Katherine Eban on Corporate Crime in the Pharmaceutical Industry

Katherine Eban would like to write about something other than the pharmaceutical industry.

But she just can’t let go.

“I keep on trying to stop writing about pharmaceuticals,” Eban told Corporate Crime Reporter in an interview last week. “In many ways, it’s like covering organized crime. There is so much money, so much greed, such a profit motive, that the stories keep coming. I will do my best to not write about this industry anymore. But I somehow feel that this industry may have other plans for me.”

Eban is out with her latest, Bottle of Lies: The Inside Story of the Generic Drug Industry (HarperCollins, 2019).

In it, we learn some basics: Generics comprise nearly 90 percent of the drug supply in the United States and over 40 percent of those generics are made in India. In addition, nearly 80 percent of the active ingredients in all drugs, whether brand name or generic, as well as virtually all antibiotics taken in the United States, are made overseas.

If the book were to be made into a movie, there would be two central characters – Peter Baker and Dinesh Thakur.

Baker is a former Food and Drug Administration (FDA) inspector assigned to inspect overseas drug manufacturers.

After inspecting these overseas plants, he comes to a startling conclusion – we can’t trust any of these drugs coming in from overseas.

“Baker and a number of other inspectors who are inside these plants day in and day out will not take the drugs manufactured in these plants because they don’t think they are safe,” Eban said.

But it is affecting all active ingredients. Is he saying – I don’t take any drugs?

“He is not saying that. Here is the part of it which is essentially impossible to quantify. We are all at the mercy of the vigilance of the company making the finished dose. Companies whether they are brand or generic, they are buying up these active ingredients. They are required to test those active ingredients and insure their quality before they put them into a finished drug. We are relying on the vigilance of the companies that are inspecting their suppliers, testing their materials and presumably running a clean ship in their own manufacturing plants.”

“What Peter Baker is saying is that he has less confidence in companies he inspected – these low cost manufacturers overseas – and less confidence in their commitment to patient safety.”

“Peter Baker was a young FDA investigator who volunteered to relocate to India and inspect Indian drug plants that had been either approved or were waiting approval by the FDA –  to export their drugs into the United States.”

“These companies have to generate data based on the tests they are doing on these drugs. And that data can be about the impurities in the drugs, about the bioequivalence in patients, about their dissolution and stability. The data they are generating is fundamental to the question of the drug’s quality.”

“All of the data has to be transparently generated and maintained and made available to regulators. You can’t have any secret data in a compliant manufacturing plant. Instead of just asking for documents and getting printouts, Peter Baker started looking in the computer systems of these plants. And once he did that, he began to see that the plants were running hidden laboratory operations that were based on pre-testing drugs in offline laboratory equipment. He was getting a sense of whether they would pass or fail specifications. And then they would figure out how to manipulate those tests and move the testing to the ‘transparent’ system that the FDA was going to look at. That’s how he discovered widespread data fraud in these plants.”

“Some of the ways that these drugs fail specifications is that they had far higher impurities than are permitted. And what he found was that the plants either failed to inspect or investigate these impurities, which they are required to do, or somehow manipulated the testing data so that the impurities didn’t show up.”

“The fraud that he found was aimed at taking either failing or borderline drugs and making them pass with data that would be submitted to the FDA for approval or for continued approval.”

“I’ve been using the word widespread. Over the course of five years, he inspected 86 plants in India or China. And he found some element of data fraud or data deceptive manufacturing practices in four fifths of those plants.”

“Peter Baker ended up leaving the FDA in March.”

One of the key points in your book is that FDA inspectors show up at plants in the United States unannounced. Overseas, they show up at a scheduled time.

“There is no FDA rule that says they have to give advance notice to overseas plants. The FDA has decided to do this because they are confronting complex logistics overseas. They have said they want to make sure that the right people are at the facility when they show up and they send people over. Because of globalization, overnight the FDA became a global agency. They really are just a domestic regulatory agency. They have struggled to think through their policies and how they should function overseas. They basically decided that the easiest thing to do or best thing to do was to announce these inspections in advance. “

“But people I have interviewed and spoken with and from what I have observed, that allows companies to stage these inspections.”

If there is widespread fraud, you would suspect that there would be victims, that people would be getting hurt by drug impurities or by drugs that don’t work.

“And they are. Just now, millions of Americans have had their blood pressure drugs recalled because of toxic impurities in the active ingredients that were manufactured in India and China. The impurity is a carcinogen that is used in the production of liquid rocket fuel. And there have been unacceptably high levels in Valsartan and Losartan, which are two generic blood pressure medications. There are massive recalls of this drug.”

Peter Baker is one hero of your book. The other is Dinesh Thakur.

“Dinesh Thakur was a young engineer who worked for Bristol Myers Squibb in New Jersey. He was recruited to go to Ranbaxy. He moved his whole family back to India, where he was originally from, with the thought that he would be doing something good for the development of his native country. He got to Ranbaxy and found chaos and standards that were lower than what he would expect for a multinational company. He interpreted that his services were needed there. His team at Ranbaxy was trying to map all the data in the company’s quickly expanding global portfolio. He had been there for about a year when his boss flagged his concerns about the quality of the company’s data and asked him to take his team and do a company wide retrospective on the quality of the data that had been submitted to regulators around the world. He wanted to know — was the data real, was it accurate?”

“As Thakur and his team dug into this assignment, they uncovered Ranbaxy’s secret. The company had fabricated the data it had submitted to regulators for more than 200 drug products in more than 40 countries around the world. Sometimes they had just been deceptive in falsifying data by using data from one country to submit to regulators in another. For other countries, they just invented all the data — wholesale invention of data.”

“Thakur’s boss presented these findings to a subcommittee of the board of directors who just proposed that they bury the information. Thakur’s boss ended up leaving the company. Thakur himself was forced out. He couldn’t let it go because he was so concerned about the welfare of patients around the world. He ended up becoming a whistleblower.”

And he sued under the False Claims Act. What was Thakur’s take on the False Claims Act settlement?

“I think he got about $48 million.”

And what was the result of the criminal prosecution?

“On one level it was highly successful. Ranbaxy pleaded guilty to seven felonies. The company doesn’t exist anymore today. But one of the big problems with the prosecution is that no individuals were held accountable. Many of the executives at Ranbaxy who were complicit in this ended up fanning out throughout the generic drug industry. There is a question about what was actually accomplished.”

“If Thakur had not blown the whistle, everything we know today about the fabrications within the generic drug industry would still be under wraps.”

Are you saying you would not have been able to write your book had Thakur not come forward?

“For certain I would not have been able to write this book. I wouldn’t have gotten into the story of it.”

Where is Thakur now?

“He goes back and forth between the United States and India. He has a foundation that he runs. He is an activist. He is trying to overhaul the quality of drug manufacturing in India, which is a difficult project. He has brought lawsuits against the Indian regulatory system to try to improve drug quality. He is out there fighting for patients.”

[For the complete q/a format Interview with Katherine Eban, see 33 Corporate Crime Reporter 25(11), June 24, 2019, print edition only. ]

Russell Mokhiber is the editor of the Corporate Crime Reporter..