How the Generic Drugs We Take May Not Be What They Seem

Andrew Carnegie Fellow Katherine Eban exposes deception in the generic drugs industry

By Anita Jain May 27, 2020

The book opens with a chase. Arriving at a complex through an unused hallway, a wily investigator notices a man with a garbage bag full of crumpled paper walking toward him a little too quickly. When the investigator locks eyes with the man, he abruptly pivots and bolts down the hallway as the investigator sets off in pursuit. The man opens a side door and throws the bag onto a pile of garbage before disappearing into the maze of the building. Retrieving the bag, the investigator discovers a trove of incriminating documents.

The investigator is not from the FBI, the location is not a covert military facility in an enemy country, and the book is not a novel in Robert Ludlum’s Bourne series. The investigator is from the Food and Drug Administration (FDA), the site is a pharmaceutical factory in India, and the book is Katherine Eban’s Bottle of Lies: The Inside Story of the Generic Drug Boom.

With the help of an Andrew Carnegie Fellows grant in 2015, Eban, an investigative reporter who has written for Vanity Fair, Fortune magazine, and the New York Times, has produced a fastidiously researched and doggedly reported exposé of the fraudulent practices and corporate greed that have cast a pall over the $300 billion global generic drugs industry.

If you are taking drugs prescribed by a doctor, chances are that it is a generic drug, priced at an affordable level far below what you would pay for the branded drug originally produced and patented by a well-known pharmaceutical company like Pfizer or Merck. Generic drug companies step into this breach, reverse engineering medication to match the original in efficacy and dosage once its patent lapses. The entire generics industry benefits from the widespread assumption that the generic form is clinically equivalent to the branded drug, and in many cases it is. Eban devotes more than 400 pages to discovering when it is not. At best, some generic drugs can be ineffective at treating the problem for which they are designed, and at worst, they can be actively harmful to a patient’s health.

Although she writes about the generic drugs industry as a whole, the bulk of Eban’s reporting is dedicated to uncovering examples of dishonest practices in India’s pharmaceutical industry, which produces the largest volume of generic drugs globally, supplying an estimated 50 percent of global vaccines and 40 percent of generic demand in the United States. In particular, Eban closely follows the demise of Ranbaxy, one of India’s most promising drug companies, once on track to reach $1 billion in global sales, before it pled guilty to seven felony charges in the U.S. in 2013. Indeed, in India the book is marketed under the title Bottle of Lies: Ranbaxy and the Dark Side of Indian Pharma.

In one scene near the beginning of the book, Eban describes a meeting in the early 2000s in Boca Raton, Florida, of top executives from Ranbaxy. The executives were there to discuss Ranbaxy’s recent U.S. launch of Sotret, the company’s version of the brand-name anti-acne drug Accutane produced by Roche. Ranbaxy had rapidly made a dent in the U.S. market by coming out with the first available low-cost version of the popular drug.

Yet, the company had discovered that their drug was failing as a medication. Manufactured in a controlled environment, the batches Ranbaxy submitted for FDA approval worked like the original. However, when production was ramped up to make commercial-sized batches, impurity levels rose and the drug dissolved incorrectly. This type of irregularity was especially fraught for a drug like Accutane, which, even when formulated perfectly, could cause severe side effects like birth defects or suicidal tendencies.

Eban recounts the stark choice the executives faced: “Stopping the launch would mean abandoning the company’s financial goals. Continuing it with no further disclosure to regulators would endanger patients and violate the FDA’s rules." The result? "The push for profits won out.” The author goes on to describe how instead of immediately pulling Sotret off the market, Ranbaxy soft-pedaled the problems to the FDA, withdrawing only a few lots from the market, saying that it planned to fix some issues with the drug in the laboratory.

Bottle of Lies portrays many such cases of Indian drug companies not just skirting FDA rules but actively trying to deceive regulators — like the book’s opening scene featuring the shrewd FDA investigator at a factory belonging to Wockhardt Ltd. However, Eban pays far less attention to the legitimate, and in many cases heroic, practitioners of the global generics industry, who have enabled hundreds of millions of patients around the world to access drugs at affordable levels.

In fact, the rise of the Indian generics industry in the 1990s was rooted in humanitarian purpose. As the AIDS epidemic swept the world and especially Africa, Big Pharma set the price of its three-drug cocktail at a prohibitive $12,000 a year for a single patient. Infuriated, AIDS activists looked to India and prevailed upon one of the country’s oldest drug manufacturers, Cipla, to do better. Cipla’s chairman, Dr. Yusuf Hamied, did just that, offering the same cocktail for a dollar a day, a mere three percent of Big Pharma’s price tag. “It was a number low enough to be world-changing,” Eban writes. “It was the $1 a day figure that changed the calculus of the West — from ‘we can’t afford to help’ to ‘we can’t afford not to.’”

Notwithstanding this historic episode, the evolution of the generics industry has been somewhat less illustrious, according to Eban. The author’s gripping tale is revealed through the eyes of her main character, Dinesh Thakur, who left a cushy senior position at Bristol Myers Squibb in New Jersey and, along with two other colleagues, joined Ranbaxy in India in the early 2000s. “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,” the author writes.

Bottle of Lies recounts how Thakur, a few years into his tenure as global head of research at Ranbaxy, had begun to grasp the nefarious practices underpinning the company’s outward success, such as falsifying or inventing data for FDA regulators, leading him to discover that these actions weren’t singular lapses but rather part of an intentional strategy — one in which Ranbaxy misrepresented itself down to the factory level. Unlike in the U.S., where visits are unannounced, overseas FDA inspections are planned well ahead of time, allowing the drug company ample time to prepare for the inspectors’ arrival. Eban’s sources tell her how senior executives would descend on a Ranbaxy factory days, or weeks, before an inspection and dispose of unapproved materials and ingredients, whitewash evidence of changes in drug formulations, and plagiarize data from trials of brand-name drugs, passing them off as their own.

But Bottle of Lies is not just a rollicking good read; it shines a much-needed light on the potential dangers of an industry all of us use.

One particularly egregious Ranbaxy practice involved senior executives toting suitcases stuffed with brand-name prescription drugs when they traveled back to India. Of course, they could have been using the brand-name medications for research and development of the generic form. But Ranbaxy’s motivation was much darker, as Eban learns from several of its former employees: the company substituted the brand-name samples for their own in order to generate data showing how clinically equivalent the generic was to the original. With a front-row seat to these shenanigans, Thakur’s conscience forced him to resign. He alerted the FDA and became a whistleblower in a case that would, over the course of a decade, eventually bring down the company.

In many places, Eban’s tale of deception and intrigue unfolds like a thriller, replete with buccaneering investigators adept at rooting out the secrets that some generics companies have gone to great lengths to hide. But Bottle of Lies is not just a rollicking good read; it shines a much-needed light on the potential dangers of an industry all of us use. On first hearing, Thakur’s lawyer thought the whistleblower's story sounded utterly implausible, even impossible. Eban channels Beato’s amazement: “Fraud was typically limited and select — a rogue employee, a single incident, or a poorly managed plant. How could everything at a company be fraudulent?”

Anita Jain is a writer, editor, and communications strategist whose work has appeared in the Wall Street Journal, Washington Post, and the Guardian, among other publications.

The rise of the Indian generics industry in the 1990s was rooted in humanitarian purpose. As the AIDS epidemic swept the world, Big Pharma set the price of its three-drug cocktail at a prohibitive $12,000 a year for a single patient. Infuriated, AIDS activists looked to one of India’s oldest drug manufacturers, Cipla, to do better. They did just that, offering the same cocktail for a dollar a day, a mere three percent of Big Pharma’s price tag. Cipla’s motto: “None shall be denied.” (Credit: STR/AFP via Getty Images)