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The Dark Side

Ranbaxy: Looking Under the Rock

Here’s an excellent, detailed look from Fortune at how things went off the rails at Ranbaxy and their generic atorvastatin (Lipitor). The company has been hit by a huge fine, and no wonder. This will give you the idea:

On May 13, Ranbaxy pleaded guilty to seven federal criminal counts of selling adulterated drugs with intent to defraud, failing to report that its drugs didn’t meet specifications, and making intentionally false statements to the government. Ranbaxy agreed to pay $500 million in fines, forfeitures, and penalties — the most ever levied against a generic-drug company. (No current or former Ranbaxy executives were charged with crimes.) Thakur’s confidential whistleblower complaint, which he filed in 2007 and which describes how the company fabricated and falsified data to win FDA approvals, was also unsealed. Under federal whistleblower law, Thakur will receive more than $48 million as part of the resolution of the case. . .
. . .(he says that) they stumbled onto Ranbaxy’s open secret: The company manipulated almost every aspect of its manufacturing process to quickly produce impressive-looking data that would bolster its bottom line. “This was not something that was concealed,” Thakur says. It was “common knowledge among senior managers of the company, heads of research and development, people responsible for formulation to the clinical people.
Lying to regulators and backdating and forgery were commonplace, he says. The company even forged its own standard operating procedures, which FDA inspectors rely on to assess whether a company is following its own policies. Thakur’s team was told of one instance in which company officials forged and backdated a standard operating procedure related to how patient data are stored, then aged the document in a “steam room” overnight to fool regulators.
Company scientists told Thakur’s staff that they were 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 bioequivalence tests to produce better results.”

You name it, it’s probably there. Good thing the resulting generic drugs were cheap, eh? And I suppose these details render inoperative, as the Nixon staff used to say, the explanations that the company used to have about talk of such problems, that it was all the efforts of their big pharma competitors and some unscrupulous stock market types. (Whenever you see a company’s CEO going on about a conspiracy to depress his company’s share price, you should worry).
The whole article is well worth reading – your eyebrows are guaranteed to go up a few times. This whole affair has been a damaging blow to the whole offshore generics business, India’s in particular, and does not help them wear their “Low cost drugs for the poor” halo any better. Not when your pills have glass particles in them along with (or instead of) the active ingredient. . .

27 comments on “Ranbaxy: Looking Under the Rock”

  1. watcher says:

    For years, I’ve said that generics that I’ve taken are not comparable in performance and side effects as the branded version….and now we know why.

  2. Anonymous says:

    What are the odds that the top execs still pull large bonuses at the end of the year?

  3. Hap says:

    You have to wonder if this is a solvable problem. If the money is there (and based on the cost pressures on drugs, and generics’ role in them), people will get it, and without a lot more money and people, the FDA isn’t going to be able to inspect facilities enough to make following the rules more lucrative than cheating. On the other hand, considering this, maybe there isn’t enough inspection capacity without Big Brother’s existence to get people to behave. Having more of a reputation to lose and being in a place that should have had more inspections didn’t faze Glaxo.
    Boy, this has to making Daiichi Sankyo even happier with purchasing Ranbaxy – it’s like a biotech hype-and-sell out deal, but (at least) five-fold more expensive.

  4. Evans' Dog says:

    Ranbaxy got caught and that is the news. among all the generics manufacturers in India (I have first hand knowledge), there is no legit record keeping. everything done is fabricated to put the shine on the FDA. the FDA does not have the element of surprise when they inspect/audit Indian facilities.
    This is how things are done on this side of the world. Yet, we as americans continue to support imports from India and China, we continue to support CRO activities from these countries SIMPLY BECAUSE THEY ARE CHEAP. at the same time – the American infrastructure for innovation is weakening.
    $500 million was a weak punishment. Ranbaxy should have been banned from selling an more generic drugs.

  5. emjeff says:

    I am astounded that this company is still able to submit applications to the U.S. The company is filled with slimeballs, and the FDA comes off looking like doddering fools.

  6. A says:

    Frightening! But to #1 and #4, do you think it is fair to take this case as ONLY an indictment against generics? As Hap alludes to above, Glaxo has fallen foul as well.

  7. oldnuke says:

    So let me see if I have this right.
    They’re putting people away for “product tampering” on some items in a convenience store or grocery, but the people in the know at Ranbaxy aren’t going to be prosecuted criminally?
    What they did is ORDERS OF MAGNITUDE worse. At the very least they should be getting 20 years in the federal pen and permanently banned from working in the industry.
    A fine is mighty weak for the company too. They should be banned from selling their garbage in the United States, permanently.
    And, yes, it is personal. I had some of their products delivered to me by Caremark!

  8. Esteban says:

    It’s easy enough to see how the FDA could be duped by manufacturers on the other side of the globe when it comes to onsite inspections. Does anyone know if the FDA randomly samples and tests the products over here? That seems like a more cost effective way to determine if a manufacturer has poor QC. If a problem is seen, one could then go to the site and request records for those particular lot numbers, etc.

  9. Anonymous says:

    To be fair this problem can also apply to non-generics. The “innovator” company, Genzyme was fined 175 million by the FDA in 2010 due to manufacture quality violations at its Allston plant.
    In November 2010, the FDA says it found tiny particles of trash in drugs made by Genzyme, including steel, rubber and fiber. The agency recommended that doctors closely inspect vials of four drugs made at the plant: Cerezyme, Fabrazyme, Myozyme and Thyrogen.
    Myozyme costs over 500k per annum and must be taken for a patient’s lifetime, which means most patients cannot afford it. So in this case at least, price is not necessarily an indicator of quality. Those whistle-blowing laws can certainly help though – US$48 million payout, God bless America!

  10. InnovativeCore says:

    I think in GSk and JNJ, executives lost jobs…in China, with the infant formula and other scandals, the regulator got the death penalty(?)…here the Ranbaxy guy reinvested his Daiichi cash with the Fortis chain of hospitals…they own hospital and dental practices in many countries…and are perhaps in the “medical tourism” business too.
    As for the regulators, the Europeans, Canadians and all developing markets health authorities seem to be a whole lot worse off than the FDA…though the FDA hardly looks good in this story

  11. oldnuke says:

    BTW, I just sent an email to CVS/Caremark and asked them what THEY intend to do about it. I strongly suggested that they cut Ranbaxy out of their supply chain and tell their customers about it.
    Our big pharma retailers need to get out in front of this problem and defend their customers.
    If Ranbaxy saw their US market go away, maybe the FDA or Congress would grow a pair.

  12. Anonymous says:

    It is a shame that they are still in the business, seemily doing well and continue selling generic drugs…

  13. Insilicoconsulting says:

    #4 Why target CRO’s? In my personal experience, Indian CRO’s are as good if not better in formulations, process chemistry and even medchem, dmpk as their US/European counterparts!
    This does not mean that I condone Ranbaxy’s activities.
    What’s wrong is wrong. However as quoted by other commemorators plenty of other large pharma and biotech companies have also been found just as guilty.
    So do not bring your (probable) job loss angst and 1st world feeling of superiority to this discussion please.

  14. That article kind of begs the question. Why is it that the FDA “has” to trust these guys? Why can’t they systematically spot-check pharmaceuticals that are for sale? Is it that that would take more hands-on chemistry than the FDA is comfortable with? If so, perhaps they could hire some of those laid-off chemists who are looking for jobs.

  15. Dieter says:

    The “lab worker” images are well-chosen: No gloves, guy without safety goggles, spilled substance at the workplace, a mess as backdrop. That completes the story.

  16. Matt says:

    Once again, no criminal charges. Both Brian Tempest and Malvinder Singh should rot in jail, for years. When the law is not applied to white collar criminals, why are we surprised that their actions continue? I suppose the only (poor) remedy we have is to unleash the trial lawyers and litigate Ranbaxy out of the country and into oblivion. That doesn’t penalize the executives, though, who were responsible and profited.

  17. processcheimist says:

    So the common knowledge in the area of contract manufacturing gets full light in an official prosecution…
    But I fear that in a context where the payers (insurance companies in the US, governments in EC) want to cut the costs to the bone this episode will remain an isolated case. The rule is still “the cheaper, the better”, and if someone get caught there are plenty of others (with no different behaviours) ready to fill his slice of the market.

  18. A Nonny Mouse says:

    In my old days at Wellcome, the production people were continually going over to a production facility that we had in India to prevent them making “improvements” to the processes. The idea of an SOP was alien to them.
    On a visit to a major Indian manufacturer in 2004, I went around their central analytical laboratories and, even though they did not have a large US presence, they had an “FDA floor” and the people working here had been selected so that they obeyed the rules and did not deviate. They had separate facilities and were not allowed to mix with the other analytical people so that they did not become “contaminated”.

  19. Evan's Dog says:

    @13 get your head out of the sand and see reality.
    What Ranbaxy got caught for happens regularly in the industry (as far as India is concerned). The FDA should go after the Ranbaxy officers in a potential criminal case.
    As far as “INDIAN CRO’s” are concerned, they cannot match Chinese standards in terms of productivity and cannot match US standards in terms of intellectual creativity (med chem and drug discovery). Formulations is another story.
    so don’t be troll and talk about 1st world superiority.

  20. Anonymous says:

    I guess the FDA behaved like an Indian regulator one with an Indian company. If not for the whistle blower, Ranbaxy would not have been caught. How scary. FDA has been lax with inspections and spot checks clearly distracted by the cheap medicines Indian firms bought to the American medicare system. Shortly after Ranbaxy was caught, FDA’s censure for violations by Indian companies dramatically increased and that inadvertantly showed that FDA was indeed lax. A more vigilant FDA is neccessary to get better quality cheap medicines to America and it is not merely the fault of wannabe drug firms like Ranbaxy.

  21. Sili says:

    Why is it that the FDA “has” to trust these guys? Why can’t they systematically spot-check pharmaceuticals that are for sale?

    It probably has something to do with the fact that any attempt to keep the ‘Free Market’ honest, is considered anathema to Congress.

  22. Yadgyu says:

    These types of things will continue to happen. The consequences and punishment are not a deterrent. Life will go on and all will be forgiven in a year.

  23. Secondaire says:

    Dear God, why aren’t these people in jail? This isn’t just a simple case of some student making up data for a publication; this could have (and no doubt has) dire consequences for peoples’ health. Absolutely sick.

  24. SteveDoc22 says:

    So Ranbaxy (shareholders) pay a fine, executives keep their lifestyles and it’s business as usual. How about prosecuting some of these executives? Maybe giving Ranbaxy a five year hiatus from the U.S. market would have an effect.

  25. ANONYMOUS says:

    I wish to remain anonymous with my comments having spent some 10 years inspecting active substance manufacturers specifically in India but also around the world.
    There is no doubt in my mind that with one or two exceptions you can rarely trust the statements made to you as an auditor or inspector in India or China; the companies you audit are out to prevent you from really seeing what happens, and thus all measures are taken to hide the truth. It took me six years to realise how a Pakistan pharmaceutical company was able to flood the local market with a local version of a patented product – there were two separate shifts at the factory and I inspected only the day shift.
    We in the West do not have the mentality to appreciate an attitude very prevelant “East of Suez” which is “If you are fool enough to believe that what I tell is the truth then don’t be surprised if you find out later that the information I gave you was what you wanted to hear – but bore no relationship to the actual situation”. There is only one answer to this problem and that is try and acturately date each action described by the company and see if the sequence fits. Sooner or later you will find an “action” which does not fit the correct time sequence and that is the key to openming up the Pandora’s box. Unfortunately such auditing techniques require time and the majority of auditors and inspectors do not have sufficient time to trace “Actions taken and when” to detect fraud. Ranbaxy is not the only one, but they have not changed their practices – the FDA detected 10 years ago that they were forging analytical data by cutting out the impurity peaks in the HPLC curves!

  26. the quick brown fox says:

    This is a bit late, but I have a hobby of writing pangrams (sentences containing every letter of the alphabet). For example:
    We gave Jacques Ranbaxy’s Zoloft, it made him puke. (40 letters)

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