Biocon hires law firm for governance review after CBI arrests

Bid to strengthen compliance, governance practices across Biocon group entities

June 30, 2022 08:09 pm | Updated 08:09 pm IST - New Delhi

Drugmaker Biocon Ltd. has engaged an external law firm to do a comprehensive review of its governance processes involving consultants and vendors following the CBI making a few arrests over alleged bribes paid to a government drugs controller.

Sources with knowledge of the matter said the review is part of the management's reiteration of its commitment to strengthening compliance and governance practices across Biocon group entities.

The company already has a strong code of conduct and an anti-bribery corruption clause in its contracts with all its vendors.

The management now plans to step up its vigilance and with the help of an external law firm look to plug gaps and strengthen the governance system, they said, declining to identify the law firm.

The CBI on June 20 apprehended Joint Drugs Controller S. Eswara Reddy for allegedly receiving a ₹4 lakh bribe. The bribe was allegedly paid by Dinesh Dua, Director at Synergy Network India Pvt. Ltd., for getting a phase-three clinical trial of Insulin Aspart injection of Biocon Biologics waived.

The CBI also named Guljit Sethi, Director, Bioinnovat Research Services Pvt. Ltd. - a Delhi-based consultant, providing consultancy services to pharma companies, including the likes of Novartis, Daichi Sankyo, Piramal, Tata Health and GVK Bio.

A day later, the CBI also arrested L. Praveen Kumar, Associate Vice President of Biocon Biologics from Bengaluru.

When contacted, Biocon's spokesperson vehemently denied all allegations, saying the firm's product approvals are backed by science and clinical data.

"Our biosimilar Insulin Aspart has undergone full global clinical trials and is approved by global regulatory agencies like EMA (European Medicines Agency) and Health Canada," the spokesperson said.

The waiver for the Phase-3 trial sought by the firm run by Kiran Mazumdar Shaw, who a couple of months back had flagged concern on the growing religious divide in Karnataka following the hijab row, was in line with the one that all multinational companies routinely do.

Indian regulatory guidelines provide a framework for waiver of Phase-3 clinical trials for a globally approved product based on a commitment to undertake a Phase-4 trial in India, the design of which should be approved by the Central Licensing Authority, the spokesperson said.

"In line with the above regulations, Biocon Biologics presented a proposal for import and marketing of Insulin Aspart with a waiver of Phase-3 clinical trial in India. The company presented a detailed proposal along with CMC, pre-clinical and clinical data," the spokesperson said.

The Subject Expert Committee (Endocrinology and Metabolism) in its meeting held on May 18, 2022, at CDSCO, New Delhi, noted that Biocon Biologics has conducted Phase-1 and Phase-3 trials with Aspart in Germany and USA, respectively, and based on the results of this global trial, Biocon Biologics product Aspart has been granted marketing authorisation by EMA and Health Canada.

After detailed deliberation, the committee recommended for grant of permission to import and market the drug with a waiver of Phase-3 clinical trial in the country with the condition that the firm should conduct a Phase-4 clinical trial in India, the spokesperson said.

Phase-4 clinical study is a post-marketing surveillance trial, which can be done only after the product is launched. Hence, the Phase-4 data cannot be presented prior to going to market.

"Biocon Biologics follows due regulatory process for all our product approvals by the DCGI. The entire application process in India is online and all meeting minutes can be found on the website of the Central Drugs Standard Control Organization (CDSCO)," the spokesperson added.

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