Bottle of Lies: The Inside Story of the Generic Drug Boom

On August 17, 2002, in New Delhi, India, there was a “top-secret” mission conducted by a company executive from Ranbaxy (17). The man’s mission was to deliver documents for an Abbreviated New Drug Application (ANDA)—which is colloquially known in the industry as a “jacket”—to the US Food and Drug Administration. Ranbaxy was applying to make the first generic version of cholesterol-lowering drug Lipitor, the best-selling drug in the world.

The stakes were high: The first company to successfully gain approval for a generic version of Lipitor stood to make a fortune. They would benefit from a six-month exclusivity period, during which they would have exclusive rights to sell the generic version of the drug.

Jeffery Myers, a senior patent attorney for Pfizer, the manufacturer of Lipitor, received the notice that Ranbaxy had filed an ANDA. Myers was surprised and highly skeptical of Ranbaxy’s ability to successfully produce a generic version of Lipitor. Lipitor was a finicky drug that required extremely precise manufacturing processes to ensure its efficacy and safety. He viewed Ranbaxy as a “bottom-feeder” company and looked forward to “obliterating” them through legal battles (20).

Until 1984, there was no legal pathway for generic drugs to enter the US market. This changed when William F. Haddad, an advocate for generics, played a pivotal role in getting the Hatch-Waxman Act passed, which authorized a six-month generic exclusivity incentive, known as the “first-to-file” provision (22).

This incentive galvanized competition. Generic drug companies went to great lengths to try to get their applications filed first. Many executives slept in cars or tents outside the FDA office, waiting for the doors to open on the day they could submit their applications. The FDA eventually put an end to this practice by declaring that any company that submitted its application on a certain day would share the first-to-file exclusivity period if multiple applications were received on that day.

Ranbaxy considered ANDAs crucial to their financial goals. The company aimed to make $1 billion by 2015. Jay Deshmukh, one of Ranbaxy’s attorneys, was the main person at the company who handled first-to-file applications. On October 9, 2002, Ranbaxy learned that the company was the first to file an ANDA for Lipitor, and that their application would be evaluated.

In May 2003, Ranbaxy executives gathered to discuss the launch of their drug Sotret, a generic formulation of the acne medication Accutane. The drug formulation for Sotret had consistently failed quality tests. Even when formulated perfectly, the drug was dangerous: The brand-name version of the drug could cause miscarriages, birth defects, and suicidal tendencies. The executives faced a dilemma: If they admitted to the mistakes and withdrew the drug, another generic drug company would rise up to take their place, but not withdrawing it would endanger people. The CEO, D. S. Brar, summoned process chemist Rajiv Malik to quickly fix the situation, but Malik cautioned that it would take time to find fix the issues with Sotret’s formulation.

In the end, the executives decided to prioritize profits, hide the drug’s issues from regulators, and continue with the launch.

Gurgaon was a rapidly developing city on the outskirts of New Delhi. Gurgaon, formerly a rural area, was used by many Fortune 500 companies as a hub for outsourcing. These large companies entered the area and quickly built it up, but the underlying infrastructure suffered, resulting in issues such as inadequate sewage systems, unreliable electricity, and overcrowded roads. The BBC deemed it a “slum for the rich” (31).

Thakur and his family settled in Gurgaon in August 2003 once he started working for Ranbaxy. Thakur experienced culture shock once he moved. He tried to go to the police to register himself as a foreign citizen, but the police didn’t understand why he was trying to follow the rules. He had to convince them that he needed to register. In another incident, Thakur asked his driver to stop so they could help a man who was lying in the middle of the road, drunk and bleeding. He and the driver carried the man to the hospital and Thakur paid for his treatment. The police were so suspicious that Thakur had helped a stranger that they thought he must have hit the man while driving, and that Thakur helped him because he felt guilty. Thakur asked Ranbaxy’s human resources department to take care of the situation, and they did—Thakur suspected that they paid off the police to make the matter go away.

In November 2003, President Bill Clinton visited India to thank Ranbaxy and other generic drug companies for providing low-cost AIDS medicine to Africa. In 2000, Clinton was the first US president to visit India in decades. Afterward, Clinton made a point of returning to the country repeatedly. During his visit in 2003, Ranbaxy hoped that Clinton’s presence would serve as a marketing boost. It did: The company’s sales and reputation improved.

Eban describes an inspection conducted by FDA employee Jose Hernandez, before segueing into an overview of the historical events that led up to the modern-day standards of the FDA.

Hernandez took a holistic approach to inspections, working from the “outside in”: He surveyed the grounds before moving on to the interior of the facility. There was one incident in which he thought a crab manufacturing plant smelled like a wet dog, but he couldn’t find the source of the smell. He decided to return to the plant at an unusual hour, 9 o’clock at night, to catch the employees off-guard. He discovered that an employee was cooking and eating dog meat while on the job.

Eban explains that the FDA’s approach is considered superior to that of similar organizations globally. She quotes a health specialist who describes it as comparing the “latest model Boeing to an old bicycle” (44). Eban says the FDA is unique in that it takes a complex approach to inspection that involves looking deeply at the process, not just the product. The FDA seeks to hold manufacturers current good manufacturing processes (cGMP).

Eban describes the history of food and drug safety inspection, starting from the Middle Ages. The Persian philosopher Ibn Sina wrote an encyclopedia in 1025 that described how changing certain conditions during the manufacturing process could alter the properties of a drug. In the mid-13th century, and English law forbade bakers from using harmful fillers in their bread. In the 1800s and 1900s, chemists and doctors protested the use of harmful preservatives and additives in food. In the early 1900s, an expose showed that many items hawked as medicines were poisonous.

The FDA was formed in 1930. Throughout the 1900s, various incidents pushed the FDA to consider standardizing the concept of good manufacturing processes. Eban highlights two incidents, one in the 1930s and one in the 1960s, in which many children were affected by improperly manufactured medicine. These incidents eventually catalyzed the FDA to create stricter standards and to focus on the process, not just the product, during inspections.

At Ranbaxy, Thakur encountered resistance to his efforts to digitize records and standardize systems at the company. He initially chalked up the resistance to the fact that there must be a “hierarchical old-boy’s network in place” at the company (58). 

In January 2004, Brar, the CEO, stepped down. He was essentially ousted by Malvinder Singh, the son of Ranbaxy’s founder. Brar was then replaced by Brian Tempest, with Tempest a placeholder until Malvinder could officially take over.

Barbhaiya, Thakur’s mentor who had initially convinced him to work for Ranbaxy, left the company. He told Thakur he was skeptical of some of the “shenanigans” he had seen at Ranbaxy (61). Thakur met his new boss, Dr. Rajinder Kumar, and liked him.

One day, Kumar called Thakur into his office and told him to set aside all his work to look into some issues at the company. The World Health Organization (WHO) had found that data for one of Ranbaxy’s drugs was completely faked, and Kumar thought the problem was even more widespread. Kumar wanted Thakur to investigate every drug and every production line at the company to determine which data was falsified and if there were any other issues with the drugs being manufactured.