We are in big trouble,” [Rajinder] Kumar [director, research & development, 2004-2005, Ranbaxy] said to [Dinesh] Thakur [director and global head of research information and portfolio management] intently as they returned and then motioned for him to be quiet. In his office, Kumar handed Thakur a report from the World Health Organization (WHO). It summarized the results of an inspection that the WHO had conducted at Vimta Labs Ltd., a company that Ranbaxy had hired to administer clinical tests of its AIDS medicine. The WHO had done the inspection on behalf of the South African government, which was buying Ranbaxy’s antiretroviral (ARV) drugs to treat its AIDS-ravaged population.
The inspection, conducted by a French inspector named Olivier LeBlaye, had uncovered astonishing fraud. Many of the “patients” Vimta had enrolled in the study did not seem to exist. Much of the data purporting to measure the drugs’ dissolution in the patients’ blood appeared to have been fabricated. The graphs from tests on entirely different patients were identical, as though photocopied. As Thakur read, his jaw dropped. There could be no assurance that the medicine had even been given to actual patients, owing to the lack of documentation. And there was no evidence that Ranbaxy had monitored the work or audited the results, as was required. This level of fraud meant that the drugs—destined for terribly sick AIDS patients—had essentially been untested.
With the company’s credibility on the line, Dr. Tempest [CEO and managing diretor, 2004-2005, Ranbaxy] had sent Kumar to reassure South Africa’s drug regulators that the situation at Vimta was isolated. Once there, however, Kumar went further, assuring the South Africans that he would do a full review of the antiretroviral portfolio and redo patient tests if need be.
Thakur listened intently as Kumar spoke. On the plane back to India, Kumar’s traveling companion, the director of bioequivalence studies for the company’s entire generic portfolio, told him that the problem was not limited to Vimta or to the ARVs.
“What do you mean?” asked Thakur, barely able to grasp Kumar’s point.
The problem went deeper, said Kumar. He told Thakur that he wanted him to put aside all his other responsibilities for the foreseeable future, go through the company’s entire portfolio—every market, every product, every production line—and determine what was real, what was fake, and where Ranbaxy’s liabilities lay. Kumar then asked him to check in by day’s end, as they set this plan in motion.
Thakur left Kumar’s office stunned. Were more of Ranbaxy’s drugs compromised? If so, how could the company have gotten approvals from the FDA, the world’s toughest drug regulator?
As directed, he returned at the end of the day, but Kumar was not in. Thakur waited. Finally, Kumar arrived, looking visibly upset. Without a word, he sat at his desk and worked intently for twenty minutes before finally looking up. “I need a drink,” he said darkly. Kumar explained that he’d spent the day fighting with the corporate office over what to do with the fraudulently tested ARV drugs. Kumar had insisted that there was only one right course: to withdraw the drugs from the market immediately and conduct the biostudies properly.
Though the corporate office had initially agreed, it drafted a press release stating only that Ranbaxy would look into the problem. Kumar revised the draft to state that the company was pulling the drugs off the market, effective immediately. But corporate kept returning the initial, vaguely worded press release for his approval. He sent back his revision again. “I am a physician, and I cannot sign off on something knowing full well it will cause harm to patients,” Kumar declared. “I don’t care how much money or face Ranbaxy loses. Either this stuff comes off the market or I am gone.” Thakur did not want to contemplate losing another boss—especially one he liked so much.
Thakur later returned home to find his three-year-old son, Ishan, playing on the front lawn. He suddenly recalled an incident from the previous year when the boy had developed a serious ear infection. The pediatrician prescribed Ranbaxy’s version of Amoxyclav, a powerful antibiotic. Despite his son’s taking it for three days, the boy’s 102-degree fever persisted. So the pediatrician changed the prescription to the brand-name antibiotic made by GlaxoSmithKline. Within a day, Ishan’s fever was gone. Thakur took the boy in his arms, resolving not to give his family any more Ranbaxy medicine until he knew the truth.
****
On October 14, 2004, several months after assigning Thakur to dig up the truth, Kumar stood in the boardroom at Ranbaxy’s corporate headquarters in New Delhi, facing members of the scientific committee of the board of directors. His audience included Brian Tempest; Malvinder Singh, then president of pharmaceuticals; the board chairman, Tejendra Khanna, who had served as the lieutenant governor of New Delhi; Dr. P. S. Joshi, a prominent cardiologist; and several others. The company secretary was asked to leave the room.
Kumar showed the men a PowerPoint of twenty-four slides that Thakur had prepared. It was entitled “Risk Management for ANDA Portfolio.” To some extent, it was a work-in-progress, as it still did not contain U.S. market data. But the presentation made clear that in its race for profit, Ranbaxy had lied to regulators, falsified data, and endangered patient safety in almost every country where it sold drugs. “More than 200 products in more than 40 countries [had] elements of data that were fabricated to support business needs,” the PowerPoint stated. “Business needs,” the report showed, was a euphemism for ways in which Ranbaxy could minimize cost, maximize profit, and dupe regulators into approving substandard drugs.
No market or type of drug was exempt, including antiretrovirals purchased by the United States and the World Health Organization to fight HIV in Africa. In Europe, the company used ingredients from unapproved sources, invented shelf-life data, tested different formulations of the drug than the ones it sold, and made undocumented changes to the manufacturing process. The PowerPoint also noted that the fallout from the Vimta audit, which had initially taken Kumar to South Africa, was already drawing the attention of regulators and could do further damage to the company’s reputation.
In entire markets—including Brazil, Kenya, Ethiopia, Uganda, Egypt, Myanmar, Thailand, Vietnam, Peru, and the Dominican Republic—the company had simply invented all the data. Noting a corporate agreement to manufacture some drugs for brand-name companies, a slide stated, “We have also put our partners (Bayer & Merck in Mexico and in South Africa) at risk by using suspect data in our dossiers.”
Kumar proposed a drastic course: pull all compromised drugs off the market; repeat all suspect tests; inform regulators of every case of switched data; and create a process for linking the right data to the right drugs. A slide entitled “Guiding Principles” laid out what Kumar considered to be the company’s obligations: “Patient safety is our first responsibility. Our products have to be proven safe and effective. A short-term loss of revenue is better than a long-term losing proposition for the entire business.”
Kumar completed the presentation to a silent boardroom. Only one director, a scientist, expressed any surprise about the findings. The others appeared more astonished by Kumar’s declaration that if he was not given full authority to fix the problems, he would resign.
“Can you not bury the data?” one of the board members turned to ask Tempest. No one responded. The silence told Kumar everything he needed to know. Tempest asked for every copy of the PowerPoint to be destroyed and for the laptop on which it was created to be broken down piece by piece. No minutes of the meeting had been created.
Kumar had been certain that Ranbaxy would have to do the right thing after seeing incontrovertible proof that it had done the wrong thing for so long. Instead, within two days of the board meeting, Kumar submitted his resignation. He had been at Ranbaxy for less than four months. “Given the serious nature of the issues we discussed,” he wrote to Tempest, his only choice was to withdraw “gracefully but immediately.”
But the specter of Kumar’s PowerPoint, one of the most damning internal documents ever created by a company executive, would divide the executives for years to come. Inside the company, it would come to be known as “the SAR” (for Self-Assessment Report). The incriminating document was like a slow-burning fuse, headed straight toward the company’s top executives.
Extracted with permission from Juggernaut Books.