Bottle of Lies

The Inside Story of the Generic Drug Boom

Katherine Eban

• Publisher: Ecco
• Year: 2019
• ISBN:
  9780062338808
• Topic: Medicine
• Subtopic: Pharmacology

A NEW YORK TIMES BESTSELLER

From an award-winning journalist, an explosive narrative investigation of the generic drug boom that reveals fraud and life-threatening dangers on a global scale— The Jungle for pharmaceuticals

Many have hailed the widespread use of generic drugs as one of the most important public-health developments of the twenty-first century. Today, almost 90 percent of our pharmaceutical market is comprised of generics, the majority of which are manufactured overseas. We have been reassured by our doctors, our pharmacists and our regulators that generic drugs are identical to their brand-name counterparts, just less expensive. But is this really true?

Katherine Eban's Bottle of Lies exposes the deceit behind generic-drug manufacturing—and the attendant risks for global health. Drawing on exclusive accounts from whistleblowers and regulators, as well as thousands of pages of confidential FDA documents, Eban reveals an industry where fraud is rampant, companies routinely falsify data, and executives circumvent almost every principle of safe manufacturing to minimize cost and maximize profit, confident in their ability to fool inspectors. Meanwhile, patients unwittingly consume medicine with unpredictable and dangerous effects.

The story of generic drugs is truly global. It connects middle America to China, India, sub-Saharan Africa and Brazil, and represents the ultimate litmus test of globalization: what are the risks of moving drug manufacturing offshore, and are they worth the savings?

A decade-long investigation with international sweep, high-stakes brinkmanship and big money at its core, Bottle of Lies reveals how the world's greatest public-health innovation has become one of its most astonishing swindles.

Part I

Shifting Ground

Chapter 1

The Man Who Saw Further

LATE FALL 2001

Hopewell, New Jersey

Dinesh S. Thakur was fastidious. He wore perfectly ironed khakis, a white button-down shirt, a dark sports jacket, and well-polished loafers. Stocky and of medium height, he had a round face, full head of dark hair, and deep-set eyes that gave him a doleful appearance. On this chilly afternoon, the leaves just beginning to turn gold and crimson, the thirty-three-year-old information scientist set out across the grassy slope toward the man-made lake. It was a favorite destination on the Bristol-Myers Squibb campus, where employees went to clear their heads or escape the highly regimented corporate culture, if only for their lunch hour.

But today Thakur had come at the behest of an older and more senior colleague, who’d invited him for a walk to discuss an unspecified opportunity.

Bristol-Myers Squibb’s research and development center sat on a manicured campus, just beyond a network of leafy residential streets and imposing stone homes. Inside the gated guard posts, low-slung concrete buildings with dark windows dotted the hillsides. The few trees were planted at regular intervals. The lush grass around the lake had been mowed with such precision that it looked like a striped carpet. Every hundred feet stood an emergency assistance pole, to summon aid if needed. Cars were kept to fifteen miles per hour. Even the lake’s turtles had a demarcated crossing lane.

The orderly grounds reflected the painstaking research that went on there. Scientists from this campus developed drugs that had entered the worldwide lexicon, from Pravachol for high cholesterol to Plavix to prevent blood clots. Decades earlier, what was then Squibb had developed an antibiotic to treat tuberculosis, for which its scientists won the prestigious Lasker Award. Bristol-Myers had forged new ground in cancer research. In 1989, the two companies merged. Nine years later, Bristol-Myers Squibb was awarded the National Medal of Technology and Innovation at a White House ceremony.

Thakur played a small but cutting-edge role in the company’s endeavors. He ran a department that built robots, automated laboratory helpmates intended to make the work of drug testing more efficient and reliable. Thakur’s lab buzzed with innovation. More than a dozen scientists reported to him. Pulleys, motors, bells, and levers were scattered about, and bright-eyed college students cycled through, pitching in as needed. Thakur set his own hours, which were long and sometimes involved staying overnight to watch the robots. They needed to repeat the same tasks faultlessly, with the goal of eliminating human error from the laboratory.

The results often did not turn out as desired, which was standard for a manufacturing scale-up. On these occasions, Thakur and his team were forced to scrap their work and start again. Yet they felt confident that the company viewed these failures as a normal part of the scientific process. When it came to Thakur’s lab activity, the old advertising slogan from Squibb seemed to still hold sway: “The priceless ingredient in every product is the honor and integrity of its maker.”

The work, with its scrupulous attention to detail, suited Thakur’s temperament. He was promoted steadily with strong performance reviews, one of which noted that he was “very logical, ethical and loyal” in dealing with peers and superiors. Over six years, he had steadily ascended to his hard-won title: Director, Discovery Informatics.

Punctual as ever, he made his way to the walking path that looped around the lake, where his older colleague, Rashmi Barbhaiya, was waiting. Heavy-set, with snowy white hair and dark circles beneath his eyes, Barbhaiya had been developing drugs at BMS for twenty-one years. He had an intimidating aura and the smooth manner of a senior executive. By contrast, Thakur was reserved and somewhat awkward, with little gift for small talk. But this had not hindered him at BMS, where few people understood his robotics work or sought to discuss it.

Both men were originally from India. Two years prior, Thakur had built an automated computer program for Barbhaiya’s group. More recently, as Barbhaiya oversaw BMS’s purchase of a small pharmaceutical company, he’d tapped Thakur to help transfer and reconcile the data. Today Barbhaiya was about to propose an opportunity Thakur did not predict.

As they walked along the footpath, Barbhaiya disclosed that he was leaving BMS—and the United States—to become the research and development director of India’s largest drug company, Ranbaxy Laboratories, which made generic medicine. Thakur was surprised. Barbhaiya had spent his whole career climbing to the upper ranks of one of the world’s top pharmaceutical research companies. At BMS, he had lived and breathed the prestige of creating new molecules. He’d become a recognized expert in whittling down the long odds that any drug maker undertakes when setting out to develop a new cure.

But Barbhaiya was planning to leave it all behind. To go from the brand-name sector in the United States to the generic one in India. By name, it was the same work—pharmaceutical research—but it was a seismic identity shift. The BMSes of the world invented. The Ranbaxys of the world duplicated. BMS did innovative science versus Ranbaxy’s copycat engineering. But the more Barbhaiya explained his decision, the less skeptical Thakur became.

In India, Ranbaxy was legendary, and the family that built it, the Singhs, were hailed as corporate royalty. As one of India’s oldest and most successful multinationals, Ranbaxy had reinvented the perceived capabilities of an Indian corporation. In 2001, it was on track to clock $1 billion in global sales, with its U.S. sales reaching $100 million after only three years in the American market. The FDA had already approved over a dozen of its drug applications. Ranbaxy had offices and manufacturing plants around the world, including in the United States, but was headquartered in India. Looking to the future, Ranbaxy was going to be investing heavily in innovative research. The company was aiming to develop new molecules. Barbhaiya would be building the company’s research capacity, almost from the ground up. “Why don’t you come with me?” he proposed. “You’ll be closer to your parents and doing something for the country.”

It was an offer that, on the face of it, made little sense. BMS had paid for Thakur’s ongoing schooling, a master’s program in computer engineering. He’d received years of in-house training on the best manufacturing and laboratory practices. But like Barbhaiya, Thakur knew that the ground was shifting beneath his feet. The generic drug business was booming around the world. Generic drugs—legally produced copies of brand-name drugs—comprised half of the U.S. drug supply, a number that was steadily growing. The patents that protected dozens of best-selling drugs, from Lipitor to Plavix, would expire within the next decade, meaning that generics companies would be able to manufacture and sell copies approved by the Food and Drug Administration (FDA). With the demand for generics growing, all their jobs would be reconfigured soon enough. One of the main drivers behind this shift was India itself, which was fast becoming a global player in the pharmaceutical industry.

As Thakur contemplated the pros and cons of Barbhaiya’s offer, he had a further thought. The goal in the brand-name world was to make the best possible drugs for the highest possible price. It was the heyday of the branded drug industry, with companies reaping billions in profits on the success of big-name drugs. The largesse at BMS reflected this. Office Christmas parties included caviar and champagne. Sometimes Thakur caught an empty seat on the corporate helicopter that shuttled executives between the company’s hubs in Princeton, New Jersey, and Wallingford, Connecticut, marveling at the easy commute for those at higher pay grades.

In the generic world, the culture would be different because the goal was different: to make the best cures affordable and available to all. But it would mean leaving the United States, where he’d spent decades focused on building the best possible life he could.

Thakur had first come to know America through its movies. In college, as an engineering student in Hyderabad, he had gone to see classic films such as Citizen Kane and Gone with the Wind.

In college, he took the GRE, applied to graduate programs in the United States, and got a scholarship to the University of New Hampshire, where he lived in the graduate dorm as one of only a few minority students. He had never been out of India before, had never seen snow. In his new home, he marveled at the beauty of the White Mountains, the serenity of old New England towns, each with its own church and town square. He drove to Acadia National Park whenever he could and loved biking its rocky shoreline. Otherwise, he studied almost continuously, producing a doorstop of a master’s thesis, which he later published in a journal under the title “Soluble and Immobilized Catalase: Effect of Pressure and Inhibition on Kinetics and Deactivation.”

Shortly after graduating, he was hired by a small biotechnology company to help automate its laboratories. There, though a picture of Thakur and his robots made it into the company’s annual report, his unsupportive boss told him that he lacked the requisite talent for the job. So he moved on to BMS, where he continued the same work successfully.

As he climbed the corporate ladder, his mother grew worried that he had not yet married. Through a family connection, his parents visited the parents of a young woman named Sonal Kalchuri, who was fun loving and well educated and had long dark hair and almond eyes. Thakur met her on a trip to Mumbai, and the two began a phone relationship and correspondence over the following eight months.

In most ways, they were opposites. He was compulsively organized. She was laid-back. He was a workaholic who “never let his hair down,” as she put it. She was social and loved parties. But they shared an interest in science. Sonal was just completing her undergraduate degree in engineering. And they both loved to sing. His childhood home had been filled with music. Both his parents sang in the classical Hindustan style. Over the years, Thakur had developed an excellent voice and a love of the genre’s sinuous improvisations. He and Sonal would go on to perform together in classical Hindustani bands.

They married in 1995 and had a traditional days-long wedding, with both of them draped in flowers. Thakur wore the customary turban for grooms. Sonal was wreathed in gold jewelry, and her hands were hennaed with intricate patterns. She loved the event, but Thakur found the socializing taxing. Afterward, the couple made a home in Syracuse, and he returned to work. For Sonal, the transition was painful. The twenty-three-year-old had never been away from her family before. Now she was alone in a house in a foreign country.

Nonetheless, she enrolled in a computer-engineering graduate program at Syracuse University and emerged with a master’s degree. She got an excellent job at the Carrier Corporation as a software engineer. Thakur moved up steadily at BMS. In 1999, he was promoted to an associate director position. This involved a move from the Syracuse office to the research institute in Hopewell, New Jersey, just a few miles from the company’s Princeton offices. The couple found a spacious home with a high-ceilinged family room that appealed particularly to Sonal. They were getting ready to start their own family.

Their son, Ishan, was born a week after the 9/11 attacks. The Princeton area was devastated. Typically, the parking lot at the Princeton Junction train station filled with the cars of workers who commuted an hour to their Manhattan jobs every weekday, then emptied every night. But after 9/11, cars remained, waiting for commuters who never returned from work.

Though Ishan was born amid tragedy, he brought unalloyed joy into the Thakurs’ lives. Sonal’s mother came to stay for eight months. And Thakur’s parents came to visit, too, for the first time since he’d left for graduate school in the United States eleven years earlier. It was during these hectic months that Barbhaiya proposed to Thakur that he return to India.

Thakur did not immediately share the offer with Sonal. He continued to think about it quietly, as his work progressed at BMS. The family moved again, to Belle Mead, New Jersey, which had better schools and was closer to Sonal’s work. Thakur continued his ongoing schooling, a master’s program in computer engineering, for which BMS was paying. And in-house training in the best manufacturing and laboratory practices also continued. To leave all of this for an Indian generics company seemed like a big step down.

But Thakur was getting restless at BMS and knew that he’d probably risen as far as he could, with little opportunity—at least in the short run—for further advancement. During a summer vacation in 2002, he went to India and stopped by Ranbaxy’s research and development center in Gurgaon. He was impressed by the company’s bustle and sense of potential. He’d have far more freedom and authority there. The offer was excellent. To his surprise, Sonal also became interested. She missed her family and wanted to return home. They resolved to give it a try.

Thakur set about recruiting several members of his BMS team. It struck his colleague Venkat Swaminathan, a software engineer, as an exciting opportunity. If Ranbaxy was really looking to develop new medications, it could be a welcome change from BMS’s restrictive bureaucracy. Dinesh Kasthuril, too, was intrigued. Though he loved his current job and was halfway through Wharton business school, also on BMS’s dime, he was impressed that Ranbaxy wanted to try to develop new drugs. And though they were all born in India, none of them had ever worked there before. All three wanted to contribute to their native country’s emergence onto the world stage. “A lot of it was from the heart,” Kasthuril recalled.

Their similar views further bolstered Sonal’s confidence about the move. She felt that her young family would have friendship and support. The three colleagues thought of themselves as setting off on a momentous adventure: to help build an Indian company dedicated to research, a Pfizer for the twenty-first century. Even as Kasthuril’s boss at BMS tried to convince him not to leave, he had to acknowledge that Dinesh Thakur was “able to see things further” than most people could.

Three months before their departure for India, Thakur achieved a long-awaited milestone: he became an American citizen, a fact that he noted proudly atop his curriculum vitae. But by then, he and his colleagues had set their course.

Chapter 2

The Gold Rush

AUGUST 17, 2002

New Delhi, India

On a humid day one year before Dinesh Thakur arrived at Ranbaxy, a company executive boarded a plane at the Indira Gandhi International Airport, bound for Newark, New Jersey. He’d left the office in a “crazy rush,” an employee recalled, to catch the almost sixteen-hour flight.

His mission was top-secret. In his luggage were five binders, each about three inches thick, containing reams of data. The documents comprised key portions of what would become an Abbreviated New Drug Application or ANDA, to be filed with the FDA. The application, once completed, would become known in industry parlance as a “jacket.”

But this was no run-of-the-mill jacket. The executive carried the most potentially lucrative dossier ever compiled in the generic drug world: the data the company would use in its application to make the first U.S. generic version of the world’s best-selling drug of all time: Lipitor. Pfizer’s vaunted cholesterol fighter was “the Sultan of Statins,” as Wall Street analysts called it. The molecule itself, atorvastatin calcium, was a descendant of Nobel Prize–winning science. Coupled with Pfizer’s marketing might, it had become the world’s first $10-billion-a-year dr...