When Indian generic-pharmaceutical company Ranbaxy pleaded guilty in May to seven federal criminal counts of fraud and other charges and agreed to pay $500 million in fines and penalties, it was disturbing. After all, Ranbaxy makes generic versions of Lipitor and dozens of other drugs taken by people in the U.S. and around the world. But Fortune’s Katherine Eban knew the misconduct in the guilty plea was just the tip of the iceberg.
In “Dirty Medicine” — based on more than 1,000 confidential company documents and interviews over several years with Ranbaxy staffers — she took readers deep inside the boardroom, offices, and labs at the company. She deciphered reams of complex laboratory documents to deconstruct how the company routinely fabricated tests for its drugs. The article also depicted chilling scenes of its executives reacting to growing suspicion that its drugs didn’t work. “It’s just blacks dying,” one executive said when another executive pointed out how Ranbaxy’s AIDS drugs for poor Africans were adulterated or ineffective.
By obtaining secret company documents, she exposed how Ranbaxy’s top leadership was complicit in the worldwide fraud, and attempted to conceal it. Perhaps even more important, Eban’s reporting revealed how ill-equipped the U.S. Food and Drug Administration is to detect the sort of wholesale fraud that Ranbaxy practiced, raising deeply upsetting questions about the safety of the entire U.S. drug supply, which is now 84 percent generic, most of it made overseas.
Significant Findings:
• The article revealed that the company made up fraudulent data for more than 200 drug products in more than 40 countries around the world, and did so to increase its revenues.
• The article revealed that the Board of Directors and two successive CEOs were complicit in both the fraud and attempts to conceal it from regulators.
• The article revealed that Ranbaxy used brand-name drugs as a substitute for its own in bioequivalence tests, to generate better data, and directed its own executives worldwide to smuggle the brand-name drugs into India as part of this fraud.
• The article revealed that the FDA continued to approve almost a dozen of Ranbaxy’s new drug applications long after it had confirmed a pattern of systemic fraud at the company. In addition, the article exposed how the agency’s claims — that all of Ranbaxy’s drugs that it had tested met specifications — were false, and that the FDA made these claims to justify leaving Ranbaxy’s drugs on America’s pharmacy shelves.