Ranbaxy’s fraudulent practices- A deception most foul #Healthcare #Pharma


A deception most foul

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

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.

narayan.thehindu@gmail.com

 

Indian pharma under the microscope


US FDA issues import alert on Wockhardt plant; drug makers fear being smeared by the transgressions of a few
Vidya Krishnan Mail Me |  C.H. Unnikrishnan
A file photo of the Ranbaxy headquarters in Gurgaon. Photo: Ramesh Pathania/Mint
A file photo of the Ranbaxy headquarters in Gurgaon. Photo: Ramesh Pathania/Mint
Mumbai/New Delhi: Malvinder Singh put forth a robust defence of his record at Ranbaxy Laboratories Ltd, which has come under a cloud after revelations of dodgy practices that had to be settled with the US Food and Drug Administration (FDA) through a $500 million payment.
While the company’s former chief executive officer (CEO) could be at the receiving end of a suit filed by Japan’s Daiichi Sankyo Ltd, which took control of Ranbaxy from Singh’s family in a $4.6 billion deal in June 2008, the contagion could spread to other Indian generics manufacturers as they come under increased scrutiny as more skeletons come tumbling out of the closet.
Indian manufacturers are afraid they may all get smeared because of the transgressions of a few, handing ammunition to companies in developed markets that would like to see more stringent controls on cheaper generic imports.
“They cannot pass the blame on to previous shareholders and management,” Singh said in an interview on Thursday. “I don’t think they (Daiichi Sankyo) have a case. There was absolutely no concealment on our part… They should be held accountable for destroying an Indian brand.”
The stock market is palpably nervous—shares of some Indian generics companies have fallen in the past few days, most particularly after a 15 May Fortune story that detailed the extent of possible wrongdoing at Ranbaxy.
Wockhardt Ltd is the first Indian company that’s said it faces FDA strictures since Ranbaxy made details of its case public on 13 May, when it said it had agreed to pay $500 million to settle civil and criminal charges of making fraudulent statements to the FDA and selling adulterated drugs.
The Wockhardt stock plunged 20% on Thursday after the FDA issued an import alert banning the import of products made at one of its plants at Aurangabad in Maharashtra. Chairman Habil Khorakiwalaconfirmed the development and said, “The company expects a financial impact of $100 million in this financial year due to the import ban of products from this plant.”
The plant manufactures sterile injectables as well as solid oral drugs. Wockhardt called off a media conference on Monday (27 May) to announce its fourth-quarter results, citing no specific reasons.
Wockhardt shares have declined 24.83% since the 15 May Fortune story, while the Ranbaxy stock has declined 11.11% in the same period.
Malvinder Singh refuted all allegations against his family and said the current owners of the company were responsible for the troubles they were facing.
“They are the owners and they have to be accountable for what they do. They spent money and did their diligence. They were keen to buy and they ran it to the ground,” he said. “I am not here to discuss whether Ranbaxy is doing well or not. I am here because of the allegations against my family. For the last many years, after I moved out of that space, I have not spoken on anything related to Ranbaxy or the industry.”
India’s pharmaceutical industry regulator meanwhile elaborated on the action it is considering against Ranbaxy. Drug controller general of India G.N. Singh said in an interview that all drug applications and dossiers filed by Ranbaxy as well as court documents presented in the US will be scrutinized to see if there have been any breaches of the Drugs and Cosmetics (D&C) Act.
“No one and no company is above rules,” Singh said. “We want companies operating in India to follow established procedures and will initiate necessary steps to ensure that.”
He said the regulator’s duty wasn’t to companies but to patients and to ensuring that they have access to safe drugs. “I want to assure people that the drugs currently allowed in the domestic market are of good quality and as per the D&C Act,” he said. “We have no reason to believe that the company has violated Indian laws. The matter, however, is currently being looked at.”
The drug regulator pointed out that India’s rules vary from those in other countries.
However, he said, “We export drugs to 218 countries and we are conscious of our responsibility towards health of all those who use Indian drugs. From time to time, we have put companies on alert and taken appropriate action against then when violations have been established.”
India’s image as a low-cost generic drugs manufacturer of high quality could get a beating in the wake of recent developments, said Tapan Ray, director general of the Organisation of Pharmaceutical Producers of India, the industry lobby that largely represents foreign drug makers operating in India.
“In the backdrop of such high decibel quality concerns raised by USFDA, the level of apprehension regarding effectiveness of generic drugs made in India may increase, unless some tangible remedial measures are taken forthwith,” he said. “These issues are company specific; it will not be appropriate to comment even remotely that all generic drugs manufactured in India are of dubious quality.”
The Ranbaxy episode won’t taint all domestic manufacturers of generics as the development is specific to one company, said Dilip G. Shah, secretary general, Indian Pharmaceutical Alliance, which represents the top Indian companies.
“We should admit that it was crude if Ranbaxy hasn’t shown the documents regarding the non-compliance issues and the related investigation to Daiichi during the due diligence process,” he said. “If it is so, Daiichi has all the rights to raise legal remedies to recover the damage that it has caused the company post deal.”
Any impact on the overall industry will be short-lived, he said.
“I don’t think quality is a concern as far as Indian generics are concerned as the country has several manufacturing plants which have been approved by many regulatory agencies including USFDA, and those are products are there in the market for so long.”
Singh added that Ranbaxy was built on professional principles.
“This company was built over generations based on talent and capability. It was one of the few companies that ran professionally which went global because it was forward looking with an international perspective. These aspects speak about the management capability amply,” he said.
Cases such as the Ranbaxy one will persuade deal makers and potential buyers to dig deeper during the due diligence phase, said Avinash Gupta, head, financial advisory, at corporate consultancy and audit firm Deloitte Touche Tohmatsu India Pvt. Ltd.
“Many deals have gone wrong in the past not only in India but globally too, as exuberant buyers or deal makers tend to discount the impact of certain issues or factor them lightly,” he added.
India exports generic drugs worth about Rs.60,000 crore to least 200 key markets in the US, Europe, Africa and Asia. Of this, about 40% is to the US, the largest drugs pharmaceutical market in the world in terms of value.
India, the country which has the largest number of USFDA-approved manufacturing plants outside the US, has been the largest generic drug exporter to the US and Europe. Top Indian drug makers includingSun Pharmaceutiucal Industries LtdDr Reddy’s Laboratories LtdLupin Ltd and Cadila Healthcare Ltd, besides Wockhardt and Ranbaxy, also operate several manufacturing plants abroad, including the US, to cater to markets there.
The local industry has faced several US regulatory issues in the past. Besides the import ban imposed on Ranbaxy’s manufacturing plants in Himachal Pradesh and Madhya Pradesh, other key instances include a 2009 ban on one of the sterile plants of Hyderabad-based Aurobindo Pharma Ltd, an import ban on Claris Lifesciences Ltd’s plant in 2008 and a four-year ban on the manufacturing plant of Sun Pharma’s US subsidiary Caraco Pharma.
The local drug industry also faced intellectual property related issues while exporting drugs. In recent years, several export consignments from companies such as Cipla Ltd and Dr Reddy’s were seized at European ports on charges of patent infringements, though many of them were released later after they were proved to be legal consignments to either Europe or other markets.

 

#India – Ranbaxy Lab Lted agrees selling adulterated drugs, fined $500 million penalty


By ERIC TUCKER
Associated PressWASHINGTON (AP) – A subsidiary of India’s largest pharmaceutical company has agreed to pay a record $500 million in fines and penalties for selling adulterated drugs and lying to federal regulators in a case that is part of an ongoing crackdown on the quality of generic drugs flowing into the U.S.

Federal prosecutors say the guilty plea by Ranbaxy USA Inc. represents the largest financial penalty against a generic drug company for violations of the Federal Food, Drug and Cosmetic Act, which prohibits the sale of impure drugs.

The deal, announced Monday, concludes a years-long federal investigation into Ranbaxy’s manufacturing deficiencies. The Food and Drug Administration in 2008 barred from Ranbaxy from importing more than 30 different drugs made at factories in India and, two years ago, struck a deal that required the company to ensure that data on its products is accurate, undergo extra oversight and review from a third-party and improve its drug making procedures.

The subsidiary of Ranbaxy Laboratories Limited pleaded guilty to federal criminal charges and the company separately agreed to resolve civil claims with all 50 states and the District of Columbia. The company had earlier set aside $500 million to cover potential criminal and civil liability stemming from the Justice Department investigation.

It admitted as part of the deal that it sold adulterated batches of drugs – including an antibiotic and generic versions of medications used to treat severe acne, epilepsy and nerve pain – that were developed at two manufacturing sites in India. It’s not known whether the problems with the drugs led to any health issues. The problems were largely revealed by a whistleblower in a federal lawsuit filed in Maryland in 2007. The government’s allegations against the company make no claims that the drugs, whose strength, purity or quality differed from the specifications, harmed anyone.

The company admitted to a wide range of deficiencies, including improperly storing drug samples that awaiting testing, continuing to sell a medication in the U.S. even after it had failed purity tests and delaying a voluntary recall of medication that it knew would not maintain its expected its expected shelf life.

Ranbaxy also admitted making false statements to the FDA in 2006 and 2007 annual reports about dates of tests that are designed to detect drug impurities and determine appropriate storage conditions. In some cases, the tests were done weeks or months after the company said they’d been performed. Or the tests were done on the same day – or within days of each other – instead of months apart, the prescribed interval.

The company said in a written statement that it had fully cooperated with the investigation, which it said involved actions from several years ago, and expects “future growth in the U.S. and around the world with a robust pipeline of important products.”

“While we are disappointed by the conduct of the past that led to this investigation, we strongly believe that settling this matter now is in the best interest of all of Ranbaxy’s stakeholders; the conclusion of the DOJ investigation does not materially impact our current financial situation or performance,” Ranbaxy CEO and managing director Arun Sawhney said in a statement.

The company had faced scrutiny in recent years. Apart from the federal investigation, Ranbaxy Pharmaceuticals Inc. – also a subsidiary of Ranbaxy Laboratories Limited – halted in November of generic cholesterol drug Lipitor while it investigated how tiny glass particles got into dozens of recalled batches. The FDA determined at the time that the risk to patients was very low.

The case comes as federal regulators and prosecutors focus attention on the quality of ingredients of generics and other drugs manufactured overseas, said Allan Coukell, an expert on drug safety at The Pew Charitable Trusts. He said the 2008 deaths linked to tainted batches of the blood-thinner heparin that were imported from China served as a “wake up call” about just how much of the nation’s drug supply comes from overseas.

“Over the last few years, the FDA and others have been increasingly focused on the risks associated with global drug manufacturing. The agency now has new authority and new resources which should result in an increased scrutiny on the highest-risk facilities,” he said.

The company agreed as part of Monday’s deal to a fine and forfeiture of $150 million as well as an additional $350 million penalty to settle civil claims that it submitted false statements to Medicaid, Medicare and other government health care programs. Nearly $49 million of that penalty will go to a former Ranbaxy executive, Dinesh Thakur, who acted as a whistleblower by filing a federal lawsuit accusing the company of knowingly falsifying drug data, prosecutors said.

Thakur said in a statement that the company had been notified of the problems, and “when they failed to correct the problems, it left me with no choice but to alert healthcare authorities.”

“He was the source, the original source, of the information to the government that ultimately led to the government’s earlier actions,” said Andrew Beato, one of Thakur’s lawyers.

 

WARNING -Pharmaceutical companies and drug controllers- First time MP, Jyoti Mirdha #goodnews


 

10 AUG, 2012, 02.10AM IST, KHOMBA SINGH,ET BUREAU

Jyoti Mirdha is one of the 31 members in a parliamentary committee that voluntarily examines healthcare issues.

Jyoti Mirdha is one of the 31 members in a parliamentary committee that voluntarily examines healthcare issues.

NEW DELHI: If pharmaceutical companies and drug regulators in India have been lately facing scrutiny in greater and vicious doses, some of it can be traced to the dogged inquisitions of a young, first-time parliamentarian: Jyoti Mirdha. This Congress MP is one of the 31 members in a parliamentary committee that voluntarily examines healthcare issues, but she is making her presence felt with her proactive work and, some say, her anti-industry policy positions.

Sample this. In July, about a month after Mirdha wrote to the prime minister, the government pulled out of cold storage a code of conduct for companies on dealings with doctors and promised to notify it in August.

Earlier, in May, she made a presentation to the group of ministers (GoM) on the new drug pricing policy, making a case to bring all drugs under price regulation. That same month, the parliamentary committee, based on a report by a sub-committee of which she was the convenor, alleged lapses and corruption in the process of drug approvals, shaming several frontline companies and hauling up the lead drug regulator. “She is the driving force behind the report,” says Ramesh Adige, the former head of regulatory affairs at Ranbaxy Laboratories.

For all the attention her work is drawing, the Lok Sabha MP from Nagaur in Rajasthan is reluctant to talk about it, or herself. “…if you dig slightly deeper, you’ll know I don’t interview!” she initially emailed ET in response to a request for an interview. She later relented, but only to clarify her stand on issues raised by her.

What is known about Mirdha is that she is the grand-daughter of late Nathuram Mirdha, a veteran politician. Her profile page on the Lok Sabha website shows that Mirdha graduated as a doctor from SMS Medical College, Jaipur, and lists her ‘special interests’ as “water resources, alternative medicine (especially nutrition) & renewable energy”.

The medical education appears to be holding her in good stead today as she is voicing her opinion on a range of issues relating to the pharma industry, including drug pricing, clinical trials, acquisitions by foreign companies and marketing practices.

Describing her as “passionate and sincere”, Dr Sanjay Jaiswal, another committee member and BJP MP, says: “She is well-prepared, with loads of information.” Adds Lalit Kumar Jain, a lobbyist for small drug manufacturers: “She is also close to some NGOs and drug regulatory experts who are working in public interest. They provide her all the requisite information.”

Keeping Distance from Drug Companies

Mirdha is also seen to keep a distance from pharma companies. “She has no conflict of interest,” says Jaiswal, adding that she has, at times, even asked committee members to abstain from discussion on issues where they had a business interest.

At least three of Mirdha’s policy positions have riled industry players: controls on pricing of all drugs; mandatory rules and penalties to govern the company-doctor relationship; and controls over foreign investment in Indian companies. “When policies are made, you should look at the welfare of 120 crore people, and not that of a few individuals or companies to further their limited interest,” she says. “I’m all for industry if it means productivity, enterprise and innovation. But if it means exploitation or extortion, then you could label me anti-industry.”

Mirdha feels prices of all drugs should be regulated, not just those based on 74 ingredients (out of 900-odd), as is the case now. “A cost-based mechanism is the only effective way to regulate prices of drugs,” she told ET in May. “Companies have been found to be selling at multiple times the cost price and market-based pricing would further support it.”

When the department of pharmaceuticals put out a draft of the drug pricing policy and invited public comments, she was the sole MP to respond, resulting in the GoM on drug pricing inviting her to make a representation. Mirdha made a 29-slide presentation to the GoM, the central idea of which was to bring all drugs under price regulation, something the industry is strongly opposed to.

 

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