Generic Drugs and Global Deception

Generic drugs are supposed to be equivalent to brand-name drugs, but all too often they are defective. Katherine Eban’s book shows that corrupt overseas manufacturers have committed intentional global fraud. The system is broken and the FDA lacks the power to correct abuses.


I always thought generic drugs were the best choice. They were tested and proven to be equivalent to the brand name originals and cost much less. But I never imagined that some of the data the FDA relied on had been doctored as part of a global pattern of deception. The book Bottle of Lies: The Inside Story of the Generic Drug Boom by investigative journalist Katherine Eban is an eye-opener. The unfortunate truth is that generic drugs can’t always be trusted: some of them are ineffective or even deadly.

When brand-name drugs come off patent, less expensive generic equivalents can be marketed. Prior to 1984, there was no clear pathway for a generic drug to be approved in the US. Senator Orrin Hatch sponsored legislation to get generics approved through an Abbreviated New Drug Application. All the company had to do was show that the generic was bioequivalent and performed similarly in the body. The first company to file its generic application would win the right to market its product exclusively for 6 months at close to the brand-name price before competitors could jump in and slash the price.

The FDA has a worldwide reputation as the “gold standard” for regulatory bodies. It regulates about one-fifth of the US economy, safeguarding public health by ensuring the safety of food, drugs, medical devices, pet food, and veterinary supplies. It has had an admirable track record, for instance when it refused to approve thalidomide. But the generic drug revolution exposed some serious flaws in the system. By 2005, the number of foreign manufacturing sites regulated by the FDA exceeded the number of sites in the US. American drugs are no longer made in America, and the FDA lacks the resources to properly regulate them.

AIDS drugs used to cost $10,000-15,000 a year in the West, but Cipla was soon offering the same drugs to Doctors Without Borders for $1 a day in the rest of the world. The Ranbaxy company in India agreed to sell the drugs for 38 cents a day. They won FDA approval, but a company employee, Dinesh Thakur, discovered an appalling culture of deceit and eventually became a whistleblower despite threats to his career and his family. Thakur found that Ranbaxy submitted false dossiers to the FDA, invented data, altered or discarded records, faked dissolution studies, and cheated in every possible way. Astoundingly, the company’s head of analytical research told an auditor “It is not in Indian culture to record the data while we conduct our experiments.” Their manufacturing standards boiled down to whatever the company could get away with. In India, “you could almost always make a problem go away, whether through strategic payments or the threat of force.”

The FDA aimed to inspect every facility making drugs for the US market every two years, but by 2009 the number of overseas facilities had skyrocketed to over 3,000. The FDA lacked resources and the actual rate of inspections was closer to once per decade. Inspections of foreign plants were announced ahead of time, losing the surprise element and facilitating Potemkin village-like cover-ups by the company. Language barriers were a problem, but clever investigators were still able to find clues in computerized records. They learned not to let the companies show them the facilities but to demand to go wherever they wanted. There was bias and coercion, and orders were often given to downgrade findings prior to release. A secret report within the company revealed such incriminating information that the cover page carried the warning “Do not give to the FDA“. (But the FDA got a search warrant for the company’s New Jersey facilities and obtained the offending document as part of their haul.) The whistleblower’s information showed that the top executives of India’s biggest pharmaceutical company had committed intentional global fraud. Such widespread corruption was so hard to believe that his information was distrusted, and he had to hire a lawyer to protect himself.

The companies were creative about explaining away discrepancies and missing data. They showed a blatant disregard for the law and lied to the inspectors’ faces. They said it was a cultural thing. They knew they could get away with it. Eban says, “it seemed that Ranbaxy was better at making excuses than it was at making drugs.” There was great pressure to make cheaper drugs available to the public, and sometimes it seemed that Ranbaxy was too big or too important to fail. Ranbaxy had manufacturing plants in 11 countries and sales in 125 countries. There were political concerns, with fear of damage to international relations. The FDA had no police power, no jurisdiction in foreign countries. The worst they could do is impose an Application Integrity Policy (AIP) to halt all review of a company’s applications pending review by outside auditors. For various reasons, they found it difficult or impossible to invoke that penalty.

Eban is a skilled storyteller. Instead of a dry recital of facts, her book is an intriguing mix of thriller, mystery, science, psychology, soap opera, and suspense. The short chapters maintain interest so the reader will want to know what happens next. She tells how Ranbaxy deceived the Japanese company that wanted to buy it, gave inspectors contaminated water and food to make them sick, bugged their hotel rooms, and engaged in every kind of skullduggery. She describes regulatory efforts, Congressional inquiries, bribery, and deaths caused by inferior drugs.

Joe Graedon, co-author of the syndicated column The People’s Pharmacy, initially told his readers they could trust generic drugs, but changed his tune when he became aware of the evidence of harm. For instance, there was an epidemic of bad reactions to contaminated heparin from China, organ transplants failed when tacrolimus generics produced inconsistent blood levels, and cardiac drugs dumped overdoses into the bloodstream by dissolving too fast. A generic version of the statin drug Lipitor was found to contain tiny shards of blue glass, never adequately explained. Defective drugs were supposed to be destroyed, but often the company just resold them in another market. Africa became a dumping ground for defective drugs, and Africans died. An American doctor working in Rwanda coined the term “The Lazarus Effect:” dying patients suddenly recovered when switched from a generic to a brand-name drug.

There were reports of bad odors and foreign objects in generic pills, from eyelashes to insects. A woman in New Jersey was about to take her daily capsule for high blood pressure when she saw a flash of movement. A small, centipede-like bug was stuck halfway inside the capsule and was wriggling to free itself. There were sporadic regulatory successes: Ranbaxy pled guilty and paid heavy penalties, but the responsible executives were not punished and moved on to wreak havoc at other companies.

Conclusion: the FDA system for regulating generics is broken

One might hope that exposure of these problems would lead to solutions, but the problems remain. The FDA didn’t even learn its lesson about surprise inspections. In 2016, they agreed to stop unannounced inspections and to notify India’s companies in advance.

I get my medications from the Department of Defense system, which consistently chooses to stock the least expensive generic version. Now I’m worried. If you’re not worried, I urge you to read Eban’s book.

This article was originally published in the Science-Based Medicine Blog

Dr. Hall is a contributing editor to both Skeptic magazine and the Skeptical Inquirer. She is a weekly contributor to the Science-Based Medicine Blog and is one of its editors. She has also contributed to Quackwatch and to a number of other respected journals and publications. She is the author of Women Aren’t Supposed to Fly: The Memoirs of a Female Flight Surgeon and co-author of the textbook, Consumer Health: A Guide to Intelligent Decisions.