A tale of two MNCs and two regulators

The FDA Bhawan in Delhi seems to have shed its anti-foreign stand of three years ago. Will the soft touch work?

What’s common between Nestle and Johnson & Johnson? Well, other than being global majors in consumer-facing sectors, the two multinationals have made the Indian food and pharma regulators sit up. While these regulators share the same headquarters in New Delhi’s FDA Bhawan, they have dealt with the two groups rather differently, some three years apart, and how.

Food, especially noodles, is a touchy issue impacting millions, and therefore, the constituents of Nestle’s Maggi turned into a subject of a high-pitch battle. The alleged presence of lead and monosodium glutamate beyond permissible limits, as shown in various sample tests, did make it a case for a regulator. More than that, it was also about the time and the place and the people at the helm. The new government at the Centre, following the bitterly criticised policy paralysis of the previous regime, was bringing in changes thick and fast. In that setting, a regulator wanting to go all out to punish a foreign major for alleged adulteration in two-minute noodles may not have been out of place.

So, we had the then Food Safety & Standards Authority of India (FSSAI) CEO Yudhvir Singh Malik taking on Swiss major Nestle like there was no tomorrow. It was June 2015 and Nestle's chief executive at that point, Paul Bulcke, who’s now the group’s chairman, was summoned to FDA Bhawan in search of a solution. There was no meeting of minds on the safety of Maggi. Without wasting time, Singh’s team issued a hurriedly prepared order asking Nestle to withdraw all variants of Maggi noodles from the shelves across the country. This coincided with a Nestle press conference, also readied by company honchos through a sleepless night, anticipating a ban. At the conference, Bulcke maintained Maggi was safe to consume but announced that the company would voluntarily recall the product as trust was more important than anything else.

Soon after, the 1984 batch Haryana cadre IAS Malik was shifted to Niti Aayog, in a sudden posting. Some said there was ‘’over-regulation’’. But with the Maggi cloud lifting over a period of time, Malik has been back in action, now fast-tracking road construction as secretary, roads and highways, far removed from the world of fast food. As for Nestle, its India unit has bounced back since the face-off, but not before it had to destroy some 38,550 tonnes or 540 million packets of its two-minute noodles due to the ban.

Cut to the issue of faulty hip implants by a subsidiary of American major Johnson & Johnson. This time, the matter is playing out rather quietly in the corridors of the FDA Bhawan. In terms of damages caused, there’s much evidence of years of agony for many patients who have come out in the open but there’s been no compensation yet from the company though it has paid up hefty amounts in the US. An expert committee report recommending compensation to those who’ve undergone faulty implants (before 2010) is yet to be acted on, other than setting up of panels recently to identify patients and determine their compensation. Officials at the Drug Controller General of India (DCGI) cite the weak legal framework as a hurdle. Basically, the law is silent on prosecution or compensation in a case like this.

S Eswara Reddy, who was appointed DCGI chief in February, doesn’t want to say J&J is taking up all his time. But he looks busy tracking the meetings and developments around the issue, which have gained momentum several years after a global recall.

Unlike the noisy rush at the FSSAI during the Nestle controversy of three years ago, the other part of the building that houses DCGI is calm even as meetings linked to the faulty implants and tracking down of patients go on. In contrast to the Maggi episode, there’s been no summoning of global executives of J&J at the FDA Bhawan. Reddy, a doctor and perhaps no less a doer (going by the recent mega ban of more than 300 combination drugs in one go) than Malik, has confirmed that J&J CEO Alex Gorsky, hasn’t visited the DCGI office.

There’s confidence at the regulator’s office that patients will be compensated by J&J. If not, there could be further action like moving court.

At this point, the FDA Bhawan, though being showcased as a destination to encourage startups in the healthcare sector and a hub to promote Make in India, seems to have shed its anti-foreign stand of three years ago. Will the soft touch work?