#71 - Katherine Eban: Widespread fraud in the generic drug industry
Investigative journalist Katherine Eban, author of Bottle of Lies, exposes widespread fraud in the generic drug manufacturing industry, particularly in India and China. She details how companies like Ranbaxy falsified data, leading to compromised drug quality and global health risks. The discussion concludes with actionable advice for individuals to protect themselves and ideas for systemic reform.
Deep Dive Analysis
17 Topic Outline
Investigative Journey into Generic Drug Fraud
Understanding Branded vs. Generic Drug Differences
FDA's Origins and Evolving Mandate
Hatch-Waxman Act and Generic Drug Market Growth
Generic Drug Scandal and FDA Enforcement Changes
PEPFAR's Influence on Global Generic Drug Acceptance
Ranbaxy: India's Largest Generic Drug Company
Discovery of Systemic Fraud within Ranbaxy
The SAR Document and Ranbaxy Board's Complicity
Dinesh Thakur's Whistleblower Journey
FDA Raid and Evidence of Ranbaxy's Deceit
FDA's Protracted Investigation and Approvals
Cultural Context of Fraud in Indian Pharma
Prevalence of Data Fraud in Overseas Plants
Real-World Impact of Substandard Generic Drugs
Empowering Patients to Verify Drug Quality
Proposals for FDA and Generic Industry Reform
7 Key Concepts
Bioequivalence
Generic drugs must be clinically equivalent to brand-name drugs in the body, meaning they absorb into the blood within a specific range, even if manufacturing steps or excipients (additional ingredients) differ.
Process is the Product
A core principle of the modern FDA, stating that rigorous documentation and control over the manufacturing process are essential to ensure drug quality, as it's impossible to test every single pill in every batch.
First-to-File Incentive
A crucial provision in the Hatch-Waxman Act that granted the first generic company to file an approved application six months of market exclusivity without generic competitors, allowing them to price their drug at about 80% of the brand name.
Application Integrity Policy
An FDA enforcement tool introduced after the 1980s generic drug scandal, allowing the FDA to remove applications from the queue or shut down a company's pipeline if data falsification is found, effectively suspending their ability to market drugs.
Jugaad
A Hindi word that, in a negative context, describes a spirit of creativity that eliminates all obstacles to achieve a desired goal by any means necessary, often disregarding rules or regulations within Indian companies.
Quality Control Laboratories (QC Labs)
Areas within manufacturing plants designed to audit the manufacturing process; in corrupt companies, these labs can be used to manipulate test results and make failing drugs appear to pass specifications.
Authorized Generic
A generic drug made by a generic company that partners with the brand-name company, receiving the original drug's 'recipe' or know-how, and allowing the brand to retain a share of the profits through a licensing agreement.
9 Questions Answered
While generics are marketed as identical to brand-name drugs at a lower price, they are versions reverse-engineered after a patent expires, and must prove bioequivalence (similar absorption in the body) within a specified range, but can differ in manufacturing steps and additional ingredients (excipients).
The FDA was formed in the 1930s after public health disasters involving tainted drugs. Its modern role, solidified after the thalidomide tragedy in the 1960s, shifted to focus on proving both drug safety and efficacy, and emphasizing that the manufacturing 'process is the product.'
This act created a pathway for generic drug makers to gain FDA approval without re-proving safety and efficacy, only bioequivalence. It also included a 'first-to-file' incentive, granting six months of market exclusivity to the first approved generic, which significantly boosted the industry.
PEPFAR, a U.S. initiative to combat AIDS in Africa, relied on low-cost Indian generics. The FDA's expedited approval of these Indian companies for PEPFAR inadvertently legitimized them, paving the way for them to enter the profitable U.S. market.
An FDA investigator, Peter Baker, found some element of data fraud or manipulation in four-fifths (80%) of the 86 drug plants he inspected in India and China over five years, indicating that such practices are endemic.
Patients should ask their pharmacist for the manufacturer of their generic drug, inquire about other available manufacturers, and consider using independent brick-and-mortar pharmacies where they can have a direct dialogue with a pharmacist.
The FDA's drug approval and enforcement/investigation arms operated in silos, with the approval side continuing to process applications, including for major drugs like generic Lipitor, even as investigators uncovered widespread fraud.
Ranbaxy fabricated or manipulated data for over 200 drug products in 40 countries, including making up data, altering test results, performing all stability testing on the same day, and even using brand-name drugs for testing to make their own appear bioequivalent.
The SAR (Self-Assessment Report) was a 24-slide PowerPoint presentation created by Dinesh Thakur and Raj Kumar, detailing systemic fraud across Ranbaxy's global drug filings, which was presented to the company's board of directors.
48 Actionable Insights
1. Investigate Your Own Drugs
Utilize Catherine Eban’s website guide (CatherineEban.com) to learn how to investigate your own medications, beginning with identifying the manufacturer of your specific drug.
2. Ask Pharmacist for Generic Manufacturer
When picking up a generic prescription, always ask your pharmacist for the manufacturer’s name and inquire about other available manufacturers, as this information is crucial for informed choices.
3. Prioritize Authorized Generics
When available, prioritize ‘authorized generics’ because they are produced by a generic company in partnership with the brand-name manufacturer, often using the original drug recipe, which may indicate higher quality.
4. Use Independent Pharmacy for Dialogue
Opt for an independent brick-and-mortar pharmacy to facilitate direct conversations with a pharmacist about drug manufacturers and quality, which can be more challenging with large chain pharmacies.
5. Perform Due Diligence on Generic Drugs
Medical practices should perform thorough due diligence on all prescribed generic drugs by identifying manufacturers, researching public filings, and creating a ‘probabilistic heat map’ to inform safer prescribing choices.
6. Diagnose Drug Supply, Not Just Patients
Physicians should expand their diagnostic approach to include the quality of the drug supply, especially when patients become unstable after switching from brand-name to generic medications.
7. Investigate Unexpected Generic Drug Response
Physicians should investigate when objective lab results do not respond as expected to a generic drug, considering if the patient is taking the medication or if the generic itself is ineffective.
8. Monitor Generic Extended-Release Efficacy
Patients and physicians should be aware that generic extended-release drugs may not work as effectively or could cause different side effects compared to their branded counterparts.
9. Exercise Caution with Overseas Drugs
Exercise extreme caution regarding drug quality from manufacturing plants in India and China, as extensive inspections revealed endemic data fraud and manipulation in four-fifths of facilities.
10. Take Ownership of Drug Supply Knowledge
Take personal responsibility for understanding your medication supply by actively paying attention to who manufactures your drugs and how they are intended to function, rather than assuming equivalence.
11. Price Compare Drugs with GoodRx
Utilize apps like GoodRx to compare medication prices across various pharmacies, which can be particularly useful when opting for independent brick-and-mortar pharmacies.
12. Request Specific Generic Manufacturer
If you have a preferred generic drug manufacturer based on your research, ask your pharmacist if they can order that specific product from their wholesalers.
13. Beware Endemic Overseas Data Fraud
Be aware that egregious forms of data fraud, including shredding documents, employing data fabrication teams, and conducting secret tests, are endemic in Indian and Chinese drug manufacturing plants.
14. Beware ‘Too Perfect’ Data
Be suspicious of data that appears ’too perfect’ or exactly matches expected results, as this can be a significant red flag for manipulation or fraud.
15. Guard Against Minor Moral Infractions
Be vigilant against minor infractions and their rationalizations, as they can lead individuals and organizations down a ‘slippery moral slope’ towards significant corruption and unethical behavior.
16. Act on Conscience for Public Health
If you uncover severe ethical violations that compromise public health, follow your conscience and take action, even if it entails personal risk or difficulty.
17. Understand Global Drug Supply Chain
Recognize that 80% of active ingredients and the majority of generic drugs in the U.S. supply, including antibiotics, are sourced from overseas, primarily India and China.
18. Foster Strong Compliance Culture
Cultivate a strong ‘culture of compliance’ within organizations through consistent training, ethical reinforcement, and the presence of vigilant regulatory oversight to ensure adherence to rules and standards.
19. Advocate for Regulatory Agency Funding
Advocate for increased funding, resources, and authority for critical regulatory bodies like the FDA, as they are often under-resourced despite safeguarding a significant portion of the economy and public health.
20. Grant Subpoena Power to Regulators
Advocate for granting subpoena authority to regulatory agencies like the FDA, as their current lack of this power can significantly hinder investigations into corporate misconduct.
21. Hold Brand Companies Accountable for Generics
Advocate for a system that holds brand-name companies responsible for the quality and authenticity of their authorized generic products, creating a dual layer of oversight beyond regulatory bodies.
22. Support Congressional Drug Supply Oversight
Support ongoing congressional efforts to investigate and address problems within the drug supply chain, particularly when FDA findings of egregious conditions are reportedly downgraded.
23. Support Podcast for Exclusive Content
Become a member to support the podcast and gain access to exclusive benefits, including full show notes, downloadable transcripts, AMA episodes, and deals on products Peter loves.
24. Share Genuine Product Enthusiasm
Feel free to openly share your enthusiasm for products you genuinely love and use, even without financial affiliation, as Peter Atiyah does with Topo Chico.
25. Acknowledge Strong Emotions
Recognize that it’s normal to still experience strong emotions like anger, even if you practice mindfulness, as exemplified by Sam Harris.
26. Investigate Widespread Product Complaints
If you receive consistent and numerous complaints about a product or service, especially when official explanations are dismissive, consider engaging investigative resources to uncover the truth.
27. Trust Investigative Intuition
When a credible source presents a significant and intriguing problem, trust your intuition if it suggests there’s substantial depth to the issue, prompting further investigation.
28. Evaluate Process for Product Quality
When assessing product quality, especially for complex items like drugs, prioritize evaluating the integrity and control of the manufacturing process, as ’the process is the product.’
29. Deep Dive Beyond Checklists
For effective inspection or auditing, move beyond simple checklists to scrutinize underlying procedures and critical operational parameters, rather than just visible outcomes.
30. Consider Full Supply Chain Oversight
Recognize that effective regulatory oversight and quality control should extend to all raw materials and components entering a manufacturing process, not just the final production site.
31. Choose IP Protection Strategy
When protecting intellectual property, evaluate whether to use trade secrets for perpetual secrecy or patents for limited-term protection with disclosure, considering the long-term implications for your business.
32. Create Robust Patent Protection
Brand-name companies should strategically patent multiple aspects of a drug, including formulations and manufacturing steps, to create a comprehensive ‘patent thicket’ for extended protection.
33. Employ Reverse Engineering for Generics
Generic drug manufacturers can legally circumvent existing patents by reverse engineering branded drugs and reordering manufacturing steps to achieve the same end product.
34. Develop Generic Formulations Independently
Generic drug manufacturers must independently develop their formulations, including excipients, dissolution profiles, and stability data, as the proprietary ‘drug master files’ of brand-name companies are not disclosed.
35. Understand Generic Drug Approval Process
Be aware that generic drug approval involves both a review of submitted data in an Abbreviated New Drug Application (ANDA) and a pre-approval inspection of the manufacturing facility.
36. Prioritize First-to-File Generic Strategy
Generic drug companies should prioritize being the first to file and secure approval for a drug, as this grants a lucrative six-month market exclusivity period allowing for significant profitability.
37. Investigate Suspected Regulatory Corruption
If you suspect regulatory corruption or unfair competitive practices, consider hiring private detectives to uncover evidence, as Mylan did when facing unusual drug approval delays.
38. Implement Strict Application Integrity Policies
Regulatory bodies should implement stringent pre-approval inspections and an ‘application integrity policy’ to remove applications and halt pipelines of companies found to be falsifying data.
39. Recognize Skewed Corporate Morality
Understand that some corporate cultures may disproportionately punish minor infractions while overlooking or even rewarding severe ethical breaches that jeopardize public safety.
40. Use Pseudonym for Whistleblowing
If you need to blow the whistle on corporate misconduct, consider using a pseudonym and a burner email account to protect your identity, especially when facing potential retaliation.
41. Persist and Escalate Serious Reports
If your initial reports of serious issues are dismissed, persist in communicating the problem and escalate it to higher authorities, clearly articulating the crime and its urgency.
42. Recognize Regulatory Silos
Understand that large regulatory agencies may have internal silos where different departments operate independently, potentially leading to a lack of coordinated action on critical issues.
43. Utilize Full Regulatory Enforcement
Regulatory bodies should fully utilize their existing enforcement tools, such as the ‘application integrity policy,’ to suspend or revoke approvals for companies engaged in systemic fraud.
44. Prepare for FOIA Inefficiency
When attempting to obtain information from government agencies, be aware that Freedom of Information Act (FOIA) requests can be slow and often ineffective, necessitating alternative strategies like cultivating internal sources.
45. Question Regulatory Information Hiding
Be critical when regulatory bodies appear to withhold crucial investigative information from oversight committees, as this behavior might suggest political pressure or deeper systemic issues.
46. Understand Cultural Business Influences
Recognize how cultural concepts, such as ‘Jugaad’ in India (achieving goals by any means necessary), can influence corporate behavior and potentially lead to disregard for regulations and ethical standards.
47. Audit QC Labs and Metadata
For effective inspections, particularly in overseas manufacturing plants, focus on auditing quality control laboratories and analyzing computer metadata to detect data manipulation and deletion, rather than relying solely on provided physical documents.
48. Follow Catherine Eban’s Work
Follow Catherine Eban on Twitter (@CatherineEban), LinkedIn, and visit her website (CatherineEban.com) for ongoing information and insights on drug quality and related topics.
6 Key Quotes
The process is the product.
Katherine Eban
If you're going to the level where you are fabricating data to this extent, at best, you're shipping a placebo pill. That would be the best scenario. At worst, you're not even taking the time to ensure you're shipping a placebo.
Peter Attia
We have falsified data in every market where we sell drugs. In every product that we sell, we have done it simply for the purpose of facilitating our business needs. We have put all our partners at risk. And there is only one solution, which is to notify every regulator in every country where we sell our drugs, pull all our drugs off the market, and fly right.
Katherine Eban
Who cares? It's just blacks dying.
Medical Director of Ranbaxy
Jugaad is a sort of spirit of creativity that allows you to overcome obstacles... But Jugaad has a very dark connotation, which means it's basically eliminating all obstacles and getting to the desired goal by the shortest, by any means necessary.
Katherine Eban
Most people don't pay attention to it because the FDA has told us that it's all equivalent. There's nothing to pay attention to. They've got it. There's no difference between brand and generic, generic and generic. It's all the same.
Katherine Eban
1 Protocols
How to Investigate Your Own Drugs
Katherine Eban- Figure out who manufactured your drug (check the dispensing label or ask your pharmacist).
- Ask your pharmacist who else makes the generic version of your drug.
- Consider switching between generic manufacturers if you have concerns or issues with a particular drug.
- Prefer independent brick-and-mortar pharmacies for direct dialogue with pharmacists about drug quality and manufacturers.