Problems at a drug company have once again put FDA in the crosshairs of the House Energy and Commerce Committee.

After a Department of Justice investigation of Ranbaxy's manufacturing and product development practices became public, Reps. John Dingell and Bart Stupak suggested FDA did not monitor the company closely enough. The Michigan Democrats have also explored that theme in hearings examining the origins of contamination in heparin products.

Dingell, chairman of the House Energy and Commerce Committee and Stupak, chairman of the Subcommittee on Oversight and Investigations, announced on July 17 that the committee would launch a formal investigation into the approval of Ranbaxy drugs and potential violations of good manufacturing practices regulations.

They also questioned whether FDA "knowingly allowed" Ranbaxy to continue to sell drugs it suspected had been fraudulently approved and manufactured. They also suggested that FDA had failed to carry out plant inspections in India prior to approval of Ranbaxy's drugs.

DOJ is investigating whether the Indian pharmaceutical company fabricated bioequivalence and stability data in its abbreviated new drug applications.

"If these allegations are true, Ranbaxy has imperiled the safety of Americans in a manner similar to the generic drug scandal we uncovered 20 years ago," Dingell said in a statement. "I would like to know whether FDA officials knew about these allegations and what, if any, action was taken."

Congressmen Link Heparin, Ranbaxy

Stupak added that one of the great reforms that came out of the generic drug scandals was the institution of pre-approval inspections. He said FDA did not conduct such inspections of heparin active pharmaceutical ingredients manufactured in China.

"Now it appears that such inspections in India - the second largest supplier of drugs to the United States - may be another example in which FDA found it inconvenient to assure the safety and effectiveness of drugs before approving them for marketing to American patients," Stupak stated.

He said if this is the case, the Bush Administration "should clean house at the FDA now" and not wait until a new administration takes over in January.

While allegations of misconduct have not been leveled against any other company, the Ranbaxy investigation could impact the generic industry as a whole and may compel FDA to conduct more stringent inspections.

One executive, Watson CEO Paul Bisaro, has been advocating that FDA loosen its manufacturing oversight (¹ Also see "For Watson CEO Bisaro, “Operational Efficiency” Is An Industry-Wide Calling" - Pink Sheet, 23 June, 2008., p. 27). Given the agency's experience with Ranbaxy that is not likely to happen.

And Dingell's continued criticism of FDA could make it more difficult for the generics industry to push forward legislation for the approval of follow-on biologics that would allow the agency to use its discretion to decide what types of trials would be required (² Also see "Editor’s Perspective: Is The Ketek Scandal Good For Big Pharma? Generic Biologic Bill Could Suffer" - Pink Sheet, 25 February, 2008., p. 4).

If Ranbaxy's regulatory troubles continue long enough, however, FDA may find itself under different political pressure. The company has the first-to-file application for a generic of Pfizer's Lipitor (atorvastatin), and under a recent settlement between the two firms it would launch in 2011 (³ Also see "Pfizer Settlement With Ranbaxy Delays Generic Lipitor Entry" - Pink Sheet, 23 June, 2008., p. 22).

If that launch were to be blocked because Ranbaxy still had unresolved data and manufacturing issues, FDA might face questions about why it is harming consumers by delaying access to a cheaper version of the blockbuster statin, as opposed to the accusations now that the agency lets products rush onto the market too quickly.

DOJ's investigation of Ranbaxy raised questions about whether the company's deal with Daiichi Sankyo would go through. Last month Daiichi, Japan's second largest drug company, announced plans to acquire a majority of Ranbaxy for up to $4.6 billion in cash (⁴ Also see "Daiichi Gets Into Generics With Stake In Ranbaxy" - Pink Sheet, 16 June, 2008., p. 21).

On July 17, Ranbaxy and Daiichi issued a joint press release stating that the deal is binding and final, subject to regulatory approvals. After news of the DOJ investigation broke on July 14, shares of the company plummeted 18 percent. By the end of the week the share price had recovered by 7 percent. The company's chairman Malvinder Mohan Singh was quoted in The Hindu Business Line saying that rival companies were trying to bring Ranbaxy's share price down by spreading confusion and speculation in the wake of DOJ's actions.

Trouble For Ranbaxy Follows FDA Inspection

DOJ's investigation became public when the department filed a July 3 motion in the U.S. District Court for the District of Maryland to enforce a subpoena to obtain audit reports on Ranbaxy operations, which were prepared by Parexel Consulting.

Ranbaxy, through its outside lawyers, hired Parexel to review its manufacturing processes in response to an FDA inspection of its plant in Paonta Sahib in February 2006.

The agency issued a warning letter to Ranbaxy citing GMP violations, including incomplete drug testing data and insufficient documentation to show stability tests were valid. FDA also put a hold on approval of Ranbaxy ANDAs originating from the plant.

Ranbaxy had contended that the audits were privileged information but eventually agreed to release the material. In a July 14 response to DOJ's motion, the company said it had already informed the government that it had waived its privileges for all audits conducted by Parexel.

"Ranbaxy argued to both FDA and DOJ that government requests for voluntary audits conducted at the request of counsel were bad policy," the company states in the court filing.

"Ranbaxy's counsel explained to DOJ that if drug manufacturers learned that the government would force them to disclose the results of voluntary audits to help build civil or criminal cases, companies would stop doing audits, or would stop hiring tough auditors like Parexel and instead hire auditors who would be less likely to be tough and thorough."

Ranbaxy said that in late 2007, FDA regulators told the company that the agency would not act on applications from the Paonta Sahib plant without access to Parexel's audits so it felt it had no choice but to waive privileges for the data.

In addition, Ranbaxy said it had recently provided information about the audits to a third party and believed this weakened its privilege claims.

The company said Parexel had produced 12 audit reports of its operations and that Ranbaxy personnel made many improvements recommended in the reports. Ranbaxy said it also re-examined the validity of stability data it submitted to FDA and "detected no errors that would have affected product quality and safety."

Ranbaxy said it would submit supporting documentation for its ANDA applications to DOJ, stating that this information "will demonstrate that no data manipulation, fraud or dishonesty occurred in those applications."

In its filing with the court, DOJ said there was evidence that suggested Ranbaxy uses active pharmaceutical ingredients from unapproved sources, "blends unapproved API with approved API, and uses less API in its drug than had been approved by the FDA." Any of these actions, the department said, would cause a drug to be subpotent, superpotent or adulterated.

While Dingell and Stupak raised the specter of the generic drug scandals of the late 1980s, the DOJ did not cite concerns about any other company. In the 1980s, several generic manufacturers were found to have falsified data and paid illegal gratuities to FDA staff and agency reviewers were found to have given preferential treatment to some companies.

In recent years, one other generic manufacturer has faced allegations of fraud. In 2005, Able Laboratories recalled all its products from the market after FDA found the Cranbury, N.J. company routinely failed to reject drugs that did not meet established standards. Executives of the now defunct company pled guilty to forging data to obtain FDA approval (⁵ 'The Pink Sheet,' Aug. 13, 2007, In Brief).

Ranbaxy’s Ripples: Generic Drug Integrity Returns As Focus For Congress, FDA

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