Cheap drugs and the millionaire whistleblower

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Cheap drugs and the millionaire whistleblower

Dinesh Thakur revealed information about the Indian drugs company Ranbaxy – but this helped Big Pharma (the big pharmaceutical companies). Sandhya Srinivasan reports from India.


Ranbaxy sells generic drugs all over the world. A US court made them pay a fine of $500 million.(© Kamal Kishore/Reuters)

Dinesh Thakur was born in India and is a naturalized US citizen. In 2002, he started working for Ranbaxy, a pharmaceutical company. Ranbaxy is famous for making a lot of popular generic drugs (“generic” means they are no longer protected by patents). These are sold around the world.

Thakar worked at the Ranbaxy near Delhi. His job was to look very carefully at the information that Ranbaxy sent to the US and other foreign markets to get approval for the drugs. He found that there were false test results for HIV anti-retroviral and other drugs; he also came across unprofessional manufacturing processes.

In 2004, Thakar told his manager about what he had found. They did not take any notice. And they said he was watching pornography on his company computer. He left his job in 2005 and left the country.

Two years later Thakur made a complaint in the US under the False Claims Act (FCA). People call this a ‘whistleblower’s law’. This means that individual people can file cases against companies that produce goods for the government, if they have information that the company knew they had given false information to the government.


Dinesh Thakur got $48 million as a reward. This is unusual for a whistleblower.

US federal and state medical programmes were buying Ranbaxy drugs. So the government investigated Thakur’s complaint and took over the case when it found there was enough information.

In May 2013, Ranbaxy admitted criminal and civil charges. The company had to pay fines and compensation of $500 million. This was the largest amount ever for a generics manufacturer.

Ranbaxy admitted they had given false information to US regulators; that they had not given required reports in time; that they had made false statements, and sold ‘adulterated’ drugs (drugs that did not follow the Good Manufacturing Practices (cGMP) of the US Food and Drug Administration (US FDA).

And Dinesh Thakur did not suffer like most whistleblowers. He had the support of a powerful US authority, and he also got $48.6 million. Whistleblowers sometimes get a percentage of the fines paid by the companies under the False Claims Act.

Thakur now plans to help companies follow what the regulators tell them. But he does not say where he is living.

Whistleblowing in India

Thakur was lucky in the end, but what he did will probably not help other Indians who want to talk about wrongdoing in their own country. Whistleblowers in India usually have many problems – they get threats, have to leave their jobs or are even murdered. And the government is very slow to decide on legislation to protect them.

The government did nothing about a report from the Law Commission in 2001. They waited until 2003 when Satyendra Dubey, an engineer in the northern state of Bihar, was murdered for talking about corruption in highway construction contracts.

After Dubey’s murder, people forced the government to act, so they started groups to listen to complaints of corruption in government. But this has had very little effect; it did not protect people like Indian Oil Corp employee Manjunath Shanmugham. He was killed in 2005 while investigating a problem of mixing petrol with other products.

Now, the Whistle Blowers Protection Bill 2011 is slowly becoming a law. But it is weak: it does nothing against corruption in the private or corporate sector. And it does nothing to stop problems for the whistleblower.

And the organisation that looks at the complaints can only make recommendations; it has no power to punish anyone.

Move against cheap drugs?

The problems with the Ranbaxy case have not helped the campaign for cheaper medicine. The company made some very bad mistakes says S Srinivasa. He works for Low Cost Standard Therapeutics, a manufacturer of essential drugs in Gujurat. They fight for people’s right to get cheaper medicines. Ranbaxy ignored warnings from the US food and drug authority. They broke a lot of laws, maybe because of pressure from management to reach the company’s targets for the US market. Almost half of the company’s world sales ($2.3 billion in 2012) were in the US.

Health activist Amit Sengupta (from the People’s Health Movement), agrees that Ranbaxy gave false data; but says that the media is using the case to fight against generic medicines made in India.

This is becoming more important. A lot of Indian companies that make generic drugs are trying to get bigger. And a lot of foreign companies need to expand into generic drugs as their big, successful drugs are coming to the end of their patent. One example is the Japanese transnational company Daiichi Sankyo. In 2008, they bought a controlling share of Ranbaxy.

Between 2011 and 2016, big, successful drugs with a value of at least $133 billion will lose patent protection. This will be bad for the patent-holding companies but very good for generics. The companies who hold the patents will not get nearly so much money. So they are questioning the quality of the generic drugs, especially Indian generics.

Because of the Ranbaxy case, people who are fighting against generics have started to try to get the public to be against generic drugs too. On the final day of the case, CBS News wrote a report called: ‘Do generics work as well as name brands? Maybe not.’

The big pharmaceutical companies say that generic drugs are of lower quality. This is part of its fight to keep drug prices high and make a lot of profit.

Not just generics

Other big cases between 2009 and 2012:

GLAXO SMITH-KLINE: fine of $3 billion for fraud allegations and not reporting safety data.

PFIZER: fine of $2.3 billion in 2009 for largest healthcare fraud in history.

ELI LILLY: paid $1.4 billion in 2009 to settle US federal and state fraud allegations.

ABBOTT LABS: paid $1.5 billion for civil and criminal complaints of off-label promotion of Depakote.

MERCK: fined $950 million for illegal marketing and false statements about safety of the painkiller Vioxx.

(Sources: US justice department, US FDA, and Hindu Businessline)

There is a lot of difference in the cost of patent drugs and generic drugs: in 2001, generic drugmaker Cipla cut the price of anti-retrovirals from $10-15,000 a year to $365. This forced Pfizer and other companies to cut their prices too. Novartis fought for the patent for the cancer drug Glivic, when it was charging $2,600 a month for the drug. Novartis lost its case. The generic version, imanitib, sells in India for about $175 a month.

India now produces 10 per cent of the world’s medicines. It is the largest supplier of active pharmaceutical ingredients to the EU. Eighty per cent of the active ingredients in all US drugs (generic and branded) are now made in foreign countries.

‘The US is now the most important market for companies like Ranbaxy,’ says Sudip Chaudhuri, an economist in Kolkata. ‘If they ban Ranbaxy there, other Indian companies will take over. The US will find it politically difficult to stop Indian generics because they save a lot of money with them.’

It is interesting that Britain does not follow the US on this. The Medicines and Healthcare products Regulatory Agency has ‘no evidence that any of the Ranbaxy products on the UK market are or have been of unacceptable quality’. The World Health Organization also supports Ranbaxy drugs.

The US says a drug is ‘adulterated’ if it does not follow cGMP requirements. ‘This is not always below standard,’ says Srinivasan of Low Cost.

And that’s important: generic drugs are safe and healthcare programmes around the world need them. And if Ranbaxy won’t sell them, another company will. Companies and agencies must make sure that drugs are made correctly, and marketed ethically.

They must also make sure that bad drugs don’t get on the market. It is also very important that whistleblowing is still possible for people who see bad things happening in the companies. And that companies that do wrong have to pay fines for doing wrong, not to give a competitive advantage.

Sandhya Srinivasan is a Mumbai-based writer and consulting editor with and the Indian Journal of Medical Ethics.


(This article has been simplified so the words, text structure and quotes may have been changed).