The Ranbaxy whistleblower and the scheme to fool the FDA
Earlier this week, the feds finally reached closure with Ranbaxy Laboratories with a $500 million deal to settle criminal and civil charges for a serious and widespread manufacturing ruse. The generic drugmaker was charged with using raw chemicals from unapproved sources, fabricating in-house test data to meet FDA standards and concealing these activities from FDA inspectors by falsifying records (back story).
In short, there was a systemic cover-up that Ranbaxy perpetuated for nearly a decade in order to boost profits and maintain its edge as a leading purveyor of low-cost generics to the world. Scientists were ordered to manipulate reports; other employees were forced to illegally carry supplies of brand-name drugs to India and duplicitous statements were issued by high-ranking executives. All the while, ceo Malvinder Singh (pictured), a grandson of the founder, screamed for more profits.
Along the way, the scheme fooled Daiichi Sankyo, which paid $4.6 billion for Ranbaxy five years ago (read this), and raised troubling questions about why the FDA failed to have Ranbaxy drugs removed from the market even after an import ban was issued for 30 of its medicines made in India and a consent decree was put in place. Most important, countless patients in numerous countries for years took drugs that were ineffective or unsafe or both.
The scheme unraveled with the help of Dinesh Thakur, who was born in India but was trained in the US as an engineer and spent a decade at Bristol-Myers Squibb before a mentor recruited him to return to work for Ranbaxy. Not long after his arrival, though, his supervisor confided that he had uncovered disturbing details about various drugs, setting off a years-long quest to end the charade.
The story and the role he played, which is told by Fortune, is one of the more sensational scandals to grip the pharmaceutical industry and the FDA. “The culture of the company was corrupt to its core,” says David Nelson, a former Congressional staffer who oversaw a House investigation into Ranbaxy. And he remains angry that a wider FDA recall was never issued. “There’s something here that just reeks.”
As one might imagine, there was the usual corporate intrigue and acting out. Executives who stumbled across problems and complained they were ignored or bullied. There was a raid on Ranbaxy offices in New Jersey (look here). And Thakur, who will receive more than $48 million for his role as a whistleblower, hired private security to guard his family and home after resigning.
The story, which relies on court records, FDA documents and internal e-mails, also notes the problems were so pervasive that even Ranbaxy employees in India were wise to how the system was being gamed and confessed they would not have taken drugs made by their own employer. What becomes of those harmed by Ranbaxy drugs? This remains unclear (read this). Meanwhile, read the story here…
Source: Pharmalot
