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| Malvinder Singh, 2004 |
Ranbaxy got the U.S. legal monopoly on making the generic version of Lipitor, the world's biggest drug. It also made a host of others, such as amoxicillin, the traditional antibiotic given to babies with earaches.
The article is slow to get going, but it just builds and builds.
By the way, I had been hearing the name "Ranbaxy" for a number of years, but I had absolutely no clue how corrupt it was. Consider Ranbaxy Laboratories Wikipedia page as of May 25, 2013, which is mostly cheerleading and doesn't yet mention Eban's 10-day-old article.
As you read it, consider Ranbaxy from the perspective of conspiracy theories. It would be not unreasonable to consider Ranbaxy a giant conspiracy to defraud the world's patients. And yet ... very few people, including company insiders, competitors, regulators, investors, patients, and journalists, seem to have noticed before Eban's article pulled it all together to show us how deep the rabbit hole goes.
People like to imagine conspiracies as well-oiled organizational machines, but this one was comprised merely of incompetence, carelessness, greed, bad temper, and a whole lot of people assuming that things can't be as bad as they look.
Dirty medicine
May 15, 2013: 9:03 AM ET
The epic inside story of long-term criminal fraud at Ranbaxy, the Indian drug company that makes generic Lipitor for millions of Americans.
By Katherine Eban
1. The assignment
FORTUNE -- On the morning of Aug. 18, 2004, Dinesh Thakur hurried to a hastily arranged meeting with his boss at the gleaming offices of Ranbaxy Laboratories in Gurgaon, India, 20 miles south of New Delhi. ...
[Thakur's boss] Kumar said, "We are in big trouble," and motioned for Thakur to be quiet. Back in his office, Kumar handed him a letter from the World Health Organization. It summarized the results of an inspection that WHO had done at Vimta Laboratories, an Indian company that Ranbaxy hired to administer clinical tests of its AIDS medicine. The inspection had focused on antiretroviral (ARV) drugs that Ranbaxy was selling to the South African government to save the lives of its AIDS-ravaged population. ...
As Thakur read, his jaw dropped. The WHO had uncovered what seemed to the two men to be astonishing fraud. The Vimta tests appeared to be fabricated. Test results from separate patients, which normally would have differed from one another, were identical, as if xeroxed.
Thakur listened intently. Kumar had not even gotten to the really bad news. On the plane back to India, his traveling companion, another Ranbaxy executive, confided that the problem was not limited to Vimta or to those ARV drugs.
"What do you mean?" asked Thakur, barely able to grasp what Kumar was saying.
The problem, said Kumar, went deeper. He directed Thakur to put aside his other responsibilities and go through the company's portfolio -- ultimately, every drug, every market, every production line -- and uncover the truth about Ranbaxy's testing practices and where the company's liabilities lay.
Thakur left Kumar's office stunned. He returned home that evening to find his 3-year-old son playing on the front lawn. The previous year in India, the boy had developed a serious ear infection. A pediatrician prescribed Ranbaxy's version of amoxiclav, a powerful antibiotic. For three scary days, his son's 102° fever persisted, despite the medicine. Finally, the pediatrician changed the prescription to the brand-name antibiotic made by GlaxoSmithKline (GSK). Within a day, his fever disappeared. Thakur hadn't thought about it much before. Now he took the boy in his arms and resolved not to give his family any more Ranbaxy drugs until he knew the truth.
What Thakur unearthed over the next months would form some of the most devastating allegations ever made about the conduct of a drug company. His information would lead Ranbaxy into a multiyear regulatory battle with the FDA, and into the crosshairs of a Justice Department investigation that, almost nine years later, has finally come to a resolution.
On May 13, [2013] 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.
$500 million.
(No current or former Ranbaxy executives were charged with crimes.)
In China, some executives would have been shot a long time ago. But India is all post-modern and not into that kind of out of date harshness.
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.
$48 million?
... More than 80% of active pharmaceutical ingredients for all U.S. drugs now come from overseas, as do 40% of finished pills and capsules. ... Today's global market for generic drugs is $242 billion and growing. ...
Ranbaxy was the first foreign generics manufacturer to sell drugs in the U.S. and rose rapidly to become, today, the sixth-largest generic-drug maker in the country, with more than $1 billion in U.S. sales last year (and $2.3 billion worldwide). The company, now majority owned by Japanese drugmaker Daiichi Sankyo, sells its products in more than 150 countries and has 14,600 employees.
As our dependence on generic drugs from overseas has grown, so have questions about their oversight and safety. A report by the Government Accountability Office found that in 2009, regulators inspected only 11% of foreign drug manufacturing plants, while they inspected 40% of domestic ones.
... Due to complex logistics, foreign inspections can last less than a week and allow companies weeks of advance notice, while domestic ones can last up to six weeks and are unannounced. ...
[Ranbaxy] is not a tale of cutting corners or lax manufacturing practices but one of outright fraud ...
This is an important gestalt: regulators kept giving Ranbaxy a pass because they assumed it was cutting corners but that while, sure, the glass was a little bit empty, it of course was mostly full. Nope.
It was very hard for anybody to take the red pill and wake up to the fact that this giant business, which sold to the Japanese for $4.6 billion in 2008, wasn't really a respectably corporate giant with an occasional lapse, but a big criminal enterprise that sometimes managed to deliver pills that more or less worked.
The rough outlines of the fraud at Ranbaxy first emerged in a 2008 court filing by the Justice Department. But its extent and depth and the involvement of top company executives have not been previously revealed. Fortune has also uncovered evidence that the company's misconduct continued well into 2009, even after the FDA restricted the company's activities.
This account is based on more than 1,000 confidential Ranbaxy documents, including internal reports, memos, e-mails, hundreds of pages of FDA documents obtained through Freedom of Information Act requests, and court records. Fortune interviewed more than a dozen former and current employees, as well as 40 scientists, public health experts, patient advocates, congressional investigators, and regulators.
As the Ranbaxy story makes vividly clear, generic-drug makers intent on breaking the rules -- especially those operating abroad -- can easily do so. Drug applications work on the honor system: The FDA relies on data provided by the companies themselves. ... The approval system "requires the ethical behavior of the applicant," he said. Otherwise, "the whole house of cards will fall down."
In 2008 the agency halted the importation of 30 different drugs from two of Ranbaxy's manufacturing plants in India and invoked a rare Application Integrity Policy, stopping the review of new drug applications from the Paonta Sahib manufacturing site until Ranbaxy proved their truthfulness.
This reversal of the burden of proof is the gestalt I was talking about.
But, bear in mind that Ranbaxy still kept its prize -- the legal right to be the only company in the world to manufacture a generic version of Lipitor, Pfizer's anti-cholesterol drug that was the big revenue generator in the world. Ranbaxy had the right to introduce generic Lipitor in November 2009, but just beforehand, Pfizer and Ranbaxy announced a settlement of Pfizer's patent infringement suit that gave Pfizer and extra two years to reap monopoly profits in the U.S.
Being a cynical bastard, I assumed that the wily American company Pfizer had bribed the upstart Indian firm to hold off for two years. The practice of patent holders slipping money to generic rights holders to hold off introducing a rival is known as "pay for delay" and is the subject of an upcoming Supreme Court case.
I now suspect I got the true story 180 degrees backward. I was just not cynical enough about globalization.
Pfizer goes unmentioned in Fortune's article. What their role was in all this is most intriguing.
Pfizer is a firm with a current market capitalization of over $200 billion dollars. Lipitor generated $115 billion in revenue for Pfizer over its last decade of exclusivity. In the years 2010 and 2011, when Ranbaxy was conceding to Pfizer two more years of lucrative American monopoly on the drug, Pfizer's American revenue on Lipitor totaled about $10 billion over two years, in comparison to about $1 billion in 2012 when Ranbaxy finally entered. (What was Pfizer's gross margin on Lipitor?)
How much did Pfizer know about how dirty Ranbaxy was when it settled its lawsuit againt Ranbaxy in late 2009? A lot, no doubt, since the scandals had been vaguely public for several years. And Pfizer would have a lot of incentive to learn even more about Ranbaxy. Did such knowledge play any role in Ranbaxy conceding two more years of American monopoly to Pfizer?
Seems like a pretty interesting topic from a game theory standpoint. Oh, and also because $10,000,000,000 was at stake. Perhaps somebody will someday take an interest in this subject.
... For all the actions taken by federal authorities, there is a deeply troubling aspect to the government's role in the saga of Ranbaxy. Even as ever more details of the company's long-running misconduct emerged, drug regulators permitted Ranbaxy to keep on selling many of its products.
Indeed, the FDA -- charged with protecting the safety and health of Americans -- went even further. Despite the agency's finding of fraud and misconduct, it granted Ranbaxy lucrative rights to sell new generic drugs. In the most high-profile example, in November 2011 the FDA allowed the company to maintain its exclusive first dibs on making the generic version of a medicine taken by tens of millions of Americans: Lipitor. In the first six months, this privilege allowed Ranbaxy to generate $600 million in sales of generic atorvastatin, as nonbranded Lipitor is known.
Should the FDA have been surprised, then, when problems emerged just a year later? In November 2012, Ranbaxy had to recall millions of pills after tiny glass particles were discovered in some of them. Even that, it turns out, was enough for only a temporary suspension, and the FDA permitted the company to resume sales in March.
"The real story is how poorly our government has responded to all of this," says Vincent Fabiano, Ranbaxy's former vice president of global licensing. He's one of a number of former company executives who spoke to FDA or other investigators about the company and then watched in increasing disgust as, for years, nothing seemed to happen. "Still as we sit here today," Fabiano says, "Ranbaxy is in business in the United States."
The company that Dinesh Thakur arrived at in June 2003 was bristling with ambition but had a seat-of-the-pants feel. Fistfights erupted at executive meetings. The vice president of clinical research chain-smoked four packs a day.
... 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.
The last part of that sentence means that to pass tests of their proposed generic drug's accuracy, Ranbaxy smuggled in suitcases full of name brand drugs and then tested the name brand drugs against ... the name brand drugs themselves, not Ranbaxy's proposed generic version. Voila -- a perfect match! Sensational quality control.
... The company not only invented data but also fraudulently mixed and matched data, taking the best results from manufacturing in one market and presenting it to regulators elsewhere as data unique to the drugs in their markets.
Sometimes all the data were made up. ...
Just three decades ago, generic drug companies in the U.S. were derided as patent breakers. They had no clear way to gain FDA approval, while brand-name-drug companies had a lock on the market. The 1984 Hatch-Waxman Act changed that. It created a pathway, the Abbreviated New Drug Application (ANDA), which allowed a generic drug company to simultaneously challenge a patent and demonstrate to the FDA that it could make a drug.
In the late 1980s several generic-drug companies were caught fabricating data and bribing FDA officials to gain approval. In the scandal's wake, the FDA tightened regulations. It required that a company make three large "exhibit" batches to demonstrate that it could dramatically scale up its manufacturing, undergo inspection, and use an independent company to perform bioequivalence tests before an ANDA was approved. The purpose, says David Nelson, who exposed the 1980s scandal as a senior investigator for the House Energy and Commerce Committee, from which he retired in 2009, was to "prevent the systematic submission of false information" to get FDA approval.
The ANDA offered a lucrative reward for the company that risked almost certain litigation by first challenging a patent. If successful, the company got six months of exclusive sales after the patent lapsed, allowing the generics company to charge up to 80% of the brand-name price during that period. After that, other generics companies could jump in, and the price would drop to about 5% of the original price. Being first was the real jackpot. Consequently, first-to-file status became such an obsession that generic-drug company executives camped out in the FDA parking lot to file their paperwork first.
This is a crucial point. You win in the generic drug business less by producing a better product at a cheaper price and more by filing your paperwork of your self-tests with the regulators first. After that, eh ...
Ranbaxy learned how to game this system, according to former employees. To hasten the pace of its applications, Ranbaxy sometimes skipped a crucial intermediate step. Instead of making three medium-size exhibit batches and testing those for bioequivalence and stability, as required, Ranbaxy tested earlier and much smaller research-and-development batches that were easier to control and less costly to make. In some FDA applications, it represented these as much larger exhibit batches and presented the data as proof. And then there was the ultimate shortcut: using brand-name drugs as stand-ins for its own in bioequivalence studies.
These deceptions greatly accelerated the pace of the company's FDA applications. They were also a grave public-health breach. Once Ranbaxy got FDA approval, it leaped straight into making commercial-size batches without any meaningful dry runs. The test results on file with the FDA were meaningless, and the drugs Ranbaxy was actually selling on the U.S. market were an unknown quantity, having never been comprehensively tested before.
In May 2004, three months before Thakur embarked on his research, Dr. Kathy Spreen joined Ranbaxy's U.S. office as executive director of clinical medicine and pharmacovigilance. ... At first, the company's science seemed to exceed her expectations. ... The data showing the concentration of Ranbaxy's drug in the bloodstream appeared to match that of the brand name perfectly. "Look how good this company is," she remembers thinking. "The bioequivalence data is superimposable on the drugs we are modeling."
About a month later, while comparing the data for Sotret, the company's version of the acne drug Isotretinoin [a.k.a., Accutane], Spreen found it similarly superimposable on the brand-name data. That's when she began to worry. "If it's too good to be true," she recalls thinking, "it's probably made up."
... With her suspicions aroused, Spreen began asking her Indian counterparts to send underlying data that supported the test results. They repeatedly promised the information was on the way. When it didn't arrive, she got excuses: It was a "mess"; they'd be "embarrassed." She recalls begging, "I don't care if it's written on the back of toilet paper. Just send me something." But it never arrived. ...
... Spreen kept thinking that if only she could explain American regulations more clearly, Ranbaxy's executives would understand. But no amount of explaining seemed to change how the company did business. When sales of a diabetes drug were sluggish, she says, one executive asked Spreen if she could use her medical license to prescribe the drug to everyone in the company so they could record hundreds of sales. Spreen refused.
... On a trip to India in mid-2004 Raj Kumar quietly confirmed to Spreen what she had already come to suspect: that crucial testing data for many of the company's drugs did not actually exist and submissions to regulators had been forged. ... Along with a number of Ranbaxy executives, Spreen was subpoenaed by congressional investigators to provide witness testimony. Reluctantly, she told them her story years ago -- but nothing ever came of it.
CEO Tempest had assured Kumar that the company would do the right thing. So on an evening in late 2004, several months after assigning Thakur to dig up the truth, Kumar found himself before five members of the scientific committee of the board of directors, including Tempest and the chairman of the board.
Kumar had a PowerPoint presentation of 24 slides. It made clear that Ranbaxy had lied to regulators and falsified data in every country examined in the report. "More than 200 products in more than 40 countries" have "elements of data that were fabricated to support business needs," the PowerPoint reported. ...
Thakur remained behind. But with Kumar's departure, he had lost his protection. Three months after the board presentation, the company's internal auditors arrived at his department for what they called a routine review. They stayed for 10 weeks, combing through his department's books and interviewing staff. In late April the company accused him of browsing porn sites from his office computer....
... Throughout the summer of 2005, Thakur tried to convince himself that the company's medicine was no longer his problem. He was jobless and piecing together haphazard consulting work. He feared for his family's safety. The company had a "reputation for threatening people, bullying people," he recalls. Thakur hired a security company, which posted a guard outside his home 24 hours a day.
... Thakur knew the [AIDS] drugs weren't good. They had high impurities, degraded easily, and would be useless at best in hot, humid conditions.
"useless at best"
They would be taken by the world's poorest patients in sub-Saharan Africa, who had almost no medical infrastructure and no recourse for complaints. The injustice made him livid.
Ranbaxy executives didn't care, says Kathy Spreen, and made little effort to conceal it. In a conference call with a dozen company executives, one brushed aside her fears about the quality of the AIDS medicine Ranbaxy was supplying for Africa. "Who cares?" he said, according to Spreen. "It's just blacks dying."
On Aug. 15, [2005, i.e., almost 8 years ago] four months after resigning from the company, Thakur opened a Yahoo e-mail account and wrote under a pseudonym to top regulators in the U.S., Britain, the WHO, and Brazil. ...
Finally he wrote directly to FDA commissioner Lester Crawford and alleged that Ranbaxy was selling "untested, spurious, ineffective medication." He added, I "plead with you to put a stop to this crime." ...
To Thakur, the wrongdoing was black and white. He had given proof and expected action. But 10 days after the conference call, the FDA announced that it had approved Ranbaxy's application for the first pediatric-AIDS drug for the U.S. market, Zidovudine.
... The agency needed an unvarnished look at the company. But as was standard for an overseas inspection, it notified Ranbaxy almost three months in advance that it was coming. ...
Rivera-Martinez sounded almost plaintive when he wrote to Thakur that spring: "We are under a lot of pressure to approve Ranbaxy's generic version of Pravastatin [a cholesterol-lowering drug] when the patent exclusivity runs out this Thursday."
It had been nine months since Thakur had first contacted the agency. He had watched as Ranbaxy got six new approvals. The FDA agent who had taken charge of his case tried to ease his frustration. "Imagine, if you will, that we were able to prove even half of what you have told us," she wrote to Thakur. "This would bring down the entire corporation. One of the largest in the world." ...
On Feb. 14, 2007, Vincent Fabiano was at his desk at Ranbaxy's U.S. headquarters in Princeton, N.J., when a man he had never seen before walked into his office. "Who the hell are you?" Fabiano asked. "I'm an FDA criminal investigator," the man said. Fabiano noticed the gun on the man's hip and stepped away from his desk as directed.
The building was surrounded by police cars, and panic was spreading. "People were freaking out, crying," recalls a former employee. "They took every computer. There were people with guns." Employees called the search warrant the Great Valentines Day Raid. ...
In January 2006, Malvinder Singh, the founder's grandson, succeeded Brian Tempest as Ranbaxy's managing director and CEO. At 33, with an MBA from Duke University, Singh was brash and competitive. The Indian business press dubbed him the Pharaoh of Pharma, and hailed him as an "out-of-the-box decision-maker."
Others viewed Singh as petulant and immature. "I want profit!" he would yell in meetings, two former employees recall. Among the staff, he was known for being preoccupied with his ranking on the Forbes list of India's 40 richest people. When he and his brother Shivinder fell from No. 9 in 2004 to No. 19 in 2005, despite $1.6 billion in assets, Singh seemed to blame the decline on a lack of employee loyalty, a former employee recalls. ...
On June 11, 2008, Singh stunned the Indian business world by announcing that he and his brother were selling their 34% stake in Ranbaxy to the Japanese drugmaker Daiichi Sankyo for $2 billion. Overall, Daiichi Sankyo shelled out $4.6 billion to take control of the company. Singh agreed to stay on for five years as CEO. Some in the Indian press portrayed the sale to a foreign company as a betrayal of national entrepreneurial pride. ...
Everywhere the FDA had looked, its inspectors found fraud. .... "The culture of the company was corrupt to its core," says Nelson.
As congressional investigators turned up the heat, the agency finally cracked down. In September 2008, it announced it was restricting the import of 30 drug products made by Ranbaxy (11 of which had been approved after Thakur's first contact with the FDA three years earlier). The agency still did nothing to recall the very same drugs on pharmacy shelves all over America, despite finding that Ranbaxy had committed fraud on a massive scale.
Nelson says that under FDA rules, the agency should have required Ranbaxy to recall every one of its drugs and resubmit every application. "Why [should] this company, of all companies, be exempted from normal FDA policies?" he asks. "There's something here that just reeks." ...
For years, many of Ranbaxy's senior executives were expected to do what seemed like a small favor when they traveled to India: carry suitcases full of brand-name drugs that they were told were needed for research and development. At Ranbaxy's U.S. headquarters, suitcases were kept packed with drugs and waiting for the next traveler to India. To some executives, this seemed like a minor shortcut, possibly to cut shipping costs, avoid quarantine, or speed delivery.
Generic-drug companies often study small amounts of a brand-name product in order to reverse-engineer it or to reference it as a point of comparison in applications. But proper channels for purchasing and transporting such drugs are well established and have become "ironclad" since the 2001 passage of the Patriot Act, according to an independent quality-assurance expert.
At Ranbaxy, top executives skirted these regulations and sometimes oversaw the secretive ferrying of drugs, at the very moment when the company faced deadlines to resubmit data to regulators. Fortune was unable to conclusively determine what the suitcase drugs were used for. Some former employees suspect that the company used the brand-name drugs as a substitute for its own in testing (as employees had seen in previous instances), in order to generate pristine data showing how closely Ranbaxy's drug matched the brand it was seeking to replicate.
Whatever the purpose, what's clear is that some Ranbaxy staffers strenuously resisted being used as drug mules. ... Malvinder Singh, then the company's worldwide head of pharmaceuticals, got involved. Through his secretary, he asked who would be taking charge of the samples and when they would reach Gurgaon.
In general, those who carried the drugs for Ranbaxy were given a letter claiming the products were for research and development and had no commercial value. This wasn't true. In June 2004, one executive got stopped by Indian customs with hundred of packs (worth thousands of dollars) of an antinausea drug, Kytril, that he hadn't declared. The drugs were seized, according to internal e-mails. In one, a Ranbaxy executive noted that this was "an illegal way of bringing the medicine in to India."
The illicit drug runs continued well after the company had pledged to the FDA that it would operate squarely within regulations. From 2007 to 2008 alone, 17 executives from the New Jersey office took undeclared drugs through Indian customs, four of them multiple times, according to a document given to the FDA.
In February 2009, a lawyer in the regulatory division at Ranbaxy's New Jersey headquarters got wind of an even more suspicious incident. Some months before, Ranbaxy had agreed to retest its troubled Sotret formulation and submit new data to the FDA. ...He learned that a Ranbaxy senior director had overseen the medicine's unreported purchase from a pharmacist, who had dropped off the boxes at an employee's house. Another employee had hand carried the drugs to London, where one of the company's most senior regulatory executives -- whose job involved making sure that the company followed all regulations -- brought them to India in a suitcase.
When the lawyer reported the incident to the company's top U.S. executives, they told him to drop the matter. Remaining deeply uneasy, in March 2009, he wrote a memo to file, which Fortune obtained, documenting the incident. The company had not only violated the iPledge program, he wrote, but also had "likely violated U.S. Export Laws, U.K. Import and Export Laws and possible Indian Import Laws."
Not long after Ranbaxy purchased the isotretinoin, the company submitted its new data to the FDA, which approved it. Within a year the company was forced to start recalling its Sotret again because the drug was degrading faster than it was supposed to -- the very problem that had been occurring before.
In February 2009 the FDA punished Ranbaxy anew, labeling the company with the drug regulator's version of a scarlet "A": The agency imposed a so-called Application Integrity Policy. That meant a dramatic shift in the regulatory dynamic. No longer would the FDA have the burden of proving fraud if it wanted to block a Ranbaxy product. The onus had flipped, and now the company would have to prove its products weren't fraudulent in order to get them approved.
Gestalt shift. And yet ...
... Within three months, Malvinder Singh stepped down as CEO.
The government seemingly had a trump card in the negotiations -- the final approval for Ranbaxy to sell generic Lipitor. Yet it seemed unable to bring a swift resolution to the process, as the company appeared to play for time. The FDA first sent a draft of the consent decree to Ranbaxy in August 2010, according to a document sent by an FDA lawyer. Six months later, Ranbaxy's lawyers responded, asking for revisions. In a letter to Ranbaxy's lawyers three months after that, an FDA attorney sent further revisions and tried to bring an end to the process, stating, "We believe this response reflects FDA's final position and look forward to Ranbaxy's prompt response which, in our view, should suggest only minor proposed revisions."
It would be eight more months, until January 2012, before the Justice Department announced the consent decree -- and then another 17 months of wrangling between armies of lawyers before the case ended on May 13.
Well before the final resolution, in November 2011, the FDA gave its final blessing for Ranbaxy's version of Lipitor. Asked about the decision to allow Ranbaxy to make Lipitor after its misconduct at two plants was revealed, an FDA spokesman asserts that the agency is required to evaluate a drug application on a "facility-specific basis." The company's "data integrity problems," he says, occurred at facilities different from where its generic Lipitor is manufactured.
That's true -- but it leaves out the fact that Ranbaxy originally applied to make Lipitor at one of its Indian facilities, which was then blacklisted by the FDA. The agency permitted the company to make a significant shift in its application: to switch the plant at which it would make the generic Lipitor. Ranbaxy now proposed making the drug in the U.S. at a facility that was not under FDA investigation.
Last November, Ranbaxy was back in the headlines with some very unwelcome news -- the company had detected tiny glass particles in its Lipitor. It had to recall millions of pills and temporarily halt production. Says the FDA spokesperson, "The fact that there were some quality problems that led to a limited recall of the generic product was not a result of the approval process or how it was handled."
Remarkably, Ranbaxy is in a stronger position now in the U.S. than it was before its entanglement with the FDA. ... As one incredulous employee put it, "We don't know why we're still in business."
The congressional inquiry into the FDA petered out over the years. But under the direction of David Nelson, investigators interviewed the FDA inspectors who went to Paonta Sahib and asked them a simple question: Would they feel comfortable taking Ranbaxy drugs? "Every single inspector that went to India said they would never take a Ranbaxy drug," says Nelson, "like eight out of eight."
They were not alone. One by one, each of the former Ranbaxy executives Fortune interviewed had determined, while still at the company, to stop taking Ranbaxy drugs.
In April 2010, Ranbaxy issued another in a mounting series of recalls, this time for a pediatric antibiotic of amoxicillin and clavulanate potassium.
Amoxicillin, introduced in 1972, is a standard antibiotic for babies' ear infections.
In a statement, a Ranbaxy spokesman said that while the company's own testing found the drug to be within specification, "the company has decided to recall all the lots in question as a matter of caution, given its commitment to the health and safety of patients." The oral suspension turned brown, instead of white, on being mixed. It was the same drug that Thakur had given his feverish young son, with no effect, seven years earlier.
Reporter associates: Doris Burke and Frederik Joelving
To borrow from a Comment: a crap chute.
Go through your medicine cabinet and look for any pills with "RANBAXY" as the "Labeler." Take them back to your pharmacist and get real medicine.
Last year, while driving my wife and father on Mulholland on top of the Hollywood Hills, I was suddenly overcome with vertigo. Before I could plummet off Mulholland Drive, like the bad guy at the end of a 1971 episode of Mannix, I switched places with my wife and she drove me to the UCLA emergency room. After five hours of insanely expensive brain scans, a very nice doctor said they couldn't see anything wrong with me.
I was still feeling wobbly a few days later when I remembered that a week before, I had picked up my regular prescription at Rite-Aid for a generic drug. Instead of being small, white, and oblong, the pills were suddenly large, red, and round. I had assumed that the drug process couldn't go wrong, so I had accepted it.
When I remembered that I was taking a screwy looking drug (why is it now twice the volume of what I'd been taking since 1998?), I immediately stopped taking it and the vertigo permanently disappeared the next day. I went back to Rite-Aid and said this didn't look like my regular drug. They said, yes, it is. I said, give me some of the small, white, oblong ones. A month ago they tried to give me some of the vertigo-inducing generics again. I complained and got the good ones.
We have no idea how much illness is caused by bad drugs. Nor is it a good thing to have to worry about. Paranoia about poisoning can be debilitating. In my experience, people of German backgrounds tend to be particularly prone to worry about poisoning.
Also, take a look through your stock portfolio.
This story raises troubling questions about globalization and the current cult of cheapness.
This also ought to be a wake-up call for India that it's high-end culture has severe problems, but I doubt if the message will get through. Nor will I expect this story to do any damage to India's image in America. The president and Tom Friedman keep telling us that the geniuses in China and India are going to eat our lunch, so what's a vivid case story when it conflicts with The Narrative?
Another point is the growth of information overload. Having read this article, I would assume that "Ranbaxy" is now the world's worst brand name. And yet, I don't see much evidence for this. This article came out a week ago and two or three people mentioned it in the comments, but it's barely made a splash. For all I know, any publicity is good publicity for the name "Ranbaxy."
I served on a jury in an even stupider fraud case in 2006 involving used car dealers cheating on sales taxes, and nobody else on the jury understood from the two weeks of testimony what had happened. I have the feeling that if you empaneled that same jury and read them this magazine article from start to finish in court, six of them wouldn't remember the name of defendant ("Ran-bax-y") when they got into the jury room, and nine of them wouldn't be persuaded of Ranbaxy's guilt even when you point out that the article said Ranbaxy just pled guilty and paid a $500 million fine.
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87 comments:
Steve, thanks for posting this. The FDA comes off worse than the IRS. I'll be sure to check now where my family's generic drugs are made. Anything from Ranbaxy goes back.
http://www.youtube.com/watch?v=uhjzjApqwjA
I dunno. Their advertising seems pretty good to me.
After that horrible murder in London, I feel much safer now that the UK government has arrested no less than eleven extremely dangerous people.
They are remanded in custody and denied bail.
Yes, they were . . . commenting!
I don't understand India at all. I really don't.
I knew some really intelligent Indians in grad school.
I have read that some elements of the high castes in India have intelligence equal to Jews.
But on the whole... they sure do a good job of not seeming too smart.
Or rather of not doing a good job at a lot of things.
I just don't get this culture. I read things, meet people, talk to them. But I don't understand why they want to be the way they are.
I want no part of it. Plus I don't really like Indian food. That is way down my list of cuisines.
And as regards what you wrote "In China, some executives would have been shot a long time ago. But India is all post-modern and not into that kind of out of date harshness."
I'd hate to think of how bad China would be if they weren't shooting people.
The writer of this article, Katherine Eban, wrote a terrific book back in 2005 called "Dangerous Doses: How Counterfeiters Are Contaminating America's Drug Supply".
It told the story of an investigation team in South Florida going after criminal gangs who were selling stolen, expired, adulterated, and counterfeit prescription drugs to wholesalers who resold them to hospitals and even major U.S. retail chains.
It's actually a terrific read, too. Like a cop show, but real.
And, given that much of it takes place in the greater Miami area, if you read between the lines there's plenty of material that's relevant to many of the issues discussed on your blog.
If the NY Post decided to report this story (let's say Murdoch went through Steve's vertigo experience), their headline would be "Sikhening!!"
Thank you for this- I had never before considered where my generic prescription is manufactured. After some quick research, I discovered that the medication I take for arthritis is indeed manufactured by these Ranbaxy clowns.
No need for a wakeup call for indians. We already knew all our corporates were rotten to the core. And most of our politicians. And our cops. And our regulators.
What do you think we are, Germany?
On the other hand things in India are probably not very different from the US during the robber baron era.
@Sunbeam
Ranbaxy isn't the only Indian pharmaceuticals company.
Regardless, a lot of good Indians completely leave India behind and work in foreign companies.
Why isn't Pfizer publicizing this? Anyhow not to worry-Dr Reddy's Laboratories (RDY-NYSE) a $6 Billion company will fill in I'm sure.
It's not just drugs. It's everything from computer accessories, to food, major appliances, and automobiles. I recently had to get rid of my GE dishwasher after a mere 4 years -- the wash motor burned out because of poor assembly. The appliance was constructed in Korea from Chinese parts. Even when it worked it worked poorly. I replaced it with a Whirlpool made in the US which works brilliantly. It's my estimate that 50% of the merchandise being shoveled off container ships in Port Oakland is defective and low quality. I once bought a bag of defective balloons at Target for my daughter's birthday party. Balloons. The Chinese manufacturer was experimenting with minimizing the amount of rubber used in the manufacturing process -- the result was a bag full of uninflatable rubber shreads. It boggles the mind. How low can humanity go, cheating a parent trying to please a child. The global supply chain is a crap chute (a little applause. Thank you ladies and germs). I could go on and on about the defective IPhone, the countless pairs of stereo headsets that developed a short or a break after three weeks, the Vizio TV I had to return, the Japanese car with the faulty ignition system, ... Forget Consumer Reports. Nothing will prevent you from being gypped in the global market place. Remember the Frank Zappa song Flakes about the shoddiness of American labor and consumer culture back in the 70's. Well, the current status quo is so much worse with slave master corporations driving a low iq poorly trained third world transnational labor force.
That's my rant.
And the irony is that cholesterol isn't even harmful.
Cholesterol, Lipitor, and Big Government.lewrockwell.com
The drugs don't work they just make you worse...
Did you guys really think medicine was exempt from the likes of our modern moral decay?
Why use any of this stuff? Taking a magic pill so you can polish off a can of pringles after sitting at a desk all day is probably not the answer to your woes.
>"A report by the Government Accountability Office found that in 2009, regulators inspected only 11% of foreign drug manufacturing plants"<
Good thing - ain't it? - that we're cutting back on commie liberal government inspections like these. The sequester especially can help with cutbacks in regulation. Nor should the gummit inspect or regulate Wall Street. It should keep on giving the street money it says it "just doesn't have." [/sarcasm]
The point about the gestalt shift is interesting. In logic, the burden of proof is on the person who makes a positive claim. The rub is to identify which claim is correctly considered the positive one. It seems to me the positive claim is a company's claim ("this product is good"), not a regulator's claim ("prove it"). After all, it's the company that's proposing to manufacture a product and have people use it (e.g., swallow it to live). The company is the one bothering everyone with a new thing, so the company should have to justify it.
But in libertarian/free market/neoliberal/et al. theory, the gestalt is the reverse. "Preemptive punishment" is the libertarians' description of regulation, which they call an abomination or at least an inefficiency. In this gestalt, you're supposed to assume that the positive claim is true, and that the onus should be on the regulator.
The analogue used to justify this is the presumption of innocence. But this analogy is applied incorrectly here. A person is "innocent until proven guilty" only because he presents no positive evidence of criminal activity. But someone who has come to the attention of the regulators has done so for taking positive action.
To elaborate: a man who is only walking down the street or otherwise minding his own business is correctly presumed to be innocent of crime, because only positive evidence would link him to crime, and there is no positive evidence. He is merely following the regular course of his life. He isn't wielding a bloody ax, for example. Nor, switching to a non-criminal context, is he making any (perceptible and novel) positive claim to others and expecting their consent with it (e.g., "buy my tacos, they're goooooooood!"). He isn't doing a damn thing.
A company making a product for us to use, however, is making a positive move. Or in other words, its request for our participation in something new or unusual rests on a positive claim (or entire chains of positive claims). A company should therefore provide us or our representatives with justification of its actions. It should have to pass inspection in everything it proposes to do. A presumption of innocence - or of guilt - doesn't apply here. What applies is only the burden of proof principle.
The other rightie argument against regulation is that regulators are naturally corrupt. This argument assumes that the checking of positive claims is intrinsically malign or otherwise bad, while the makers of positive claims should be given the benefit of every doubt. This is not only exactly backward logically, it's also a primitive recipe for the triumph of crooks over the gullible.
Jobs Americans won't do.
As the spouse of someone who had a cerebral hemorrhage several months back, I can assure you that insurance companies are not fans of name brand drugs, and they will not cover the cost. It's generic, or you pay (incredible sums) out of pocket for Big Pharma's patented meds.
I have no idea if an allergic reaction he suffered several months ago was due to a substandard generic drug or to the poor medical care at a rehabilitation facility.
"In my experience, people of German backgrounds tend to be particularly prone to worry about poisoning."
Interesting observation (and probable hatefact). Kurt Godel, an ethnic German, apparently died by starving himself to death, driven by anxiety that he was being poisoned.
http://en.wikipedia.org/wiki/Kurt_G%C3%B6del#Later_years_and_death
I've been taking ibuprofen for years for a back injury. I take 800mg per dose. For year I bought the big bottles of generic ibuprofen at Target or Walmart. It helped but I was still in pain.
Last summer I was at my sisters house and took the same dose of her OTC Motrin. I felt great! Worked like a charm. I told my doc about it later. He said if he had known I was buying generics he would have told me to take 1000mg. He said generics are almost always at least 25% less effective. He also said there are some brands that are no better than placebos. I only buy name brand OTCs now.
It had been nine months since Thakur had first contacted the agency. He had watched as Ranbaxy got six new approvals. The FDA agent who had taken charge of his case tried to ease his frustration. "Imagine, if you will, that we were able to prove even half of what you have told us," she wrote to Thakur. "This would bring down the entire corporation. One of the largest in the world."
This country is going to hell because "though the heaven's may fall, let justice be done" has been replaced with Too Big To Fail.
@ anon 7:31 PM
Thanks for the info. That explains a lot about my disastrous experience with purchasing home appliances for the past 5 years. I wish I knew that about GE before wasting my money on their stuff. I always though GE was as American as apple pie.
I bought a GE stove from Sears 4 years ago and have had nothing but problems with it. Within the first two years, Sears had to send a technician to my house 3 times for repairs. But now the warranty is over I am out of luck. Only 2 of the 4 burners are working right now :(
I also bought a Kenmore fridge from Sears at the same time, and have also had problems with it. Sears had to send a technician to my house within the first 6 months of buying it because the freezer was producing frost. Right now, the fridge section is producing water in the vegetable container section. But my warranty is over so I am out of luck.
On the other hand, I bought a Whirlpool washing machine + dryer from Costco 5 years ago and have had no problems at all. From now on, I will only buy Whirlpool.
"... Too Big To Fail"
Why the West is failing... Nothing can be allowed to fail... Nothing can be wrong... even if we have to pretend.
"I'd hate to think of how bad China would be if they weren't shooting people."
Hong Kong, Taiwan, Singapore and Macau are all majority Chinese countries where they don't shoot business executives. 3 out of the 4 are wealthier than the US and the other will be soon since its economic growth rate is much higher.
Without a doubt the 21st century will belong to the Chinese. America should be doing everything it can to get on their good side now.
My dad died of septic shock due to a foot infection he developed in hospital. He was treated with a couple of different antibiotics. Now I'll never know if my dad was a hopeless case or if a dirty Sikh pig CEO peddled adulterated drugs to the medical center treating him.
I wish Malvinder Singh death by anal cancer.
a big criminal enterprise that sometimes managed to deliver pills that more or less worked
Probably the placebo effect.
Ranbaxy's response from 3 days ago:
http://www.thehindu.com/business/Industry/ranbaxy-pumps-in-300-m-globally-for-products-safety/article4739756.ece
I don't understand India at all. I really don't."
And you probably never will
I knew some really intelligent Indians in grad school."
Thanks for that,where would we be without your condescension?
I have read that some elements of the high castes in India have intelligence equal to Jews."
That statement there tells me all I need to gauge your level of India's knowledge.
But on the whole... they sure do a good job of not seeming too smart."
Given your self confessed ignorance of all things Indian, why should anyone give a damn?
Or rather of not doing a good job at a lot of things."
Very few are good at a "lot of things".
This Ranbaxy thing ,the outsourcing fiascoes et al convey a very simple fact- India is not ready for prime time.
They need to be less ambitious and more selective about which of companies gain foreign exposure.
Corruption remains rather serious affair and with globalization this dirty laundry is being aired in public. If India doesnt get their shit together, they deserve this and far worse PR.
I just don't get this culture. I read things, meet people, talk to them. But I don't understand why they want to be the way they are."
That's because you are an idiot.
I want no part of it. Plus I don't really like Indian food. That is way down my list of cuisines."
LOL, QED I suppose!
And as regards what you wrote "In China, some executives would have been shot a long time ago. But India is all post-modern and not into that kind of out of date harshness."
I'd hate to think of how bad China would be if they weren't shooting people."
what 60 million wasnt enough for you?
I dont know why Steve follows this silly meme that India is post modern. If some idiot SWPL feel more affinity to India than China due to their foolish misconceptions about India, why should Indian be blamed.
Chinese corruption is just as pervasive as India's . You really think a multi billion dollar pharmaeutical company in China who undoubtedly grease the right palms will be shut down and the owner executed just because a few dead kids?
The parents of the dead Chinese children will follow the government directives whereas the Indian parents will organize lynch mobs.
Who is post modern now?
Great article.
Regarding your remark about the jury: what was its racial/sexual makeup and proportion of native English speaking jurors?
I recall a story about a British jury made up mostly of immigrants that had to be sent home because they kept asking the judge questions that revealed that they had no idea what was going on, even after repeated explanations.
Indian diplomas are also largely counterfeit. At my USA university, we accept many "high-scoring" Indian students, only to find that they are complete idiots -- often extremely spoiled little emperors and empresses, with no practical knowledge, but a healthy expectation of entitlement.
This also ought to be a wake-up call for India that it's high-end culture has severe problems, but I doubt if the message will get through. Nor will I expect this story to do any damage to India's image in America. The president and Tom Friedman keep telling us that the geniuses in China and India are going to eat our lunch, so what's a vivid case story when it conflicts with The Narrative?
A particular problem with the narrative is that many people in the US try to set up India as the friendly, democratic, English-speaking outsourcing alternative to China. But the people I've talked to who have had experience working with India and working with China have told me that China is far preferable to India -- that India is more corrupt, that Indians are more racist, and that sometimes your employees just don't bother to show up.
And even in Gurgaon, at least as of a few years ago when I last visited, they have blackouts literally every day. Their infrastructure is terrible. And Gurgaon is full of glitzy buildings with the Indian subsidiaries of big multinational companies. In walled compounds. With armed guards, who search under your car with mirrors (for bombs, I guess). That's the nice part of India.
India has a long way to go before I'd trust anything made in India.
"Without a doubt the 21st century will belong to the Chinese."
As DVN notes, corruption in China is no less than in India. It also doesn't speak well of the place that a large portion of its wealthy citizens express a strong desire to leave when surveyed. It also has natural resources limitations, although I suppose that's one reason why they are in Africa. The U.S. is certainly in a period of relative decline, but China hasn't made it yet. Strong nationalistic leadership of the sort this country used to have could prop us up for a while, but we probably won't be lucky enough to get it.
81 Americans died and hundreds were seriously hurt due to counterfeit Heparin from China, uncovered in 2008. Let me know which Chinese executive was shot for this.
Steve, the FT has been covering this story as well.
The FT has also been on top of Indian corruption and mismanagement, only about 10% of the inhabitants of the largest state have indoor toilets. They just use a tiled room in the house with a fabric cover and have the untouchables scoop out the poop through a doggie door. No, really.
India, to a lesser extent Brazil, is a mismanaged corrupt madhouse with no real hope of being anything but an impoverished hellhole. That comes through loud and clear in the FT articles.
A particular problem with the narrative is that many people in the US try to set up India as the friendly, democratic, English-speaking outsourcing alternative to China. But the people I've talked to who have had experience working with India and working with China have told me that China is far preferable to India -- that India is more corrupt, that Indians are more racist, and that sometimes your employees just don't bother to show up."
India for sure has been oversold and is overrated.
But Im not sure of it being more corrupt than China. You find more evidences of corruption in India due to its openness. Corruption in China may not be as brazen but its more ambitious and pernicious especially because its not talked about.
How exactly is India racist and to whom? I am talking about foreigners? Not intra Indian bigotry.
These employees are most likely lower castes who were hired due to our version affirmative action. It has devastated pretty much all institutions in India. I dont know what solution there is for this.
And even in Gurgaon, at least as of a few years ago when I last visited, they have blackouts literally every day. Their infrastructure is terrible. And Gurgaon is full of glitzy buildings with the Indian subsidiaries of big multinational companies. In walled compounds. With armed guards, who search under your car with mirrors (for bombs, I guess). That's the nice part of India."
I remember growing in India and going to movie theaters without the benefit of passing through metal detectors..sigh
Gurgaon is near Delhi and the infrastructure there is still bloody awful
Bangalore and Hyderabad I believe provide seperate grids for these compounds so they dont suffer from blackouts.
India has a long way to go before I'd trust anything made in India."
You cant go wrong with the more quaint stuff such as sculptures,food and handicrafts LOL
But yeah, light and heavy industry still churn substandard products only somewhat better than they were during "License Raj"
Pharmaceuticals is the hi-tech industry par excellence, in that it employs legions of stereotypical white coated scientists doing highly technical things for big results - and big cash.
As such, it is the ideal industry for the post-industrial societies of the west, who have been shorn (by the globalists) of their industrial base, to move into. In fact one of Britain's very, very few industrial 'stars', Glaxo, typifies this sort of model. The mega-taxes that Glaxo pays on its mega-sales (all wealth produced by handfulls of white-coats), keeps the Great British (more likely Nigerian or Somalian these days) dole-ite in his pocket money and council flat.
Well, my point is that it is rather odd that a third world nation should encroach on he territory that belongs to the post industrial loser states, whilst apparently by-passing the inter-mediate stage, from oxen to the deep structure of peptide chains, all in one jump.
If the big, fat degenerate loser western nations give up on pharmaceuticals, what the hell have they got left to feed their monster welfare states and to keep throwing bromide-laced sardines to the dole-ites?
As we saw in Woolwich the other day certain types of the 'new' dole-ite seem to need more than 50 quid and a dose of bromide to keep them under.
This is an awesome post, Steve. I always buy generic, I had no idea that this sort of stuff was happening.
"Hong Kong, Taiwan, Singapore and Macau are all majority Chinese countries where they don't shoot business executives. 3 out of the 4 are wealthier than the US and the other will be soon since its economic growth rate is much higher."
<<< An absurd comment. I live in Hong Kong, and the majority of the people live in high-rise slums. Car ownership is 20% of households, and in the buses you get blasted with commercials from flat-screen tv's, etc. The government is controlled by tycoons and by China, and is no friend of the middle class. I could go on for a few hours about comparing countries vs. city states, about PPP and quality of life, mean vs median income, but I gotta go.
"But if we fail, then the whole world, including the United States, including all that we have known and cared for, will sink into the abyss of a new dark age made more sinister, and perhaps more protracted, by the lights of perverted science." - Winston Churchill
China? I'm ethnic chinese, but I'm not blind to the sheer amount of ingenius corruption we are capable of.
We all know about the melanine in milk powder affair.
Then we have discarded sewer oil being reprocessed and sold as cooking oil.
Next we have fake chicken eggs.
Taiwan isn't much better. They used plasticiser as clouding agents.
I'm sure Hong Kong and even my own country of Singapore has their share of corruption we'd like to sweep under the rug. Our only saving grace are the institutions the British bequeathed to us which helps to check these excesses. And we are small city states, which helps too.
India is just too big to be governed or regulated effectively.
The FT has also been on top of Indian corruption and mismanagement, only about 10% of the inhabitants of the largest state have indoor toilets. They just use a tiled room in the house with a fabric cover and have the untouchables scoop out the poop through a doggie door. No, really."
Rather like "honey scoopers" in colonial American and "night soil" removers in UK what?
I would like to remind people that most Indian towns and villages had a simple but workable drainage system(Indus Valley civilzation anyone) but the British uprooted it in order to create something better made an utter mess of it, thereby vastly increasing this class of "untouchables"
And another thing, if you have to shed crocodile tears for the "untouchables" for gods sake ,dont use that term as they find it offensive. They prefer the word Dalit, if you want to pretend to care about India's downtrodden ,at least do your homework and pretend properly.
Thank you
I was going to say that there is a silver lining: presumably non-statins don't cause statin side effects. But your personal anecdote made me realise that non-statins could cause any old side effect, depending on what is actually in the pills.
After that horrible murder in London, I feel much safer now that the UK government has arrested no less than eleven extremely dangerous people.
They are remanded in custody and denied bail.
Yes, they were . . . commenting!"
Insanity! The city authorities seemed more upset at the EDL rally than this barbarism
How much longer can this self defeating lunacy last?
I read that China is just as corrupt as India. But its easier to do business in China, since, thanks to the communist party, there is only one bunch of people to bribe.
Troubling story. In some ways it has me scratching my head. Why are the Americans retailers not testing the Indian generic drugs before selling? By law I believe they should.
Around a decade ago i worked in the health food industry, with some overlap into the pharmaceutical business. I was in purchasing, and as a result would work closely with the quality assurance people. My impression was by law it was required that testing needed to be done on products purchased by US firms.
For example, in this case if I were to purchase 10 million generic Lipitor pills from Ranbaxy - once the product arrived the QA department would have the people in Operations pull product samples. From the SOPs there was a basic formula on how many samples to randomly pull based upon quantities per batch/ lot #. The samples would then be brought to QA for testing.
Once this work was done, the generic Lipitor would be placed off to the side, waiting for test results to come back.
These tests are not terribly difficult to do or typically expensive. It wouldn't take more than a few hours most of the time for everything to be figured out. Once testing was done, and if an OK given by QA, then the Operation people would begin to break down the product packages, sending off product to customers, of into storage.
If the product came back as faulty, then it was rejected.
Overall, we kept records of all our testing for FDA inspections.
From my experience back in the day, everyone knew that Chinese and Indian firms couldn't be trusted. They had a reputation for cheating and lying. As one Chinese told me, in his country it wasn't a lie unless one was caught. With their type of government, from what the average Chinese saw and heard, it wasn't hard to see why this was the case.
Overall though, you don't really trust anyone, regardless of were the product came from. In the end it was your company and reputation at stake. The Americans that picked up faulty Indian drugs probably think poorly on Ranbaxy after this article. They likely think even poorer on the hospital and pharmacy that sold them the crappy products that endangered their lives.
Perhaps Taki had a nice lunch with a big pharma exec?
These generic drugs do help reducing medical costs. Sure sometimes it is bad, but overall their existence help people.
Big pharma wants to charge an arm and leg every time and not everyone can afford to please them.
Whatever evil these indians did, their cut was smaller th an that of big pharma. Their net benefit is bigger than the harm they caused.
DR: Sir, you miss the point. It is not about wealth-producing, it is about holding wealth-producers accountable.
Steve, this is a massively depressing post. For me, the essence of conservatism was that "actions have consequences," but we seem to live in a consequence free world, if one has enough money.
Thanks for this one.
Dr Van Nostrand wrote: Lots
I don't think you understand. I don't care at all. I would prefer to have zero immigration from India. No outsourcing to India. No imports from India.
Send all the visa holders from India home. Heck pull our embassies out of India. If India wants to leave an embassy here that's find I suppose. It's not like they are going to have a lot to do.
If some tourists want to go to India, and India wants them, well good. If they get killed somehow or jailed or something, well it's their problem.
In short, have nothing to do with India. I can't think of a single positive thing dealing with that country has ever led to.
I don't want to have condescension for Indians, I just want absolutely nothing to do with them in any way.
That simple enough for you? I don't want to exploit you or anything like that.
I just want nothing to do with you.
What's the downside? If somehow India becomes some economic dynamo nation, well good for you.
But I won't sit up nights wondering about lost opportunities.
You spooked me, I checked the one drug I take daily. Maker: Qualitest. American. Hope that makes a difference. Sad I have to worry.
Re: anon's "crap chute" comment.
Yeah, it's surprising how anxious we are to import shoddy merchandise from everywhere. And on the other end, we are also anxious to import the overly complicated, fragile, and overpriced stuff from Europe. We have some trait that tells us things are better somewhere else. Might be linked to anti-incest traits.
Pfizer,$115 profit over ten years. Explains how one of their lawyers just built a 20,000 sq. ft. house down the road from me. This place is incredible. Great work, Steve.
Two thoughts come to mind (well, three if I count the box of Chinese light bulbs I bought a few years ago, every one of which broke apart when I tried to remove it from the light fixture): my daughter is on medication for epilipsy, and a couple of years ago when our insurance company required her to switch from name brand to the generic version of one of her medications (much cheaper), she immediately resumed having seizures...we had to go through an appeal process.Based, in part, on her doctor's opinion that the generic was not effective, we got her restored to the brand name med. Result? The seizures stopped.
The final thought: did Ranbaxy have a political sponsor in the U.S. government, such as a friendly congressman? If this Ranbaxy matter gets publicised, as it should, watch politicians who were friendly to their U.S. operations scurry for cover.Unfortunately, the U.S. media is now so debased that they seem incapable of true reporting, but we can always hope.
Without a doubt the 21st century will belong to the Chinese. America should be doing everything it can to get on their good side now.
You could be right, but I'm curious: how hard would it be to find quotes from the 1980s making the exact same claim about the Japanese? Remember when they were buying up American land and businesses, and we were all going to work for them any day now?
Yeah, David, it's the lack of inspections. Couldn't be that we've outsourced our material concerns and health to low-trust cultures.
And most damning of all, were getting there ourselves.
In India the Naxalite Maoist insurgency grinds on:
"Suspected rebels kill 24; India officials outraged", Ashok Sharma, AP, May 26 2013.
"... 200 suspected Maoist rebels... killed 24 people by setting off a bomb and firing on a convoy carrying ruling party leaders and members in an insurgency-wracked state. ... 37 people ... were injured...
...one of those dead ... founded a local militia, the Salwa Judum, to combat the Maoist rebels. The anti-rebel militia had to be reined in after it was accused of atrocities against tribals - indigenous people at the bottom of India's rigid social ladder.
...dead also included state Congress party chief ... and his son.
...Prime Minister Singh has called the rebels India's biggest internal security threat. They are now present in 20 of India's 28 states and have thousands of fighters, according to the Home Ministry. .... been fighting the central government for more than four decades..."
The smell of peace in the morning. Sounds kind of like a wanna-be Mexican Revolution in the making. Perhaps not really war, just violant chaos. Make big bucks and head to Switzerland, now there's a plan.
Stories of Indian "corruption" should not shock people here. As an Indian, I feel bemused when I see other Indians complain vociferously about corruption among themselves but get very offended if white foreigners complain about this.
HOWEVER, trying to pretend that India is uniquely corrupt shows a certain naivete about the world. Actually, lack of corruption is the exception in the world. Which countries are really clean (relatively speaking)? North Europe, US, Canada and Japan. Any others? What about Latin America? How bad is Africa? What about the Central Asian Republics? How bad is Russia? And there is also a LOT of naivete about China. The Chinese political leadership has been known to frame and/or execute leaders deemed a threat to them. I have yet to come across stories of mayors of Indian cities found floating in lakes or rivers as happens in China from time to time. Read about Bo Xilai. China is actually not just corrupt, its Ponzi scheme real estate market bubble is fast becoming the biggest systemic risk to the global economy.
And in Europe, there are tales of corruption from places like Greece that would shock most Americans (read Michael Lewis's articles in Vanity Fair about Greece). I don't even want to get started about Italy or Spain or Portugal. Even Ireland has some.
Last time I checked Greeks did not have particularly low IQs on an average. Distilling the world's politics down to a simple denominator like IQ shows an ignorance about the world. Consider another example: Armenians are a very very successful ethnic group in America and elsewhere. Yet why is Armenia the country such a hell-hole even now? IQ explains a few things but a lot more needs to be learnt about the religion, history and politics of countries.
Corruption in India is actually worse than this article presents. Check this out:
http://en.wikipedia.org/wiki/Saradha_Group_financial_scandal
I did as you advised and looked for the makers of all the drugs I take everyday. I did not find Ranbaxy but I did find another Indian company Aurobindo pharma. Do you know anything bad about them that isn't yet in Wikipedia?
However most of my pill bottles from Kaiser do not show the pill maker at all.
I took Lipitor for a while but I had side effects that made me stop. Then I tried every other statin until finally finding one that agreed with me. BTW I don't have high cholesterol and never have. I also have no signs of atherosclerosis. Kaiser seems to prescribe statins for just about everyone.
I resisted stains because although they do lower cholesterol it is well known now that cholesterol levels alone are almost meaningless. Historically cholesterol became famous because it was easy to test for while more meaningful blood lipids to test for like Low Density Lipoproteins were only developed later.
It is true that statins lower some blood lipids and it seems to be true that statins increase life span but it is not necessarily true that that is because of their effect on blood lipids. Like many other connections in medicine the actual action of statins is empirical not one proceeding from theory. Or I should say one proceeding from a true theory.
Statins block a biosynthetic pathway rather early in its process. That means that while it interferes with the synthesis of various lipids it also interferes with other processes. And no one knows just which ones.
But after being doubled teamed by my doctor and the pharmacist who called me at home to harangue me, I persisted until I found a statin that did not make me sick. I take Pravastatin every day now, but not because I'm convinced it improves my health but only to stop from being hounded by Kaiser.
Albertosaurus
Albertosaurus
Re: Dr. Van Nostrad:
"But Im not sure of it being more corrupt than China. You find more evidences of corruption in India due to its openness. Corruption in China may not be as brazen but its more ambitious and pernicious especially because its not talked about."
Yeah, China is pretty famously corrupt. These are ordinary business managers/execs I hear this from, though, so maybe it's just that the Indians they dealt with were more obvious in holding out their hands for bribes or whatever than the Chinese.
"How exactly is India racist and to whom? I am talking about foreigners? Not intra Indian bigotry."
I've never followed-up on that, but it's something I've heard pretty consistently, and not just from Americans who have been trained to see racism under every rock.
My personal dealings with India have been a lot more limited, but I haven't noticed much. I've never been posted on an extended assignment to India, though.
Remember that Indians have an iq less than even some African nations. It is true that many of the smartest people in the world are Indians, but this is mainly because of the caste system.
What happens when an entire nation with an iq of 81 self segregates the smartest people? After a couple thousand years you get some people with incredibly high iq's. The rest of India is still filled with third world people who have an iq barely above that of an African.
Indian diplomas are also largely counterfeit. At my USA university, we accept many "high-scoring" Indian students, only to find that they are complete idiots -- often extremely spoiled little emperors and empresses, with no practical knowledge, but a healthy expectation of entitlement.
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Ditto Saudi Arabian students. They are mostly dumb as posts.
Can anyone tell me if the Simvastatin provided by Medco is a Ranbaxy product? The relative at issue can't be convinced to stay off statins, so brand is the relevant issue.
Pfizer is the biggest thug in pharma and experienced in blackmailing those who get in the way.
Back in 1996, Pfizer ran a trial in Kano, Nigeria on children sick with meningitis amidst an outbreak that killed thousands in the country. The control group was given a lower than standard dose to make the Pfizer drug look effective.
When American plaintiffs lawyers and the Nigerian government came knocking, one of the things that deep state operatives from Pfizer did was to dig up dirt on the Attorney General of Nigeria to drop his line of inquiry.
Talk about a conspiracy.
Kano litigation
Are you ready to reconsider your position that enforcement of the foreign corrupt practices act is a bad idea?
The law is designed so that powerful corporations can't form dangerous conspiracies with government leaders.
The impetus for the law was the Lockheed scandals of the 60s when Lockheed used bribery to sell fighters to many close allies. From that point on, sensible people realized just how dangerous a corporation could become if it could conspire with the leadership of even close allies on subjects of military/foreign policy.
If anything the foreign corrupt practices act needs to be expanded.
> What was Pfizer's gross margin on Lipitor?
On consumable products with high, price-insensitive demand that don't face competition (like name-brand drugs without generic equivalents), the gross margin will generally be 80% or higher.
White people have scammed more billions out more people on this planet than the rest of the world combined thanks to the federal reserve.
Say what you want about Indians, but it is white people who have stolen and defrauded people out of entire continents. What countries has India conquered and plundered?
There are western embassies in India (and China). The people who work there are smart. They know about rampant adulteration and incompetence in these places and report back to Washington.
My take was that the Indians were too poor to really screw things up; whereas the Chinese are rich enough to do serious damage to themselves and the rest of the world. It appears since I lived in India they are catching up with the Chinese.
Its not because of a lack of inspectors, poverty, education, or IQ. Its endemic, cultural-wide corruption. The worst are at the top, the smart ones. We take our relative honesty for granted. But, in the rest of the world (ROW) you can't do that or you're dead.
steve setting a record for longest post yet. a true TL/DNR scenario.
Kaiser Permanente, the flag ship HMO for ObamaCare, dispenses mostly Indian pharma generics, made by companies like Global and Lupin. Be very afraid if you are a Kaiser patient.
http://youtu.be/5ukqfqIPFhw
Everything you need to know about India.
"Red Pill" plus this expose plus your personal anecdote...
Brilliant, Steve.
I couldn't find it, but I remember reading about an Indian run drug manufacturing plant in the US in which they sent tainted goods to the market which ended up killing people in America. The Indian owners absconded or tried to abscond.
The drug was some kind of cancer drug and came in syringes or some sort of ready to use dispenser. They had cut corners with regards to sterilty standards?
I think it happened in 2007 or 2008.
"On the other hand things in India are probably not very different from the US during the robber baron era. " - It took the closest we've come to a second civil war to end the robber baron era, so uh, good luck with that.
"Without a doubt the 21st century will belong to the Chinese. America should be doing everything it can to get on their good side now." - After a century of just and honorable behavior from a position of strength I doubt there is much possibility, either of us being able to do more, or us being able to get on their good side.
"Big pharma wants to charge an arm and leg every time and not everyone can afford to please them." - Big pharma pays for the R&D that creates new drugs. when the generics maker come up with something that saves lives, rather than copying and pasting( and diluting ) a product, let us know.
Something else that maybe keeps Indians on edge but that we don't hear about much is that the Pakistan-Indian border in places is a "hot" border, even though India and Pakistan are "at peace". Here's the Chinese take on an Indian Brigadier General and two troopers getting wounded today:
"Several wounded in fire exchange between India, Pakistan in Kashmir", English.news.cn, 2013-05-25.
"An Indian army Brigader and two troopers were wounded in exchange of fire between Pakistani troopers on line of control (LoC) ...
Earlier this year skirmishes between Indian and Pakistani troopers... Five troopers of both the countries (two from India and three from Pakistan) were killed in these skirmishes ..."
I don't recall hearing about this. Did you? The MSM probably had some dancing girls to cover or something else important.
And in Europe, there are tales of corruption from places like Greece that would shock most Americans (read Michael Lewis's articles in Vanity Fair about Greece). I don't even want to get started about Italy or Spain or Portugal. Even Ireland has some.
Last time I checked Greeks did not have particularly low IQs on an average. Distilling the world's politics down to a simple denominator like IQ shows an ignorance about the world. Consider another example: Armenians are a very very successful ethnic group in America and elsewhere. Yet why is Armenia the country such a hell-hole even now? IQ explains a few things but a lot more needs to be learnt about the religion, history and politics of countries."
Interesting trivia on the Greeks. I think it was a Greek historian ,one of the classical ones dont remember which, commented that Greeks couldnt help embezzling funds no matter how strictly they were watched.He contrasted their behavior with the Romans who were known (or rather notorious) for their honesty and frugality.
There is the apocryphal story about a Phoenician(or Carthiginian) delegation paying a diplomatic visit to the to the elite families in Rome.
And they were amused that all families seemed to be using the same silver bowl.
Greek travellers in India noted that the Indians were scrupulously honest in their dealings.
Of course this was all a long long time ago!
...Prime Minister Singh has called the rebels India's biggest internal security threat. They are now present in 20 of India's 28 states and have thousands of fighters, according to the Home Ministry. .... been fighting the central government for more than four decades..."
The smell of peace in the morning. Sounds kind of like a wanna-be Mexican Revolution in the making. Perhaps not really war, just violant chaos. Make big bucks and head to Switzerland, now there's a plan."
Im from Andhra Pradesh ,one of the HQsof Naxal activity. It doesnt really interfere in day to day life unlike the Mexican drug war.
The targets are usually politicians and select landlords.
It has only intensified because the centre left Congress wants to put an end to their movement which is really their sibling in ideology
(the movement was actively encouraged by the Humanities staff of Jawaharlal Nehru Universities)
Say what you want about India,its record against internal trouble makers be they Sikhs,Kashmiris,Northeastern tribals,famous bandits or what have you is a strong one. The Indian government in the end always gets its man or in the case of Phoolan Devi, its woman.
sunbeam in his infinite wisdom noted..
I don't think you understand. I don't care at all. I would prefer to have zero immigration from India. No outsourcing to India. No imports from India."
DVN: I understand just fine. You are a nativist.I dont mean that in a bad way, I just mean that in an idiot way.
There is smart nativism(Sailer on his good days) and there is isnt ,you are the latter.
Send all the visa holders from India home. Heck pull our embassies out of India. If India wants to leave an embassy here that's find I suppose. It's not like they are going to have a lot to do.
DVN: While you pull your embassy from India, be sure to pull out of Pakistan as well and leave them to us. But oh no you couldnt have that.
You cultivated those gangsters for these and they were your SOBs ,well now they are just SOBs!
A fat lot of good that did you. Congratulations on yet another foreign policy victory.
As for visa holders, sure send them back but remember , no one put a gun to the heads of middle class whites and forced them to take a loan so that they could major in transgendered 18th centurty Fijian interpretive dance or some such nonsense.
Dont be upset with me if all the jobs they can get is asking me if I could like a biscotti with my cafe latte.
Middle class white obviously have the IQ for STEM but they lack the will and discipline.
Best of luck running an economy or research departments without "visa holders"
If some tourists want to go to India, and India wants them, well good. If they get killed somehow or jailed or something, well it's their problem.
DVN: Some one has been watching Banged Up Abroad marathons!
Indian police may be corrupt but not that corrupt! The problem is a lot of idiot tourists, both Western and non Western ,give them excuses.
Drunkenness, drug taking, nude sunbathing, sexual promiscuity are overlooked by the populace and authorities until they start flaunting it.And thats when the locals get irritated.
As for killing and rapes,thats tragic I would advise these damn fools not to go to dangerous areas unescorted. Especially women seem to lack basic common sense. Heck didnt someone teach not to get in cars with strangers?
Yes thats their problem, but these problems are not unique to India as you seem to imagine.
..contd
In short, have nothing to do with India. I can't think of a single positive thing dealing with that country has ever led to.
DVN: Thats because for most of our existence you were dealing with Pakistan. We wanted to offer positive things like intelligence related to 9/11 but some nativist knowitalls at the FBI and CIA didnt think much of the work of silly dotheads like myself.
Reap the whirlwind.
I don't want to have condescension for Indians, I just want absolutely nothing to do with them in any way.
DVN: Most Indians like Americans but if what you wish comes to pass, they will get by.
As for you I am sure you will be fine ..in the end...I would like to remind the "third world" is a good chunk(if not often the majority) of the market share for much of your products be they foodstuffs,movies or military hardware.
Indians in their patriotic fervor will do without Pepsi,coke or KFC. Ban hollywood movies from screening.
Ok you would say that is just India, a nation of a paupers -who cares. Well this may well have a ripple effect. India once the leader of the non aligned block and this may "stir a sleeping giant" if you will and many countries may do the same in solidarity.
Yup ,great strategy in reducing your market share to sclerotic Europe and ....yeah
Be careful what you wish for.Need I remind what happened the last time you indulged in a trade war in the middle of a recession?
That simple enough for you? I don't want to exploit you or anything like that."
DVN: You are really a damn idiot. Who said anything about exploitation?
I just want nothing to do with you.
DVN: I want nothing to do with you as a person. You sound like a sullen ,charmless troll.
What's the downside? If somehow India becomes some economic dynamo nation, well good for you.
DVN: Please I dont require good wishes from inauspicious people such as yourself.I would prefer you curse us!
But I won't sit up nights wondering about lost opportunities.
DVN: I think you are confused.Because no one asked you to? Do you even know how to read?
I haven't read the whole Fortune article so I don't know if Ms. Eban covered it, but I wonder if Ranbaxy being treated so gently by the FDA for so long, despite numerous and repeated violations, had anything to do with FDA staff being Indian. It would not surprise me at all if this were the case.
I have seen many times in tech companies on the West Coast whole divisions or groups where you have Indians having mostly other Indians reporting to them, and so on for several layers. I think this is more prevalent with Indians than with Chinese, even though they are present in comparable numbers.
I get suspicious any time when I see ethnic segregation like that, and I say this as an immigrant from Eastern Europe. Your generic whitebread Americans seem too naive or brainwashed to notice or care, but people from places with greater distrust of government certainly do notice, and worry.
I am now going through a patent application process. The examiner and his supervisor are both Indians. In the USPTPO, wtf? From what I can tell, the examiner can't write English that well, or is simply careless (typos, misspellings, bad sentence structure). He cites references that have nothing to do with what he's talking about, and doesn't seem to read carefully what we write. I wonder if he's just incompetent or malicious. But the U.S. is screwed either way.
I've never followed-up on that, but it's something I've heard pretty consistently, and not just from Americans who have been trained to see racism under every rock. "
To be sure ,Indians are prejudiced against blacks despite their fondness for Obama.
A lot of this racism is mostly ignorance combined with an arrogance that barely concealed an inferiority complex as far as Westerners are concerned anyway.
That normally doesnt prevent them from extending hospitality to Western people if they so accept it
"Best of luck running an economy or research departments without "visa holders""
Yup, that tells us all we need to know.
"I am now going through a patent application process. The examiner and his supervisor are both Indians. In the USPTPO, wtf?"
Yes, the US patent office somehow became an AA, or AA-let's-pretend, ghetto. Their caseload is also so heavy that it seems to mostly be a paper-work and forms-processing facility. They don't seem to be doing a lot of reading for content.
The FDA may have bigger problems than ethnic nepotism, though that may well exist. A general problem with government regulation in the modern world is that too often the only people who know enough to do the regulation are completely entangled in the industries they are supposed to regulate. For instance:
"The journal Nature reported in 2005 that 70% of FDA panels writing clinical guidelines on prescription drug usage contained at least one member with financial links to drug companies whose products were covered by those guidelines. In the most egregious instance, every member of a panel which recommended the use of epoeitin alfa in HIV patients had received money from a manufacturer of that drug..."
I lay a lot of the blame for this in the very deliberate destruction of the competitive Civil Service in the US, in the interest of advancing the number of visible minorities in higher civil service positions. Another drawback of the AA-state.
Apologies for a completely botched link, the right link:
http://en.wikipedia.org/wiki/Criticism_of_the_Food_and_Drug_Administration
"Criticism of the Food and Drug Administration"
"... every member of a panel which recommended the use ... had received money from a manufacturer of that drug."
see: Conquest's 3rd Law
I would like to remind people that most Indian towns and villages had a simple but workable drainage system(Indus Valley civilzation anyone) but the British uprooted it in order to create something better made an utter mess of it, thereby vastly increasing this class of "untouchables"
You are such a brazen liar "Van Nostrand"!
Blame your culture and religion for your sorry sanitation and hygiene. The Indus Valley culture predates the Vedic Hindu culture.
You are such a brazen liar "Van Nostrand"!
Blame your culture and religion for your sorry sanitation and hygiene. The Indus Valley culture predates the Vedic Hindu culture."
Well if you implicate that the social structure of myreligion is based on nothing more than mundane concepts occupation then it is only natural that a change socio economic factors and living conditions will create upheavals and changes in the current structure.
I never claimed that occupation was the SOLE determinant of one place in Hindu society but a strong one.
The canard that Indus Valley Civilization was not Vedic Hindu is an old and discredited one.
All the skeletons found were Caucasoid Mediterranean type much like the inhabitants there today.
Shiva, altars and temples are not unVedic either. Of course this would require to have a more thorough knowledge of Hinduism than you can find in those silly Penguin classic books.
The canard that Indus Valley Civilization was not Vedic Hindu is an old and discredited one.
You lie again. No serious objective scholar agrees with that. The language, the horse, the sanitation, the egalitarian housing all prove you a liar.
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