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Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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September 17, 2008

Ranbaxy: Cutting Corners, or Falsely Accused?

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Posted by Derek

While the US has the world's most expensive prescription drugs, we have the world's cheapest generics: once that patent goes away, it goes away. But the generic drug business is still very profitable, and it's viciously competitive. One of the biggest players is India's Ranbaxy, now in the process of being acquired by Japan's Daiichi Sankyo. They compete hard at every step of the process, from fighting patent cases in order to make drugs go generic more quickly, right down to price and distribution to pharmacies.
But it looks like they've been pushing it a bit too hard. The FDA has banned the import of thirty Ranbaxy-made drug substances after uncovering what they say are bad practices at three of the company's plants in India. And this comes on top of another investigation, an even more serious one, looking into whether the company out-and-out falsified data during the drug approval process.

The company seems to be co-operating with the first investigation, but they're fighting back hard on the second one - which makes sense, because that's the one that can really get them in trouble. Ranbaxy, for its part, seems to have suggested that some big-pharma rivals are behind the accusation. I doubt that myself, although it's not impossible - but neither is it impossible that the charges have something behind them. US companies have found themselves in big trouble over such issues, too.

Overall, what Ranbaxy and the other Indian drugmakers have to fear is ending up in the same public opinion category as the Chinese companies, who have had one quality scandal after another. It's going to be a long time before they lose their bad reputation, and the Indian firms definitely don't need to throw away what they've built up. Look for Ranbaxy to try to clear its name as fast and as publicly as possible.

Comments (23) + TrackBacks (0) | Category: Business and Markets


1. Don B on September 17, 2008 8:13 AM writes...


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2. HelicalZz on September 17, 2008 8:29 AM writes...

Ouch. But the surprise expressed by the company stretches credibility. Generic manufacturers are in the business of doing things as cheaply as possible to gain market advantage. This economic pressure will always butt heads with 'costly professionalism' and as such requires all the more oversight. A strong message from the FDA was likely necessary for the industry overall.

That all said. A statistic I recently saw on declining exclusivity periods for big pharma (can't find it right now) is very disturbing -- though not surprising given longer development cycles and slower approval rates. I understand that one consideration being put forth in the biosimilar policy considerations is a fixed or minimum exclusivity period for new biologic drugs post approval. I think the small molecule pharma industry needs a similar provision such as a minimum 8 years exclusivity post initial approval of any new chemical entity (NCE). Perhaps its time to rewrite some of Hatch-Waxman (won't happen though).


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3. anon on September 17, 2008 9:23 AM writes...

"Ranbaxy and the other Indian drugmakers have to fear is ending up in the same public opinion category as the Chinese companies"

Which would be "as low as one can possibly be". And yet our Pharma executive Overlords seem convinced that paying for cheap Chinese chemists that have been running reactions all of a month; lie through their teeth; and don't respect IP is a productive strategy? Astounding.

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4. MTK on September 17, 2008 9:41 AM writes...

Someone correct me if I'm wrong, but I believe the patent clock is stopped during the approval process.

As for quality issues, those can and do happen everywhere. Schering-Plough earlier this decade had huge problems in their manufacturing facilities. Abbot was fined some $100 million by the FDA in 1999. Lilly took forever fixing some of their issues and those were primarily in Indiana, not India, so don't think this is a result of locale or geographic culture.

Why has Pharma had similar quality issues as Ranbaxy? Because whether it's generic or prescription, the economic pressures on manufacturing are probably no different in reality. It seems that Manufacturing is constantly being restructured in every Pharma company as they look to lower costs as much as possible all the time. From what I've observed being on the manufacturing end can be an absolute pressure cooker.

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5. Amelia Earmark on September 17, 2008 9:44 AM writes...

This race to the bottom doesn't seem like such a bad idea when you are standing in line at CVS. $5 a pill? $1 a pill? 1 Rs a pill? Who cares? Shovel them into the bag.

But when I look at prices for flying to, say, LA, I want there to be a minimum. As much as I would like to fly cross country for $10, I know that this amount won't pay the nut for a safe trip. There is a price below which I would feel very scared to go on a regular basis. I don't know what that is, but I suspect it is not ten bucks.

Should be the same for a tab of pardoprunox hydrochloride. I don't want to be taking ones that ship in from Somalia at 500 to the nickel.

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6. processchemist on September 17, 2008 9:46 AM writes...

Those familiar with cGMP (and with the generics market) know that you can be competitive AND compliant, but you can't be IMPOSSIBLY CHEAP and compliant. Onestly I was expecting something like this happening to others (Cipla, Matrix); Ranbaxy is (was?) among the most reputable indian companies (some magnitudes grades of quality over the best chinese companies).
Now I hope that FDA will purge in the same way their list of approved/inspected chinese manufacturers.

About Pharma executives overlords, you can be sure that they will keep in their search for the impossible (excellent chemists/scientist for free, or, better, excellent new products not coming from science but magically created by marketing departments)

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7. Petros on September 17, 2008 9:52 AM writes...

And then there was the shortage of flu vaccine after the FDA came down hard on Chiron's production

As for product cost, I beleive generic simvastatin is one of the cheapest pills around, at something like 10 cents per tablet in Europe, and that's hardly the simplest drug around

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8. processchemist on September 17, 2008 10:40 AM writes...


I don't know so much about formulation prices (an old rule of thumb says that the API makes 20% of the price).
But simvastatin it's hardly the cheapest API around:
some typical chinese prices for ingredients of dubious status (EP?USP?BP? DMF?): ranitidine, 20 USD/Kg, nabumetone 60 USD/Kg, benzocaine 7.2 USD/Kg

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9. Anonymous on September 17, 2008 1:26 PM writes...

Check this

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10. HelicalZz on September 17, 2008 2:21 PM writes...

This isn't the report I recall but it is a recent survey of market exclusivity lifetimes of branded pharmaceuticals. The data in figure 5 was what I was referring to. (opens pdf)

Only scanned this so far, but it looks worth reading (c'mon all you chemists, admit you love economics too).


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11. Anonymous on September 17, 2008 7:59 PM writes...

Oh, say isn't so?

The cheap countries are breaking the rules!

How do you think they can do it so cheaply!

I'm shocked. Shocked.

Kinda funny that GSK is in process of moving huge chunks of R&D to India & China.

Not a month goes by without a serious product quality recall from China. And GSK thinks that moving from US/UK to China/India is its solution?

One word for GSK/Titanic: ICEBERG!!!!!!

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12. Norman Yarvin on September 17, 2008 8:47 PM writes...

Why doesn't the FDA just test random samples of drugs on import to the US? Then they wouldn't have to fly over to India to nag people about their paperwork. Plus, it would be a more reliable process, since paperwork can easily be flawed for any of a number of reasons. Or is there something horribly difficult about testing drugs for purity, that would make this impractical?

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13. processchemist on September 18, 2008 2:07 AM writes...


An hypotetic case:
let's say that for API A GMP is required only for last 2 steps of the synthesis. In step target-3 you use an intermediate with a 6% of biphenyl. How many biphenyl can be tolerated in an API product? ppb?
So, to be honest, you should include an analytical method to test biphenyl content: a cost, troubles with the regulatory authorities etc. But you're a lucky man, and the biphenyl containing intermediate can be kept out of the DMF, and no analitycal method will be provided in the papers. So the hypotetical tests of the product by regulatory controls (that will follow pharmacopeia or the methods included in the DMF) will find nothing also in presence of ppm of biphenyl.
Note, in the chinese heparin case the contaminant was invisible to the *validated* controls of both Ely Lilly and public authorities.

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14. John Thacker on September 18, 2008 10:54 AM writes...

"Someone correct me if I'm wrong, but I believe the patent clock is stopped during the approval process."

My understanding is that those extensions under Hatch-Waxman are no longer in force, since in 1995 the US adopted the Uruguay Round agreements and, among other things, switched patent terms to 20 years after filing from 17 years after granting.

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15. MTK on September 18, 2008 12:11 PM writes...

Thanks for the correction, John.


What you describe, random testing, is looking at the outcome. GMP, Good Manufacturing Process, is just that, a process. The theory being that good processes or behaviors will ensure good outcomes.

Beyond that, however, if one looked only at outcomes then it would be very difficult to determine why something failed. So you need to have the recordkeeping, the SOP's, and the reviews in place to help assure not only a good outcome, but speedy and effective investigation and remedy should you have a bad outcome.

I'm a big fan of GMP. While some consider all the recordkeeping a pain in the butt, I find the theory of it quite elegant. Basically, it comes down to this:

a) What did you plan to do?
b) What is the expected outcome?
c) What did you actually do?
d) How do you know you did what you say you did?
e) What was the outcome?

Now within all that are all the little details, but that's what it comes down to and when it works it's a thing of beauty. Really.

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16. Hap on September 18, 2008 3:31 PM writes...

What does Rudolph Giuliani know about compliance issues?

The hiring of RG doesn't immediately raise my confidence in Ranbaxy, not just because I'm a liberal, but because it doesn't seem like he would be the appropriate or knowledgeable person to clean up a perceived mess. He might have useful political connections, and be able to spin, but neither of those things speaks well for the nature of their problems (or whether there are actual problems). If he is more qualified than I suppose, however, this would change my opinion accordingly.

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17. Jackson on September 18, 2008 4:54 PM writes...

I think anon 7:59 hits the nail right on the head. There's a reason why they can do it so cheaply. Simply violate every western standard and you too can make millions in the BRIC country slave wage machines.

So just as our politicians stay silent, where is the ACS in all this?

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18. MTK on September 18, 2008 10:23 PM writes...


That's BS. As noted plenty of Big US Pharma and others such as Chiron have had compliance problems. It took Lilly almost two years to fix their problems in Indiana.

You can't blame that on violating "western standards", unless you will concede that Lilly, Abbot, Schering-Plough, and Chiron violated "western standards" also.

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19. Nick on September 19, 2008 12:00 PM writes...

"You can't blame that on violating "western standards", unless you will concede that Lilly, Abbot, Schering-Plough, and Chiron violated "western standards"

I think the point is that the problems in the BRIC countries are endemic, chronic, systemic and unabashedly aggressive and unrepentant in their near murderous desire to pursue profit.

Since you are aware of the problems in the US companies, it shows our system works. THe problems
were fixed.

KEEP all manufacturing in the USA at any cost.

-A Patriot

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20. Anonymous on October 6, 2008 9:49 PM writes...

In response to 2 and 14 a company gets 7 years of exclusivity on a NCE from the FDA meaning that a generic cannot file an ANDA during that time. The patent holder can recover patent term under Hatch-Waxman for regulatory delay even after the GATT-Trips changes to the patent law.

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21. yuvrajbodke on September 22, 2009 12:32 AM writes...

plz send why ranbaxy trouble in us market

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22. julie roehm on December 22, 2009 7:40 AM writes...

Someone very close to Ranbaxy told me that the company should have never used the manufacturing facilies in question to manufacture and ship product into a regulated market! Now pharma and generics are using Indian companies to conduct their clinical and bioequivalence trials!

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23. buy medical scrubs sets on January 2, 2012 1:35 PM writes...

45cal: The rest of you are ALLOWING others to enjoy their lifestyles? How big of you. From where do you get this authority? Religious intolerance is one of the ugliest things Ive ever seen and I dont care what religion is demanding that THEIRS is the only right one. None of you who insist that its your way or NO way are following the loving words and examples of your supposed inspiration, Jesus Christ.

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