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

On Valentine’s Day in 2007, the FDA raided Ranbaxy’s headquarters in Princeton, New Jersey. They seized about five terabytes of data, equivalent to “half the contents of the print collection of the Library of Congress”; among the documents was one marked “Do Not Give to FDA” (170).

After the raid, Malvinder Singh held a meeting with other executives in which they tried to identify employees who could have provided information to the FDA. Thakur was on the list, and so was Raj Kumar. Deshmukh, Ranbaxy’s lawyer, called Kumar repeatedly, and, in thinly veiled threats, warned him not to say anything that could implicate the company.

Thakur was advised to find a lawyer. With the help of an organization called the Taxpayers Against Fraud Education Fund (TAFEF), Thakur found a lawyer named Andrew Beato, who specialized in whistleblower cases. Lawyers were incentivized to take on whistleblower cases thanks to the False Claims Act, a law from the Civil War era that allows individuals to file lawsuits on behalf of the government and receive a portion of any money recovered. Beato agreed to take on Thakur’s case for free, and told him that if they won, Thakur could potentially receive a significant portion of the money recovered from Ranbaxy, and the law firm would get paid from that percentage. Thakur’s identity would remain secret as he helped the lawyers build the case as “a legally protected whistleblower” (178).

The Ranbaxy case fell to FDA agent Douglas A. Campbell. Some of his superiors thought the case wasn’t very important, but Ranbaxy’s data discrepancies were so egregious that Campbell thought the case was more widespread and significant than initially believed.

Campbell, who joined the FDA in 1998, witnessed drug applications explode with the wave of globalization in the 2000s. Campbell describes the FDA as overwhelmed and understaffed, unable to keep up with the rapid influx of drug applications from overseas companies.

Other whistleblowers from Ranbaxy started to contact the FDA. Hernandez communicated with an employee who used the name “Sunny.” Sunny described widespread practices of fraud at the company.

Though Campbell felt the Ranbaxy case was significant, he sensed pushback from within the FDA. Deb Autor, the head of CDER’s Office of Compliance at the FDA, seemed to resist Campbell’s concerns.

In 2008, Hernandez inspected a Ranbaxy plant in Batamandi. He caught the executives in a lie: They had signed off as being present for the testing of one of the company’s drugs, but sign-in records at the front desk showed that they were not actually present. The FDA declined to certify the Batamandi plant, and Ranbaxy withdrew one of its drug applications, but still, the FDA had not managed to crack down on the far-ranging fraudulent practices within the company. The FDA was still playing a “global game of whack-a-mole” (193).

Malvinder Singh communicated with Dr. Une of Daiichi Sankyo, a Japanese drug company, about Daiichi Sankyo acquiring Ranbaxy. While communicating, they used the code names “Diamond” and “Ruby” to maintain confidentiality.

Throughout the acquisition process, Singh actively hid evidence of Ranbaxy’s fraud from Une, and instructed others to do the same. He downplayed any concerns, fabricated excuses, and assured Une that the company wanted to be compliant. In 2008, Daiichi Sankyo signed an agreement to go through with the acquisition.

A month later, the US attorney of Maryland filed a motion that described widespread fraud at Ranbaxy. This motion surprised the FDA as well as Ranbaxy. Many FDA agents rejoiced at the news; they were frustrated with the FDA’s slow pace and were happy to see public progress in the case. Internally, top-level FDA employees crafted a memo that made it sound like the organization had been deliberating and moving toward taking action against Ranbaxy rather than stalling. Nevertheless, the publicity that the court motion received spurred the organization into action.

Ranbaxy’s lawyers became frustrated with Malvinder Singh, who continued to craft a narrative that portrayed the company as a victim of regulatory persecution rather than acknowledging the serious quality control issues that plagued its manufacturing facilities. Meanwhile, the acquisition deal went through. However, shortly afterward, Une received news that the FDA was invoking an Application Integrity Policy (AIP), on Ranbaxy, meaning that all pending and future drug applications from Ranbaxy would be put on hold until the company addressed the issues raised by the FDA.

Une tried to question Malvinder about the company’s issues but Malvinder was still evasive. Meanwhile, Deshmukh, one of Ranbaxy’s lawyers, became frustrated with Malvinder’s tactics. Deshmukh resigned.

In 2009, federal prosecutors met with Ranbaxy’s lawyers and outside lawyers. The prosecutors gave a presentation that showed years-long misconduct at the company. One of the lawyers asked for permission to share this information with Une, and he was granted permission. With this information, Une was able to finally see Ranbaxy clearly. Three years later, Daiichi Sankyo initiated legal action against Malvinder.