ARE GENERIC DRUGS SAFE AND EFFECTIVE? – THE WONDERS WE CREATED AND THE POTHOLES WE DUG

Reality is a crutch for people who can’t cope with drugs. Lily Tomlin

A New York Times article tells of employees at the large Wockhardt facility in India who were “knowingly throwing away vials of insulin that contained metal fragments” and were caught. They were seen by Peter Baker, a man who spent six years inspecting generic factories in India. He discovered some if the company’s employees were fabricating, backdating and falsifying. Some of the data in 29 of the 38 plants he inspected was allegedly fraudulent or deceptive.²

Wockhardt is India’s 5th largest pharmaceutical manufacture and has 8600 employees worldwide. And it’s not the only company where short cuts and violations were detected. In 2014 the FDA sent cautionary letters … to companies operating plants in Australia, Austria, Canada, China, Germany, Japan, Ireland, and Spain.” They discussed manufacturing and packaging violations, testing, quality checks,..data collection, and contaminated products.^”

I’m not saying that brand name medications are safer than generics. According to Consumer reports “Many brand-name drugs are produced overseas, often in the same plants as the generic equivalents.”³

In her excellent book, Bottle of Lies, Katherine Eban tells the story of how one of the large producers of drugs in India entered the American market. Then they cheated, deceived, and ultimately went under.⁴

The company in question, Ranbaxy, was incorporated in 1961 by Bhai Singh, a member of a wealthy Sikh family. It initially distributed cheap Japanese pharmaceuticals and had one factory that “reformulated bulk drugs into tablets and capsules.” In 1968 the company created and marketed a generic version of Valium. The drug became a best seller and Ranbaxy had value. The sons of the founder were studying in the U.S. and they came home. Over the next twenty years they were welcomed into the family businesses, and they eventually started fighting over who was in charge. In 1995 Ranbaxy entered the U.S. market and seemed to be playing by rules set down by the FDA.

The U.S agency inspects and checks manufacturers, but they also expect companies to police themselves, keep records, and submit them to the agency. The rules for good manufacturing practices were created in the early 1960s. Each critical step has to be performed and documented competently. Each batch of drugs needs a record. The policy calls for “preventative and corrective action,” and Ranbaxy seemed to be compliant. Not that the company had the same ethos as their competitor Cipla. A Gandhi inspired pharmaceutical company, Cipla was clean, well run, and was devoted to supplying medicines to the underserved. Ranbaxy was in business to make a profit. But they were competent and efficient; and the company grew in size and importance. Then they hired an expert to computerize their data and he took his job seriously and the company started to unravel.

In November 1984 Congress unanimously passed the law that turned the drug market on its head. It allowed generic drugs to enter the market without undergoing redundant testing. It had its flaws and created new dilemmas. (See Hatch Waxman in the FDA chapter.). Some contend that the recent creation of a number of high priced medications is in part a reaction to the revenue big Pharma lost to generic competitors.¹³

Before the 1984 law most U.S. medications whose patents had expired—drugs that were in the public domain –were still made and sold by one and only one pharmaceutical company. They distributed the medication and determined its price. Other companies could not market an exact replica of a drug U.S. unless or until their product survived a double blind control study. Half the subjects had to be given a real drug and half a placebo—a dud. These kinds of investigations were expensive, time consuming, and, since half the people were being deprived of a known medication, the studies were potentially unethical. Only 13 percent of U.S. prescriptions were written for generic medications.

The new law changed everything, and by 1994 copy cats accounted for half the drugs that were prescribed. During the early months and years that followed the changes, the FDA was flooded with fraudulent drug applications, and the agency got tough and created and enforced a number of new policies.

Each drug producing establishment was supposed to be checked every 2 years. That wasn’t possible, so the FDA employed a model that relied in part on the risk. The company’s inspection history helped tell them which facilities to scrutinize. Foreign offices did some of the inspections. Between the years 2000 and 2008 the FDA conducted over a 1000 domestic inspections a year and fewer than 400 check ups in foreign countries. ¹⁴

By 2012, 84 percent of the pharmaceuticals used by Americans moved along the assembly lines of generic manufacturers.

It’s not easy to create a drug that is truly generic. Not because manufacturers have a problem acquiring the needed chemicals. They don’t. A medication’s active ingredient, the substance that lowers a person’s blood pressure, slows clotting, or sinks the level of sugar in the blood can usually be purchased. It’s often produced in large quantities in factories (commonly in China.). Once the patent for the original medication has expired sophisticated chemists seem to know what to do.

Most medications are part API’s—active pharmaceutical ingredients. And part “excipients”–inactive substances. Drugs become truly generic when their active and inactive substances are absorbed like the brand named drug, when they circulate, reach the right blood level at the right time, and when they work as long as the original drug. Nowadays the original fabricator usually patents the various manufacturing steps, so generic manufacturers have to use a different path to produce the product.

“The U.S.’s top 5 sources of pharmaceutical imports by “value”–not quantity– (in 2015) were Ireland, Germany, the U.K., Switzerland and India.” Indian companies produce large volumes of cheap generics that are no longer patent protected. The medications “account for 22 percent of spending,” China doesn’t sell many “finished drugs” but they produce 40% of the global chemical components used for our medications.¹

Companies that produce a drug and sell a medication in the U.S. need to tell the FDA the name and business address of the manufacturer. In 2009 over a thousand generic plants applied to the FDA for permission to sell their drugs here. 43% of the plants were in China; 39% in India.

One of the problems that doomed Ranbaxy, the company that motivated Eban to question generic drugs, was the way the company handled their version of the acne medicine Accutane. Their product was called Storet. Ranbaxy was ready to market their drug when further testing showed the generic formulation wasn’t absorbed appropriately. Small quantities of the drug had worked in the lab, but when the company started producing it in quantity it “was failing”. Ranbaxy should have delayed its launch, kept it off the market until they figured out how to correct the problem. But they decided to sell the defective medication to the public while the company’s scientists tried to figure out what they were doing wrong. They “concealed the problem from regulators”, and they memorialized their findings and decisions in a dossier that was labeled “DON’T SHOW TO THE FDA.” That decision would come back to haunt them.

As Eban explained in her book, drug companies were expected to emphasize quality over cost. “Manufacturing processes had to be transparent, repeatable, and investigate-able.” There’s, apparently, always some variation between batches of medicine, so companies are expected to test each group and keep real time records of each drug making step.

At one point Ranbaxy was getting big, and it was hard to keep track of what was happening in their factories. So they hired a data expert who was born in India and learned his trade while working for the American drug manufacturer Bristol Myers Squibb. His name was Dinesh Thakur and he took his job seriously. Before he could computerize figures from the company’s many factories he had to collect the information. He sent his assistants to the facilities, and one by one they came back empty handed. Ranbaxy, it turned out, had been faking the data that “showed” each batch was tested. They were telling the FDA they were regularly checking the drugs that came off their assembly lines, and they were claiming they had proved that each batch was “properly formulated, stable, and effective.” But half the information submitted to American and European regulators was bogus. Drugs sold to people in India were not tested for stability and bioequivalence. Adverse events were not reported to the FDA. The drugs may or may not have performed appropriately. The data that said they were up to snuff looked impressive, but it was phony. Drugs made for third world countries were formulated using relatively impure, cheaper ingredients. Sometimes, instead of testing products they made, people at their factories would crush and test brand named drugs. Documents were back dated.

In 2004 after his team gathered proof, Thakur reported to his boss, Raj Kumar. It took a little convincing but eventually Raj was persuaded. The company was systematically faking data. The board of directors had to be notified. Raj created a power point explanation of what was happening. He believed the drugs that had been misrepresented had to be pulled from the market and the company had to reapply to the FDA.

He made his presentation to the people in charge. It was called a self assessment report (SAR). When Raj finished, his statement to the board was met with silence. The company leaders didn’t seem surprised, and they weren’t willing to admit they were wrong. They would not reapply to the FDA. Kumar was told to destroy his slides and presentation—the SAR. As a result of the leadership’s refusal Kumar resigned. That was in October 2004.

Thakur stayed but was troubled by many of the company’s products. He worried about the HIV fighting drugs that were being shipped to Africa. “He knew they were bad, degraded easily, and would be useless in the heat of Sub Saharan Africa.” Two years after he joined the company Thakur resigned. But he remained troubled. Four months later Thakur assumed a pseudonym and started writing, initially to the World Health Organization, then to several FDA officials, and ultimately an FDA commissioner. He told them Ranbaxy was faking data. –that they were fabricating information to support stability.” At the time whistle blowers in India had sometimes been killed, and Thakur felt he had to hide his identity. But he also felt compelled to act because he believed “executives at India’s biggest pharmaceutical company had committed intentional global fraud.” The people at the FDA who received the emails Thakur sent didn’t know what to do. Ranbaxy was a huge company with multiple factories and paper work that seemed impeccable.

In India companies were always notified when the FDA was sending an inspector. Visits were scheduled and manufacturers had days to make their facility spotless. And that was a potential problem. Sometime during the subsequent year the company was checked out by an FDA examiner who, apparently, didn’t know about the allegations. He believed the company was honest and honorable. He spent his days identifying and pointing out deficiencies, and he gave the factory a passing grade. The people at Ranbaxy thanked him and promised to fix the problems. By February 2006, having received multiple surreptitious emails from Thakur, a few people in the FDA had grown suspicious. The Ranbaxy factory was re-inspected. This time two hardnosed investigators surveyed the plant. They found deficiencies, and the FDA stalled one of the company’s new drug applications. Eventually, on Feb 14, 2007 officers carrying guns and wearing bullet proof vests raided Ranbaxy’s New Jersey facility. They carried away hard drives and a copy of the company’s internal report on their Accutane drug. It was labeled DO NOT GIVE TO FDA, and it proved someone in the company had lied. But it didn’t provide evidence of systemic fraud. FDA investigators tried to contact Raj Kumar, the man who gave the power point presentation, and he evaded them. A company lawyer warned Raj to “be careful about what he tells the FDA because he had exposure.” Some leaders at the FDA found it hard to believe that a company with manufacturing plants in eleven countries and sales in 125 nations was systematically providing fraudulent data.

About that time Tsutomo Une, a leader of a Japanese pharmaceutical house Daiichi Sankyo, contacted the head of Ranbaxy and spoke of a joint venture. His company wanted to grow. Japanese drug manufactures were at the time (and still are) known to be leaders in the field of quality control. The leaders of the two firms met a number of times. Within 4 months a merger of sorts seemed likely, but Une was hesitant. It was public knowledge that the Indian company had been raided and had received warning letters from the FDA. Malvinder, head of Ranbaxy told Une that the raid was really incited by Pfizer. They were trying to get back at Ranbaxy because the Indian company had “prevailed in the Lipitor patent litigation.” And Une believed him.

But Malvinder was worried. His lawyers learned that when the FDA raided the New Jersey Ranbaxy headquarters, among the data they had hauled away was the 2004 SAR. It was a smoking gun and showed that Ranbaxy had been faking the data they presented to the FDA. Malvinder fretted but didn’t tell his Japanese counterpart.

In 2008 Daiichi Sankyo became Ranbaxy’s principle share holder. In September 2008 the FDA barred the import of 30 drugs from two Ranbaxy plants, and in early 2009 the FDA formally issued an “AIP.” The letter notified the company that the agency believed it had evidence that the company’s applications had been “fraudulent or unreliable.” Malvinder was forced to resign as head of Ranbaxy. He paid a large fine to the FDA but avoided criminal prosecution. He was later sued by the Japanese and was forced to pay them $550 million for overstating the value of his company. Ranbaxy agreed to plead guilty to three felony counts of violating the federal drug safety law and four counts of making false statements to the F.D.A. The company also admitted that they failed to complete the proper safety and quality control tests on several of the drugs that were manufactured in the Indian factories. We probably would not have learned that Ranbaxy was faking their data had it not been for a troubled whistle blower.

In subsequent years the FDA’s presence in India has gradually expanded. They claim to have more than a dozen full-time staff. Inspections are (officially) frequent and increasingly unannounced. If the agency finds problems, it issues a Form 483, a notice outlining the violations, which if not resolved can lead to a warning letter and in worst case, a ban. Violations range from hygiene, such as rat traps and dirty laboratories, to inadequate controls on systems that store data, leaving it open to tampering.⁵.

Eban’s book goes on to tell of a few other companies that cheated. .

In the early 1990s an FDA inspector observed Sherman Pharmaceuticals of Louisiana burning medication that was returned due to contamination. Penalized in 1995, the company went out of business.

In 2007, the anticoagulant heparin was manufactured by the American company, Baxter, and it made kids who were receiving kidney dialysis sick. The substance that caused the harm turned out to be a contaminant in the Chinese chemicals that were used to make the heparin. And there were others.

In 2012, Congress passed the FDA Safety and Innovation Act. It directed the FDA to inspect foreign facilities as frequently as domestic plants.

In 2013 “the Indian government approved the addition of seven new FDA drug investigators, and brought the total number of Americans checking their facilities to 19.
That year the number of inspectors in China went from 8 to 27.”
By 2014 the FDA was complying with the law. They conducted over 800 inspections in the U.S. that year and they checked an equal number of facilities abroad.
By July 2016 965 foreign production facilities had never been inspected. And before 2020 the agency had, at least once, assessed 495 or 51% of them.¹⁴

Based on the Ranbaxy story and numerous interviews Eban asks a very important question: Should brand name and/or generic pharmaceuticals be trusted? It’s an especially important question because more than 40 percent of finished drugs used in the U.S., and 80 percent of active pharmaceutical ingredients are produced overseas. Pharmaceutical factories are scattered around the globe. There’s a lot of money involved, and people sometimes cheat.

Deception by major players, sadly, is not confined to the generic pharmaceutical industry.
In 2015 the environmental protection agency discovered that 11 million diesel autos made by Volkswagen contained a special device that allowed the company to intentionally lie about their emissions. The company admitted guilt and paid a $25 billion fine.
In 2008 the former head of Nasdaq, Bernie Madoff, admitted he had, over many decades, “conned his investors out of $65 billion.” He went to jail.
More recently airplane manufacturer Boeing, fitted some of its newer planes with large engines and special software but failed to train some of the pilots. Their actions led to the crash of two air craft and the loss of hundreds of lives.
Early in this century huge trusted banks sold collections of mortgages whose quality was falsely inflated. When housing prices started dropping in 2007, the values of these mortgages plummeted and the banks didn’t have enough cash to avoid a run. The economy was saved by a $16.8 trillion dollar government bailout. .

In the EU, national competent authorities are responsible for inspecting manufacturing sites located within their own territories. Sites outside the EU are inspected by the State where the EU importer is located or by the manufacturing country’s examiners.

If products are imported directly into more than one member state from a manufacturing site outside the EU, there may be more than one responsible authority. Routine inspections are performed using a risk-based approach and when there is suspicion of non-compliance.⁷

Facilities in Europe are apparently rarely inspected by our FDA. Thanks to the 2012 Food and Drug Administration Safety and Innovation Act, the FDA turned over the inspection of meds made in Europe to the inspectors of each country.⁸

Pharmaceutical manufacturing is a large global industry.
In 2003, worldwide pharmaceutical industry sales totaled $491.8 billion.
The U.S. accounted for 44 percent of global industry sales for a total of $216.4 billion.
The ten largest pharmaceutical corporations made almost 60 percent of total U.S. sales in 2004.
There are a few pharmaceutical companies that participate in both the branded and generic parts of the industry.

All manufacturers use electronic bar-coding technology on drug packaging. Hospitals claim bar coding each pill makes it less likely a sick in-patient will be given the wrong medication. In Europe (starting in 2019), all marketed medicines need a 2D Barcode. Central verification systems are supposed to be able to trace each and every medication.

Hospitals in Holland have shown that when all Single Unit of Use Packages contain the correct barcode – record, doctors and nurses make fewer mistakes.¹⁰ .

In the U.S. the person who fills a prescription and puts the medication in his or her body is not informed of its country or manufacturer of origin. The side of the refill bottle of a prescription medicine I take has a bar code. It is 8 numbers long and I don’t know how to access the information it encodes. If the pill doesn’t work or causes a reaction I currently am unable type the numbers into a web site and get that information. What if everyone could post medication problems with details about where the drug was manufactured on a web site that others or the FDA could check?

Pharmacy benefit managers choose which drugs we take on the basis of price, kickbacks, quality, and reliability. How do financial incentives affect quality of our drugs?

ARE GENERIC DRUGS SAFE AND EFFECIVE? The world has bad actors and cheaters, but most companies and inspectors take pride in their work. They don’t want to let their friends and neighbors down, and they strive to avoid creating or choosing an inferior, worthless or harmful product.