A deception most foul

Ranbaxy's fraudulent practices may have jeopardised millions of lives in India, Africa and the U.S.

May 26, 2013 09:24 pm | Updated December 04, 2021 11:19 pm IST

Illus: for TH_business page

Illus: for TH_business page

Exactly two weeks ago, the pharmaceuticals industry was rocked by revelations that one of the world’s largest generic drug manufacturers, Ranbaxy Laboratories, pleaded guilty to seven federal criminal charges stemming from its fraudulent production practices dating back to 2008, and agreed to pay U.S. regulators $500 million in fines.

Much has since been said about Ranbaxy’s attempts to wipe the slate clean and institute rigorous testing standards across the board, including Ranbaxy CEO Arun Sawhney’s comment that the “announcement marks the resolution of this past issue,” and his company was “pleased to continue bringing safe, effective and quality medicines to market for the benefit of consumers in the U.S. and other parts of the world.”

Yet, what has been commented on far less after Ranbaxy’s deception came to light is that the lives of millions in India, Africa, the U.S. and elsewhere, who place their faith in national regulators, may have been jeopardised by their consumption of adulterated drugs.

Elusive answers

Why has Ranbaxy been permitted to continue its U.S. operations? Why have the former owners of the company, brothers Malvinder and Shivinder Singh, been permitted to walk free with the $2 billion that they made from selling Ranbaxy to Daiichi Sankyo in 2008?

Finally, few, if any, fingers have been pointed at regulators in India for permitting a fraud of such breathtaking magnitude to occur under their noses, and allowing the venality of a single corporate entity to bring disrepute to “third world generics.”

Three points

Let us set the record straight then, and consider three key facts about this episode. In doing so, we will borrow from one analytic account that has put truth-telling and hard research over sound-bites and euphemisms, Katherine Eban’s “Dirty Medicine” exposé in CNN Money/Fortune.

First, Ranbaxy’s fraud permeated multiple levels of the organisation and its perpetrators’ actions have created a veritable spectrum of health dangers for the public.

Whistleblower and former Ranbaxy Director Dinesh Thakur was a key informant in the case who gave evidence, for example, that Ranbaxy scientists were routinely directed to “substitute cheaper, lower-quality ingredients in place of better ingredients, to manipulate test parameters to accommodate higher impurities, and even to substitute brand-name drugs in lieu of their own generics in bio-equivalence tests to produce better results.”

That Ranbaxy lied to the U.S. FDA and other regulators frequently, and indulged in back-dating and forging data, Mr. Thakur found, was “common knowledge among senior managers of the company, heads of research and development, people responsible for formulation to the clinical people.”

Sometimes it appeared that sheer insensitivity to the plight of clients consuming their dubious products had crossed all bounds.

Another senior official who quit Ranbaxy after her attempts to get management to curb the malpractice failed was Kathy Spreen. On one occasion when Dr. Spreen mentioned her concerns about the quality of Ranbaxy’s AIDS medicines for Africa an executive reportedly said, “Who cares? It’s just blacks dying.”

Second, U.S regulators have at best achieved a pyrrhic victory as the deal they have struck with Ranbaxy still leaves consumers at risk, does not result in charges against a single company official.

Despite several incriminating prior investigations of Ranbaxy plants in Dewas and Paonta Sahib in 2006, the FDA “did nothing to stop all the drugs that were already on the market, drugs that had been approved, or applications submitted from other sites,” Ms. Eban notes.

In February 2009, the FDA finally deigned to punish Ranbaxy by imposing an Application Integrity Policy, which effectively closed down Ranbaxy drug applications.

Yet, in November 2011, it did not see fit to hold Ranbaxy back from selling generic Lipitor, the popular cholesterol-reducer.

Blessed with a six-month exclusivity grant from the FDA, Ranbaxy went on to rake in a cool $600 million through atorvastatin sales.

Ultimately, fate intervened and, in November 2012, Ranbaxy had to issue a massive recall notice for atorvastatin after glass particles were discovered in samples. The FDA backed off from any suggestion that it may have bungled its approvals process for Ranbaxy.

The India angle

Third, Indian regulators’ monumental failure to address Ranbaxy’s malaise early on has only been compounded by its unwillingness to take strong steps, even at this late stage, to bring the company to justice in Indian courts and save millions of its citizens from avoidable harm.

The media must share blame for not keeping the government’s nose to the grindstone. After Ranbaxy’s knuckles were notionally rapped earlier this month the press has displayed a staggering lack of interest in the core issue, the damage that Ranbaxy’s products have likely caused to Indians and the government’s role in that.

One major newspaper proclaimed, “The good news is that the company’s U.S. revenues, after dipping post-2008 for a couple of years, have now started recovering [sic].” Another declared, “Despite all the noise, the overwhelming majority of generic drugs are as safe and effective as their brand-name counterparts. Brand-name companies have also had their share of quality problems.” It is inconceivable with all the brouhaha about intensifying U.S.-India co-operation that New Delhi could have been entirely in the dark since 2006, when questions were first raised about Ranbaxy in the U.S. What were India’s Ministry of Health and Drug Controller General doing since then?

Even as late as last week, the Ministry’s Joint Secretary Arun Panda was on record saying “There is no order from the health ministry which has been issued to Drug Controller General of India to launch a probe against the company as of today.”

One can only wonder what further evidence against Ranbaxy officials hoped to obtain when one of them said, “Launching a probe against a company is a serious matter and a decision to that effect would be taken after due consideration of all aspects in the Ranbaxy case.”

Coming as it does after the Supreme Court’s landmark decision in the Novartis Glivec case, the government’s inaction hardly helps the cause of the generics business. Now we should expect influential branded-drug manufacturers to redouble their lobbying efforts to get lawmakers to block the rising tide of generic alternatives.

Similar to high-level corruption cases it may be that the government will respond adequately only when there is a surge of public protest. Otherwise, the next time you fall ill, the prescription may well be glass particles.


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