A look at the
awards and certifications page
Ranbaxy Laboratories Limited's
(OTCMKTS:RBXLY) website reveals a decade of superlatives and top
distinctions for the Indian multinational generic pharmaceutical
giant: "[R]anked number one in the pharma sector in the Most
Respected Companies Survey by
named Ranbaxy Most Innovative Company of the Year. New Jersey
business journal NJBIZ recognized the company as one of the largest
pharmaceutical employers in the state.
And that was just 2007.
At the same time, the Food and Drug Administration was already two
years into an investigation of massive fraud committed by Ranbaxy
that would lead to the company pleading guilty to seven felonies in
May 2103. The $500 million settlement -- including $150 million in
criminal fine and forfeiture payments and $350 million in civil
claims -- was the
largest ever with a generic drugmaker over drug
Many Americans may not know the company by name, but we are
certainly familiar with its products. Ranbaxy exports to the US,
among 125 countries, generic versions of
Eli Lilly & Company's
Baxter Healthcare Corp's
) Ativan, and
) Imitrex and Valtrex.
Ranbaxy's generic of
) Lipitor was recalled in 2012 for containing glass particles in
its raw ingredients.
But this safety breach merely scratches the surface of Ranbaxy's
violations for selling adulterated drugs. On at least 15 of
Ranbaxy's new drug applications, the FDA found over 1,600 data
errors. The bioequivalence figures -- needed to prove a generic is
at least an 80% chemical match of the branded drug -- either didn't
exist or were cooked up by the company entirely.
Vince Fabiano, a former vice president of Ranbaxy,
CBS News, "In essence, they used the fraud as a competitive
advantage to build and grow the business here in the US." He added,
"Let's say you're treated with a generic cancer drug and -- and
your cancer -- progresses. Is it because of the drug? Is it because
of the disease process? No one would know. And it's harm that in
many cases would not be detectable."
The FDA didn't discover Ranbaxy's wrongdoings on its own; it took
an executive and chemical engineer within the company to expose the
deception. In fact, when it comes to medical research, the
government has very little to no involvement, leaving
pharmaceutical companies to underwrite objective clinical trials of
the very drugs they intend to sell.
For the past few years,
(OTCMKTS:RHHBY), the Swiss company that manufactures and markets
Tamiflu, has been under fire for presenting
to nations worldwide about the antiviral drug's ability to control
the flu. Since 2005, the US government has spent billions
stockpiling Tamiflu based on a paper that analyzed 10 studies, all
of them funded by Roche.
According to sources who spoke to us on background, the FDA simply
lacks the resources to independently test drug safety and efficacy.
The research and development costs to bring a drug to market can
run as much as a billion dollars. Once a drug has been approved,
organizations like the National Institutes of Health sometimes fund
further research in academic settings, and trials may also be
initiated by investigators for publication in medical journals, but
drug companies often pay for these studies as well.
Big Pharma's conflict of interest between research and profit
hasn't always been the status quo. In his book,
, John Abramson, M.D., explains, "As the function of medical
research in our society has been transformed from a fundamentally
academic and scientific activity to a fundamentally commercial
activity, the context in which the research is done has similarly
changed: First in universities funded primarily by public sources,
then in universities funded primarily by commercial sources, then
by independent for-profit research organizations contracting
directly with drug companies."
Three of the four major global advertising holding companies --
Interpublic Group of Companies, Inc.
(WPPGY) have either bought or invested in the companies that
perform clinical trials.
Though the prohibitive costs of conducting drug research is surely
beyond the scope of the FDA, the government has other incentives to
stay out of it -- namely, politicians' campaign coffers generously
filled by a well-funded pharmaceutical lobby.
Ranbaxy alone has spent nearly
on lobbying since 2010.