The man who brought Ranbaxy to its knees is pushing for ‘Made in India’ tag on drugs sold in US

• Generic drugs from India and China may clash with a campaign in US led by former Ranbaxy whistleblower Dinesh Thakur.
• In an exclusive interview with Business Insider, Thakur revealed his plan to force regulatory changes in US.
• Katherine Eban's new book, Bottle of Lies, raises alarming concerns about generic drugs in the US.
• This will be an added challenge for Indian drug makers already faced with pricing pressures in US.

These are not the best of times for Indian pharma companies. Recently, a US lawsuit alleged that Sun Pharma’s Taro amongst other generic drug makers colluded with each other to keep prices high. The news spooked pharma stocks and lost nearly 10% of their value in less than a month.

But, there is more bad news to come.

A frightening new book called ‘Bottle of Lies’ by Katherine Eban accuses generic drugs of poisoning. This exposé sounds a death knell to Indian generic drug makers, who sell off-patent drugs to US and Europe.

At the heart of this ‘cheap generics’ argument is a man called Dinesh Thakur who was a director at Ranbaxy ten years back. He blew the lid off of illegal practices by Indian pharmacos cutting corners and compromising on quality, before quitting the company in 2005.

Now, he is going a bit further to bring in a law where a consumer can know “where” the medicine in manufactured. Will he win the campaign to make drugs safer?

Business Insider caught up with the man at the centre of this freshly brewing storm.

Here are the edited excerpts.

Katherine’s book and the whole conversation around it, is it coming across as something that is targeting Indian companies?

The issue of data integrity is not unique to India. We see these problems here in the US as well. We see these problems in China, we have seen similar problems in Europe. The issue is what is it that we are going to do differently.

Up until now, the people who really talked about this were people who worked in the industry or policymakers. A book like this puts the issue in the hands of common people who are patients and consumers. So, the conversation is much broader. To answer the question that you are asking, you know, does this mean we are trying to bash India, absolutely not.

There is discussion about a big US manufacturer in there. It’s not just limited to India.

What will be your next step in the US?

In the US context, there is clearly a model that the FDA has followed. In 2012, the US Congress broadened the remit of the FDA, which was a local agency until then. It did not have offices outside of the country (US).

Now we are pushing Congress to look at the data and see if the model works. If it’s not, what do we need to do differently. We are asking the House Energy and Commerce Committee, which oversees the Department of Health and Human Services, under which FDA comes, we are asking the committee to hold public hearings and have this discussion.

That’s on the regulatory side. There are things that can be done from the patient’s side. For example, there is no legal requirement right now for the retail medicine to disclose where a certain product is manufactured. One of the things we are pushing for is for the Congress to make a law to disclose this. What it does is to put the power in the hands of the people. When I go and buy my medicines from a local pharmacy here, I can look it up and say this medicine was made in Shanghai in China, or this was made in a facility in India, and I can then decide whether I want to buy that medicine or not. Today, we don’t have that information.

Do you have any political backing for this?

We have a bunch of like-minded people trying to create some public awareness and in the Congress.

Isn’t this against the tone taken by the Trump administration, which wants to make medicines affordable. Adding compliance costs might not help. Do you the government will go for this?

The discussion on price, especially in the US, is centered around patented medicines, because those are really, really expensive. Most of the medicines made in India and China have very low price points -- typically between $10-$15 for a 30-day course. A part of what we are trying to do is highlight, that you can only cut the bone only so thin. After a point, there is not going to be any meat on it. The discussion is also about how low can you go before you stop manufacturers from cutting corners.

This argument again plays into the hands of the multinationals, as we call them here. It takes the argument away from the cost of drugs to the quality and safety.

My answer was in the US context. In India, the context is completely different. We have price controls. We have the National Pharmaceutical Pricing Authority (NPPA), which determines the prices of essential medicines. There is no equivalent of that in the US.

But Indian companies are also focussed more on the US. They are more worried about what’s happening in the US.

I agree with you completely. The advocacy we do in India will be very different from what we do in the US.

What has been the political response in the US so far?

The book has just come out. We are just starting this campaign. We had a similar campaign in 2015, after the Ranbaxy case broke. But at that time, the response was---we have this new law and we have to give it some time for it to take effect. We have an election next year. The price of prescription drugs is a big issue.

When the Ranbaxy case came to light, one of the arguments as that the standards cannot be the same for US, a developed market, and India, where providing medicines itself is a big challenge. Will that challenge remain in India?

I believe so. Unfortunately, the big difference between India and the US is that we have a lot of data here (US). The institutions here make decisions based on data. Unfortunately, India doesn’t do that. The Central Drugs Standard Control Organisation (CDSCO) is the most opaque of organisations. I have been dealing with them for six years right now.

Having said that, how do you make the case that someone who is making Rs 500 a day and has to spend Rs 200 on medicines, and if the medicine doesn’t work, what system do we have capture that information? In India, we don’t even a system to recall drugs.

Your next few months of advocacy will be focussed on the US. Is there another Ranbaxy kind of incident that you have come across in the recent months, which will be a part of your campaign?

In the book, there are two or three companies that there is a deep dive into. So, the book does a deep dive into Ranbaxy on what really happened there. There is also a deep dive into Wockhardt. Now that the book is public, I can talk about it. There is also a deep dive into Mylan, which is a West Virginia, US-based company.

On the question of regulations, do you think there is a need to revisit the settlement process?

The book goes into detail about jurisdiction. While the FDA has the mandate to inspect a foreign facility, how do you prosecute in a foreign jurisdiction? Who will serve a subpoena in a foreign country? I think that’s a discussion that has to happen at the Congressional level but I am not qualified to answer that.

Can the FDA have a SEC kind of approach while dealing with violations?

There are examples in the book that will make your hair stand. Why is it that the penalties we impose on serial wrong-doers are purely financial? That’s a good question. To what extent can we hold individuals accountable, not just impose financial penalties, which is cost of doing business. You take a risk and if you get caught, you just pay money and move on. Unless you hold individuals accountable, some of this behaviour won’t change.

Hopefully, this book will create that level of awareness among people so that we can demand, when it comes to healthcare, it should not be a SEC kind of settlement.

Do you think Indian companies have come a long way in the last six years?

I think so…. But we really have to change the attitude that we have one set of standards for the local market and another for the export market. Unless that changes, all the improvements we are trying to make… What have we spent money doing?

We have upgraded our plants, we have made them clean, sterile, and we got new equipment. We have invested a lot in third-party training. We have hired consultants who charge $8,000 a day. That’s what we have been doing for the last five years. Right?

But the real problem is where do send the people you hire at the bottom for training? You train them to make products for India and you train them to cut corners. Two years later, when they ask for a promotion, where do you promote them to? Export market. You think all that you taught them in the first 3-4 years, they are going to forget it the moment they work on an export market? It doesn’t work like that.

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A frightening new book on the safety of generic drugs could send India’s pharma industry into an even deeper pit