The Silence on Ranbaxy

The corporate equivalent of a sledgehammer hit Ranbaxy last week and there has barely been a ripple in the Indian press.

The silence is rather surprising given the fact that Ranbaxy is one of the largest pharmaceutical companies in the country, and the fine imposed on it by US-FDA is no less than $500 million (~Rs. 2500 Crores). An NRI whistle-blower named Dinesh Thakur got $ 43.8 million (Rs. 266 Crores) for exposing the drug company for being dishonest about the safety and efficacy of its drugs.

Fortune magazine published an article describing in detail, the "epic inside story of long term criminal fraud" at Ranbaxy. The tone and tenor of the piece was not exactly balanced for it gave the overall impression that generic drugs were a risky proposition compared to the more expensive 'branded' ones.

A good example of this was the description of Thakur's personal experience with his company's products. It seems his own son recovered from a persistent fever & infection only when he switched from a Ranbaxy drug to a 'brand-name antibiotic' (amoxiclav) produced by its competitor, GlaxoSmithKline (GSK). It might have been worth mentioning at this point that GSK's record too has been less than stellar when it came to drug safety. Just a couple of years ago, in 2010,  GSK paid $750 million in criminal and civil fines to resolve a federal whistle-blower suit that highlighted problems at a factory in Puerto Rico.

Now, whistle-blowers and payoff's aside, the big question that is likely to hit an Indian reader is this: If Ranbaxy has been fudging data and selling dud drugs in Africa, Latin America and USA, what about the stuff it has been selling to hospitals and patients in India?

Its only yesterday that the Economic Times published a response from the Drug Controller General of India's (DGCI). A DGCI officer who 'did not wish to be named', states that they had inspected the plants in question (Dewas and Paonta Sahib) but found "found nothing particularly alarming about the facilities".

Nothing particularly alarming? One would have expected a government organisation to be more forthcoming about public safety. Did DGCI do any random sample tests of Ranbaxy drugs that were already in the domestic market? Did they find any traces of active ingredients - or glass powder - in any of them? Did any hospitals complain about poor-quality drugs from Ranbaxy?

Until credible answers emerge, I guess we would all be warily looking for alternatives to Ranbaxy's product line.

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REFERENCES / LINKS

* FDA - Regulatory Action Against ranbaxy - http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/EnforcementActivitiesbyFDA/ucm118411.htm

* 2010 - The Guardian, UK -- GlaxoSmithKline whistleblower awarded $96m payout --- http://www.guardian.co.uk/business/2010/oct/27/glaxosmithkline-whistleblower-awarded-96m-payout
- Cheryl Eckard - Whistleblower who exposed contamination problems at Glaxo plant in Puerto Rico receives $96m
- Lawsuit doc in full - http://image.guardian.co.uk/sys-files/Business/documents/2010/10/27/glaxonew.pdf

* 2013 - First Post Business -- After swallowing bitter pill, Ranbaxy set to revive sales in US -- http://www.firstpost.com/business/after-swallowing-bitter-pill-ranbaxy-set-to-revive-sales-to-us-787055.html

* 2013 (ToI) - http://timesofindia.indiatimes.com/Business/India-Business/Whistleblower-feels-relieved/articleshow/20056271.cms

* 2013 (ET, 22May) - http://articles.economictimes.indiatimes.com/2013-05-22/news/39445394_1_ranbaxy-labs-drugs-us-regulator

* 2013 (BS 22May) - http://www.business-standard.com/article/companies/after-us-india-to-probe-ranbaxy-s-documents-113052101067_1.html

Recent Articles:

* 2013 (WSJ-Mint) - Ranbaxy Holds up an Ugly Mirror to Corporate India -- http://www.livemint.com/Opinion/1wbHWnjJBsrKgXKz3o76QL/Ranbaxy-holds-up-an-ugly-mirror-to-corporate-India.html
. What was cooking in Ranbaxy’s labs over nearly five to six years was never under any supervision. That exposes the lack of teeth and, perhaps, even moral responsibility of the Indian Pharmaceutical Association (IPA), the association of drug companies. What’s worse, not till the FDA’s actions did the Central Drugs Standard Control Organization, the designated Indian regulator, initiate any action against the company whose drugs are among the pricier and more popular ones in the Indian market.

* Narayan, Laxman (2013): A Deception Most Fowl, The Hindu, 26May13- http://www.thehindu.com/business/Industry/a-deception-most-foul/article4753453.ece?homepage=true
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Notes:  Allegations against Ranbaxy
- cutting corners + lax manufacturing practices + outright fraud
- knowlingly selling sub-standard drugs worldwide.
- Misusing the 'honor system' in drug applications (data provided by companies themselves)
- Ranbaxy "took its greatest liberties in markets where regulation was weakest and the risk of discovery was the lowest".
- Manipulated almost every aspect of its manufacturing process to quickly produce impressive-lookin data that would bolster its bottomline.
- Lying to regulators, back-dating (even its own SOPs) and forgery were commonplace.
- Internal report showed that of the 163 drug products approved and sold since 2000, only eight had been fully and accurately tested...the rest was phony data.


Timelines:
. 2002 - Dinesh Thakur leaves Bristol Myers Squibb (BMY) to joine Ranbax , Gurgaon
- 2003 - Thakur joins Ranbaxy
- data problems with - Ranbaxy's version (Riomet) of diabetes drug Metformin --- also with acne drug Isotretinoin
- Sotret - Ranbaxy's version of the acne drug Accutane
- Generic version of Pravastatin - a cholesterol lowering drug
- Anti nausea drug, Kytril (Roche)
- 2006 - Malvinder Sing succeeds Brian Tempest as MD & CEO
- 2008, Jun - 34% stake sale to Daiichi Sankyo for $2b - $4.6b
. 2008 - court filing by US Justice Department
- 2008 - FDA halts import of 30 different drugs from two of Ranbaxy's manufacturing plants in India + invokes "Application Integrity Policy" stopping review of any new drugs from its Paonta Sahib plant.
- 2010 - mounting recalls - pediatric antibiotic Amoxicillin and Clavulanate pottasium
- 2011 - FDA permits Ranbaxy to make a generic version (atorvastatin) of a popular drug "Lipitor" (anti-cholesterol drug from Pfizer)
- 2009 - caught with 12 boxes of generic drug, Isotretinoin (Roche)
- 2012, Nov - Ranbaxy recalls millions of pills after glass particles were found in some of them.
- 2012 - Justice Dept places Ranbaxy under sweeping "consent decree" - until quality verification and external audit of its plants.
- 2012 - Ranbaxy continues to grow - becomes the fourth-fastest-growing pharma company in the US (sales + prescriptions)

Policy:
- Freedom of Information Act -- used for getting FDA docs on Ranbaxy
- Hatch-Waxman Act 1984 - created a pathway - Abbreviated New Drug Application (ANDA), which allowed a generic company to simultaneously challenge a patent and demonstrate to FDA that it could make the drug. As a reward to taking the risk of almost certain litigation (from patent holder), the winner got six months of exclusive sales after the patent lapsed.
- Patriot Act 2001 - made it difficult to purchase and transfer drugs out of USA

Numbers:
- Global market for generic drugs is $242 million
- Ranbaxy is the sixth largest generic drug manufacturer in USA with more than $1 billion sales (2012). Its global sales is $2.3 billion.
- US regulators inspect only 11% of foreign drug manufacturers and 40% of domestic ones.