deterrent, given cleverly exploiting Indian resources and polluting the the usual severe health problems. There has been that the companies in question paid the (usually water and land [in India] while keeping their lands a marked increase in cancer incidence over the derisory) fines and continued to pollute in the same safe and clean.”231 The Bulk Drug Manufacturers ten-year period. All surrounding ground water is manner. Association is also urging the government of Andhra contaminated and village wells are undrinkable. The Pradesh to allot between 6,000 and 10,000 acres for villagers used to fish in the lake but all the fish have Activists have tried to bring numerous cases before the establishment of two industrial states between died. A nallah flows into the lake from the west, and India’s Supreme Court and Green Tribunal, but Visakhapatnam and Kakinada and Naidupeta near is itself already polluted, reportedly by illegal tanker face enormous problems since these cases drag Nellore exclusively for pharmaceutical units.232 dumping of effluent upstream. Villagers report on for years and have to be personally funded, to frequent illegal dumping by company tankers in the avoid accusations from the industry of ‘bias.’ Of There is little space for dissenting voices within Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

Aurobindo is one of India’s largest vertically integrated Dr Reddy’s supplies pharmaceutical companies. Based in Hyderabad, it exports to antibiotics to the over 150 countries around the world and more than 86% of its U.S. and UK market revenues are derived from its international activities. Aurobindo supplies antibiotics to the U.S. and UK market and has operations in several EU Member States.”

Aurobindo has imported APIs from polluting factories in China run by CSPC, NCPC, Harbin Pharmaceutical Group and Sinopharm. It has a Teva is listed by Lee Pharma and 10% stake in Sinopharm’s MSN Laboratories as being a client. Datong facility. Both companies operate factories in the Patancheru-Bollaram cluster

In 2009, Pfizer licenced a selection of generic Aurobindo drugs from Aurobindo as part of the U.S. supplies company’s “grand plan” to expand into antibiotics to generics with lower manufacturing costs. The NorthStar Rx, a deal failed when the U.S. FDA suspended 56U.S.-based imports from Aurbindo’s Unit VI in Hyderabad 57 generic drug company which is a subsidiary of McKesson.

Jawaharlal Nehru Pharma City (JNPC) lists U.S. giant Mylan, Pfizer subsidiary Aurobindo and Hetero have Hospira, Japan’s Eisai, Germany’s subsidiaries in Malta. Aurobindo Pharma Zell and India’s own SMS describes Malta as a “gateway” Pharmaceuticals as operating in its to the European market ‘Special Economic Zone’ (SEZ). Other clients include Aurobindo, Hetero and Lupin Laboratories. India's place in the global pharmaceutical supply chain Woman uses polluted well water for livestock at Tanam Village Impacts of pharmaceutical pollution on communities and environment in India

PART 4 - Solutions & call to action

This report has presented evidence of prolific and other avenues must be pursued in order to put a systematic pollution at effluent treatment plants stop to the shocking and irresponsible behaviour and pharmaceutical production units in Telangana which has been described. and Andhra Pradesh, many of which are acting as contract manufacturers for some of the world’s With this in mind, a series of recommendations for largest drug firms. While the industry’s negative action are set out below. Key actors with the ability environmental and health impacts are all too clear, to change the situation are: the pharmaceutical the supply chain which brings the drugs from industry; institutional investors seeking to manage factory to pharmacy shelf is virtually impenetrable, their assets responsibly; and policymakers in and mapping the relationships between major Europe, the U.S. and other regulated markets, foreign buyers and their suppliers is an uphill given that they already have power under the Good struggle. This is problematic: lack of transparency Manufacturing Practices framework to regulate the within the sector hinders external oversight of manner in which pharmaceutical products sold on companies which are failing to honour the trust their markets are produced, and that this framework bestowed upon them by the general public to could conceivably be extended to incorporate protect their health. environmental criteria.

With many of the polluting companies profiled in 58 59 this report manufacturing antibiotics, what some I.RECOMMENDATIONS FOR INDUSTRY might see as a localised (albeit horrific) problem for people on the ground in India becomes a truly global In comparison with other sectors, the issue, in that antibiotic manufacturing discharges pharmaceutical industry has not come in for much have been identified as one of the vectors for the scrutiny when it comes to environmental standards development of AMR. The contamination of major and supply chain transparency. The glaring lack of water bodies highlighted here, including the Musi transparency with regard to the identity of their River and the Bay of Bengal, should also give rise to suppliers enables Western brand names to hide considerable concern around the world, given the behind obscure production plants in India and China grave threat water-related risk, including pollution, which pollute in impunity and with little concern for poses to human society and economic activity. reputational damage.

Against this backdrop, the impunity with which However, with a mounting body of research on the drug companies are allowed to operate in Andhra detrimental impacts of pharmaceutical pollution, Pradesh and Telangana appears perverse. However, outsourcing production to unscrupulous suppliers Prime Minister Narendra Modi’s avowedly ‘pro- will carry with it increasing reputational risk for the business’ agenda233 makes it extremely unlikely that major players in the industry. This shift has already the Indian government will take on the country’s been experienced in other sectors, such as the powerful drug industry under his tenure. The long textiles and electronics industries. This is especially and largely fruitless catalogue of attempts to prevail relevant at the present point in time, when upon the central and state-level pollution control awareness of the threat posed by AMR has been boards and the Supreme Court demonstrates that acknowledged by governments and as the industry even where efforts to extract justice and force seeks the allocation of considerable sums of money the regulators into taking action are successful, for research into new categories of antibiotics.234 decisions can be quickly reversed, leaving the drug In January 2016, more than 80 pharmaceutical manufacturers high and dry. In the absence of companies signed a declaration calling for more genuine political will in India to resolve this crisis, Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

235 government funding to develop new antibiotics. progressive companies within the industry that partners have yet to receive a direct response measure with regards to AMR could be to turning a blind eye to pollution in the supply chain from either Pfizer or Teva, the companies implement a maximum limit for concentrations While developing new antibiotics is unacceptable and measures are being taken to specifically named in the ‘Bad Medicines’ of common antibiotics in water, which was 239 240 242 is of huge importance, proper address it. However, while some companies have report.” explored in a recent study. The study assumes put in place monitoring of their own supply chains that the level at which these antibiotics have no stewardship of existing antibiotics and education programmes for their suppliers, In 2006, the pharmaceutical industry also set up effect on the environment is 10 per cent of this is a no-regret option and one which are aimed at reducing the negative impacts of a voluntary program called the Pharmaceutical maximum limit and proposes that this 10 per where the global pharmaceutical production, collective efforts have so far been made Supply Chain Initiative (PSCI)241, supported by cent level could be considered a reasonable limit at a very general level and indicate that the industry major multinational companies, such as Pfizer, for the concentration it is acceptable to find in industry has an important role to as a whole is not taking the problem seriously Astra-Zeneca, Roche and NovartisN. The PSCI’s a particular body of water. Whether production play. enough. This lack of urgency was demonstrated first move was to establish the Pharmaceutical facilities comply with this maximum level recently in the underwhelming response provided by Industry Principles for Responsible Supply Chain should also be monitored in the surrounding There are a number of measures the pharmaceutical three major European pharmaceutical associations Management, covering five areas including the water bodies. Variations of this approach industry can take to put a stop to the rampant to questions from the environmental and public environment. The Principles, which PSCI members could also be used for other pharmaceutical pollution witnessed in outsourcing destinations such health NGOs which make up the European Public encourage their suppliers to commit to and substances. as India. Companies have a clear responsibility to fix Health Alliance (EPHA) and SumOfUs regarding support, specify that: “Suppliers shall operate in an the situation in accordance with the ‘polluter pays’ pharmaceutical pollution and transparency in their environmentally responsible and efficient manner to 2. Embrace full transparency and promote the principle, and a blue print setting out how they supply chains, as summarised on EPHA’s website in minimize adverse impacts on the environment.” transfer and adoption of cleaner production 60 61 can do this is provided below. As the AMR review December 2015: technologies and pollution prevention policies stated in its watershed report on the environmental Unfortunately, voluntary initiatives lack teeth, across the supply chain. The PSCI guidelines on dimension of AMR at the end of 2015, “[t]his needs “In an open letter published by EFPIA, transparency, metrics, as well as clearly defined environmental protection say that “[s]uppliers to be viewed as a straightforward issue of industrial AESGP and EGA, representing the R&D, non- penalties for non-compliance. All of this make it shall have systems in place to ensure the pollution, and it is the responsibility of all actors in prescription and generic and biosimilar difficult to assess just how effective they are and safe handling, movement, storage, recycling, the supply chain to ensure that industrial waste is manufacturers in Europe, the industry expressly indicate that it could just be industry greenwashing. reuse, or management of waste, air emissions treated properly as a matter of good manufacturing states that companies “’take seriously any However good the supplier management policy and wastewater discharges.” These principles practice.”236 negative environmental impacts that [their] looks on paper, there needs to be enhanced should become an industry standard and be duly products and manufacturing might have’’, and transparency to establish how a company’s supplier and transparently enforced for all actors in the Many stakeholders, including governments,237 that they “support immediate action and global relationships are working in reality to enable supply chain. investors, and industry insiders are calling for solidarity’’ when it comes to tackling the AMR policymakers and other stakeholders, including the greater traceability and transparency in the problem. It also affirms their commitment investment community, proper oversight and the 3. According to the AMR review, another way of pharmaceutical supply chain as well as the inclusion to work with “governments, regulators and opportunity to perform due diligence based on hard exerting pressure to achieve cleaner supply of environmental standards in the GMP framework. international organisations to raise standards’.’ facts. chains would be for major buyers of generic There are examples of other industrial sectors with While EPHA welcomes these statements, the fact antibiotics (such as governments) to factor significant outsourcing where firms are opening remains that pharma factories, which tend to be In order to drive better production processes, appropriate management of environmental their supply chains up to greater scrutiny. These located in third countries, are able to continue we recommend the following actions be taken considerations into their procurement companies’ approach could present a guide for the polluting the environment due to blatant by responsible companies and major buyers of decisions or integrate these considerations pharmaceutical industry. For example, electronics regulatory gaps in those countries, where pharmaceuticals: into reimbursement appraisals for generics, giant Apple, whose own supply chain has been production is about producing cheaply and in a process currently driven predominantly by subject to intense scrutiny over working conditions huge quantities. The industry must urgently 1. Demand all suppliers have in place effective price. In either case, effective reporting and and environmental pollution at its Chinese factories, introduce transparency in their global supply measures to prevent and control pollution and oversight of the company’s waste management has put in place measures to increase oversight of chains – indeed as the electronics and textile to improve waste management standards. This and that of their suppliers would be key, its global operations and open up its supply chain to industries were forced to do by public outcry shoul include dedicated waste water treatment something that is already a feature (and a enhanced external oversight238. following deadly scandals. plans and other measures to minimise waste challenge) in many industries, including food Despite the letter from the industry federations, from production processes. One important and clothing production.243 There is already a recognition from the more it is however remarkable that EPHA and our

N. The full membership list is Abbvie, Allergan, AstraZeneca, Baxalta, Baxter, Bayer, Biogen, Boehringer-Ingelheim, Bristol-Myers-Squibb, GSK, Johnson & Johnson, Lilly, Mallinckrodt Pharmaceuticals, Merck, Novartis, Pfizer, Roche, Takeda, West. Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

II.RECOMMENDATIONS FOR INVESTORS produce a ‘strategic approach’ to pharmaceuticals of inspectorates in the field of medicinal borders, legislation that only targets European in 2016, and has commissioned several studies to products.” 247 GMP can be perceived as “globally factories would not reach its ultimate goals of The responsible investment community can play assess their impact in anticipation of this. These will accepted and applicable standards for ensuring eradicating environmental damage and the health a vital role in holding pharmaceutical companies add to the body of research informing action from that products are consistently produced and risk that pollution from manufacturing entails. to account and putting pressure on the industry regulators, not just in Europe, which is often seen controlled according to quality standards.”248 According to the Swedish MPA, the unique thing to stamp out pollution in its supply chains. Key as a frontrunner when it comes to environmental about existing regulations on manufacturing and demands from investors which would bring about a regulation, but also in countries such as the U.S., 2. If GMP are amended to include environmental GMP is that: “they also impact third countries in change of culture within the industry include: Canada and Australia. criteria, this would have impacts well beyond that manufacturers wishing to export medicinal EU borders. As we have seen in this report, products into the EU are obligated to comply with - Require full disclosure from pharmaceutical An important contribution to the debate on how several of the polluting factories have been regulations for production that apply within the companies in their portfolio regarding the to address pharmaceutical pollution in the EU inspected and have received approval from EU. By adding regulations on environmental control identity of suppliers they source their APIs has come from the Swedish government, which European medical agencies, the U.S. FDA or among production regulations, they have an impact and other drug products from; in 2011 commissioned a report from the Swedish the WHO. According to the Swedish MPA, an on third countries as well.”250 Medical Products Agency (MPA)244 to investigate effective and well-functioning inspection system - Require that pharmaceutical companies how to strengthen environmental requirements is another advantage of placing environmental The AMR review went further in its December in their portfolio have in place a detailed for drug manufacturing. The MPA proposed that requirements within the framework of GMP. No 2015 report by recommending that GMP could supplier responsibility programme with environmental criteria should be included in new system would have to be set up, instead potentially set maximum limits for concentrations measurable environmental targets which the European GMP that govern production of inspection protocols would have to be amended of common antibiotics in water, as recommended 62 63 provide an objective benchmark with which pharmaceutical products that can be sold on the to include internal or external environmental by a recent study (see Industry Recommendation to rate and compare supplier performance; EU market.245 Individual Member States cannot go expertise. 1 above). They acknowledge that more debate beyond EU medical legislation and adopt stricter is needed on how these targets should be set - Require that all pharmaceutical standards by themselves, because the legislation is GMP are set out in several EU Directives and and implemented, however they also see GMP or companies in their portfolio blacklist any based on the internal market provisions of the EU RegulationsO which stipulate that only active national regulations that deal with hazardous waste, pharmaceutical suppliers which do not Treaty, which require harmonization of legislation substances that have been produced in accordance as the most appropriate place to include these comply with the standards set out in the across the EU. However, if a Member State were to with detailed guidelines for good manufacturing measures. Additional measures from the EU and supplier responsibility programmes. raise a specific problem on public health in a field practice can be used for starting materials for other developed markets could also be to demand which has been the subject of prior harmonisation medicines authorised and sold on the EU market more transparency in the pharmaceutical supply III.RECOMMENDATIONS FOR POLICYMAKERS measures, the European Commission is obliged to or for the APIs that are imported to the EU. Under chain or to black list factories that emit significant examine whether to amend the legislation. This the medical products directives, manufacturers’ pollution from which pharmaceutical buyers should Policymakers have a very important role to play on section will focus on how this could be done in the compliance with regulations for production and avoid importing. the issue of pharmaceutical pollution. International EU legislative context, but it is important to bear GMP is regularly inspected by the competent and regional regulators (such as the EU) are in mind that such a reform would be transferable national authorities. If there are deficiencies in IV. OTHER ACTIONS AT THE INTERNATIONAL increasingly focused on adopting a “one health” to other markets and would also have impacts well compliance with GMP, these authorities issue LEVEL approach to public health in recognition of the fact beyond EU borders for two reasons: a so-called “non-compliance GMP certificate” that many factors affect human health and that and disseminate this information to all Member The Strategic Approach to International Chemicals environmental factors, such as pharmaceutical 1. GMP are largely harmonised across the world. States. Inspections are performed both within and Management (SAICM) was established to support pollution, and especially its contribution to The US also has its own GMP legislation, outside the territory of the EU and a Marketing the achievement of the goal agreed at the 2002 AMR, cannot be overlooked. The impact of as does the WHO whose GMP standard is Authorisation may be revoked if GMP are not Johannesburg World Summit on Sustainable pharmaceuticals on the environment is an emerging incorporated in the national legislation of complied with.249 Development of ensuring that, by the year 2020, issue in that much of the science is relatively recent over 100 countries.246 Another organisation chemicals are produced and used in ways that and many policymakers are not yet fully aware of working towards harmonisation of GMP is the Given that the vast majority of pharmaceutical minimize significant adverse impacts on the its effects. Nevertheless, there is more than enough PIC/S scheme, whose mission is “to lead the products and APIs are produced outside the EU’s environment and human health. At its fourth evidence pointing to the impact of antibiotics international development, implementation and and other pharmaceutical substances on the maintenance of harmonised Good Manufacturing O. These are: Directive 2001/83/EC of 6 November 2001 on the Community code relating to medicinal products for human use, as amended; environment to justify action. The EU is slated to Practice (GMP) standards and quality systems Regulation (EC) No 726/2004 of 31 March 2004 laying down Community procedures for the authorisation and supervision of medicinal products for human and veterinary use and establishing a European Medicines Agency, as amended; Directive 2001/82/EC of 6 November 2001 on the Community code relating to veterinary medicinal products, as amended and currently under revision (see proposal was sent to the European Parliament and Council here: http://ec.europa.eu/health/veterinary-use/rev_frame_index_en.htm) Impacts of pharmaceutical pollution on communities and environment in India Impacts of pharmaceutical pollution on communities and environment in India

1. The Guardian, 07.04.2015, Half of India’s rivers are 18. World Health Organisation, April 2015, Fact Sheet No polluted, says government report http://www.theguardian. 194 – Antimicrobial Resistance, http://www.who.int/ com/world/2015/apr/07/half-india-rivers-polluted-new- mediacentre/factsheets/fs194/en/ government-report 19. World Health Organisation, April 2015, op. cit. 2. PMLiVE, 24.03.2014, Cleaning up Pharma’s supply chain, 20. AMR Review, December 2014, Antimicrobial Resistance: http://www.pmlive.com/pharma_news/cleaning_up_the_ Tackling a Crisis for the Health and Wealth of Nations, supply_chain_555394 http://amr-review.org/sites/default/files/AMR%20 3. The Guardian, 07.06.2014, Europe’s vultures under threat Review%20Paper%20-%20Tackling%20a%20crisis%20 from drug that killed millions of birds in Asia, http://www. for%20the%20health%20and%20wealth%20of%20 theguardian.com/environment/2014/jun/07/european- nations_1.pdf vultures-threat-diclofenac-vets-spain-italy 21. 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Health Care Without Harm & UIC School of Public Health, Antimicrobials%20in%20agriculture%20and%20the%20 2010, Minding the Gap: Research Priorities to Address environment%20-%20Reducing%20unnecessary%20 Pharmaceuticals in the Environment https://noharm. use%20and%20waste.pdf org/sites/default/files/lib/downloads/pharmaceuticals/ 24. Van Boeckel et. Al (2015), quoted in CDDEP, 2015, Minding_the_Gap_Research.pdf State of the World’s Antibiotics 2015, http://cddep.org/ publications/state_worlds_antibiotics_2015#sthash. 64 7. Murray-Smith, R.J., Coombe, V.T., Grönlund, M.H., 65 meeting in Geneva in 2015, in the margins of steeply in the coming decades, rapid and decisive Waern, F., Baird, J.A., 2012. Managing emissions of BmYsUzGz.dpbs active pharmaceutical ingredients from manufacturing 25. Van Boeckel et. Al (2015), op. cit. the International Conference on Chemicals action is required to nip what is still a relatively facilities: an environmental quality standard approach. 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