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General News    H4'ed 5/26/13

Investigative Journalist Katherine Eban Exposes Massive Fraud at Generic Lipitor Manufacturer

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Katherine Eban
Katherine Eban
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My guest today is Katherine Eban, award-winning investigative journalist. Welcome to OpEdNews, Katherine.  

JB: I just finished your recent piece, " Dirty medicine: The epic inside story of fraud at a generic Lipitor giant" for Fortune Magazine. It's a disturbing read. How do you first get onto this story?

KE: Over the years, I have reported on pharmaceutical integrity issues, and began hearing from my sources that I should look into the generic drug industry.  They used words like 'Wild West,' to describe what was going on.  The more I reported, the more I heard about Ranbaxy.  The company seemed to be emblematic of America's new drug supply: 84% generic, and most of it coming from overseas.  Ranbaxy is no fly-by-night storefront.  It is one of India's largest companies, a source of national pride and sells drugs in 150 countries (including ours).  The more I learned about the company, however, the more I suspected there was a bigger story there.  

JB: How did you get access? Were employees reticent about talking to a member of the press? I can't imagine they were in a hurry to air their dirty laundry in public.

KE: I wouldn't use the word access.  No one opened the door for me.  This was old-fashioned investigative reporting -- trying to convince people to talk to me, source by source.  I was calling former employees on three continents.  Meanwhile, I set out to learn, pretty much from scratch, how one is supposed to manufacture a generic drug.  As I amassed documents, I also set out to learn how to decipher laboratory data, so I could understand what went on in Ranbaxy's laboratories and how the company took the shortcuts it did.  

JB: You had quite a bit of homework to do for this assignment. For those who have not read your stellar article, can you describe the fraud involved? Did the extent of it surprise you?

KE: The extent of the fraud astonished me.  In a nutshell, the article describes how the company  manipulated, and outright invented, testing data to win approval from regulators throughout the world.  As a result, it ended up selling largely untested and unstable drugs in more than 40 countries.    

I uncovered a presentation that was given in 2004, to a subcommittee of Ranbaxy's Board of Directors.  It was the result of an internal investigation into the fraud.  The presentation, before the CEO, board chairman and others, made clear that Ranbaxy had lied to regulators and falsified data worldwide.  "More than 200 products in more than 40 countries" have "elements of data that were fabricated to support business needs," the PowerPoint stated. It noted that in entire markets -- including Brazil, Kenya, Ethiopia, Uganda, Egypt, Myanmar, Thailand, Vietnam, Peru, and the Dominican Republic -- the company had simply not tested the drugs and had invented all the data.

This was not simply cutting corners or engaging in lax manufacturing practices.  It was outright fraud.  The company knowingly sold substandard drugs around the world -- including in the U.S. -- while working to deceive regulators. It is clear that millions of people worldwide got medicine of dubious quality from Ranbaxy.

JB: The Ranbaxy whistleblower experienced the dangers of this massive fraud with his own child. Can you share that story, Katherine?

KE: In 2004, Dinesh Thakur, who was then Ranbaxy's director of research information and project management, was given an assignment by his boss in Gurgaon, India: to go through the company's portfolio -- ultimately, every drug, every market, every production line -- and to uncover the truth about the data Ranbaxy had submitted to regulators.  This was Thakur's first inkling of fraud at the company.  

That evening, he returned home from work, saw his toddler son playing on the lawn, and recalled an incident from the year before.  The boy had developed a serious ear infection, and a pediatrician had prescribed Ranbaxy's version of amoxiclav, a powerful antibiotic. The medicine had no effect.  The boy's fever only disappeared after the doctor changed the prescription to the brand-name antibiotic made by GlaxoSmithKline.  Thakur resolved not to give his family any more Ranbaxy drugs until he knew the truth.  

JB: Yikes! Where have the FDA and the Justice Department been in all this? Have they done everything they needed to be doing?

KE: That is a very hard question to answer.  There are three separate issues: what they can do, what they did do, and what they should do.  And the issues for prosecutors are different than for regulators.  For the FDA, the challenges are immense.  How are you going to regulate a drug supply that has moved overseas?  How are you going to make unannounced weeks-long inspections in Gurgaon, India?  But then again, if you have a whistleblower who has revealed massive fraud, why are you going to let the company proceed with the biggest generic drug launch in history, that of Lipitor?  Why did the FDA allow Ranbaxy to keep its drugs on American pharmacy shelves?  Why is the company still in the business in the U.S.?  These are all questions that need to be answered.  

For prosecutors, there are jurisdictional issues.  Are these foreign companies making our drugs effectively above the law?  And that raises issues for consumers.  Who are they going to sue, if something goes wrong.  An Indian or Chinese pharmaceutical company?   

JB: Speaking of consumers, what are the numbers here? What proportion of generics are manufactured overseas?  Should we be avoiding generics altogether? And are there any ethical pharmaceutical companies that are interested in producing a quality product and not just in maximizing profits?

KE: Our drug supply is now 84% generic, much of it coming from overseas.  Overall, between brand and generic, 80% of our active pharmaceutical ingredients and 40% of our finished doses come from overseas.  One way or another, the majority of pills we take contain ingredients produced in India and China, whether we like it or not.  So the question is, how should the cautious consumer respond to that?  What, if anything, can we do?  

Careful companies trust but verify, as Reagan said. They have elaborate systems for testing the active pharmaceutical ingredients they purchase.  Sometimes, those systems are not good enough, as when Baxter unwittingly bought counterfeit Heparin ingredients from China, which ended up killed dozens of Americans.  Personally, when I take medicine, I want to maximize the control I have.  I want to see my pharmacist, know the manufacturer, and have some opportunity for legal redress should something go wrong.  That can be hard to achieve, and many people have little control over the drugs they take.   

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Joan Brunwasser is a co-founder of Citizens for Election Reform (CER) which since 2005 existed for the sole purpose of raising the public awareness of the critical need for election reform. Our goal: to restore fair, accurate, transparent, secure elections where votes are cast in private and counted in public. Because the problems with electronic (computerized) voting systems include a lack of (more...)

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