Bottle Of Lies: A Look At Generic Pharma’s Dark Underbelly

This is a book review of ‘Bottle of Lies’ by Katherine Eban.

When doctors in the United States noticed that their patients were not responding as expected to generic drugs that were being prescribed, alarm bells started ringing about the quality of these generic drugs which were required to be identical to the patented ones. That was the trigger for an investigation by Katherine Eban into how these drugs are manufactured and why they weren’t as effective as patented drugs. She finds this story to be true not just in the United States with a regulator like the Food and Drug Administration, which is often perceived to set the highest standards, but also in Africa as well. Many Indian doctors have had the same experience as their professional brethren in the U.S. and Africa, and have resisted recent attempts by the government to mandate listing the generic names of the drugs in prescriptions. However, Dr. Scott Gottlieb who was previously sceptical about generics, published a ringing endorsement after he became U.S. FDA commissioner in the Trump administration, publicly announcing that he even prescribes and gives it to his family – a belief that FDA process ensures “quality” of generics.

If you aren’t a finance geek but still liked The Big Short, you have to read Bottle of Lies. Writing a book about all the virtues of an industry, an organisation or a culture is easy and that’s perhaps the reason that most biographies are hagiographic – they cherry pick facts. It’s why Cold Steel: Lakshmi Mittal and the Multi-Billion-Dollar Battle for a Global Empire is not in the same league as Barbarians at the Gate: The Fall of RJR Nabisco.

The book is fast-paced, gripping and easy to read, without overpowering the reader with the depth of the author’s extensive research. The reader is gently persuaded about the need for better regulation and oversight, rather than bludgeoned with data and sources, which are extensive but neatly organised at the end of the book and do not come in the way of an easy reading experience.

While the title reflects the main theme of the book, Bottle of Lies does not ignore or even trivialise the role of Indian generic pharma companies in saving millions of lives all over the world. It celebrates this contribution and mentions Cipla in glowing terms. Chapter 7 of the book describes, in great detail the U.S. PEPFAR programme and the story of “Gandhian innovation” – the words of RA Mashelkar, one of India’s leading scientists, which brought about the “a dollar a day” revolution that made it possible for virtually everyone to access previously expensive HIV-AIDS drugs. It was surprising that no mention was made of Fire in the Blood, an outstanding movie by Dylan Mohan Gray which tells a heart-wrenching story of how, against all odds and Big Pharma, Indian generic pharma companies save millions of lives all over the world.

The book traces the history of the U.S. FDA and the development of the current regulations over the last century and makes a passing mention of the changes like the Hatch-Waxman Act, much against the lobbying power of Big Pharma, that have now made generic drugs the foundation of healthcare in the U.S. It documents the various disasters that could have been prevented with better regulation and how, in each instance, the FDA was slow and incompetent in recognising the crisis. Over the years, the propaganda of Big Pharma describing generics as “pirates” has diminished but patent thickets, evergreening patents to extend their monopoly and data exclusivity have created hurdles to generic competition.

The main story in the book is of Ranbaxy – its history, people, culture, ambition, rise to fame and the eventual fall with the unprecedented fine by the FDA and the successful litigation by Daiichi for misrepresenting its regulatory issues with the U.S. FDA.

The key characters like Dinesh Thakur, the Ranbaxy whistleblower, and the U.S. FDA inspectors, are detailed in a manner that makes one feel like it’s a movie script. The author describes individuals and their personal stories and doesn’t treat them merely as players in the story of generic pharma manufacturing. The description of the dawn raid on the New Jersey offices of Ranbaxy is straight out of NYPD Blue. Many of the experiences of the U.S. FDA inspectors visiting Indian manufacturing facilities that are vividly described should be familiar to everyone in the pharma industry. Actions taken by the FDA and even inspections now feature prominently in Indian business newspapers.

In the same way that The Big Short is not a book about how a handful of oddball finance geeks foresaw the crisis in the U.S. housing finance market to make huge profits but about how the U.S. government and the finance industry failed the test of integrity and trust, the events described in the book show how the U.S. FDA and the Indian drug regulator behaved in a similar reckless manner.

Of course, Ranbaxy and its executives are the key characters and Dinesh Thakur could well be described as the Forrest Gump of this story but many others like Rajiv Malik, formerly of Ranbaxy and now leading Mylan are named and it is clear that this could well be the story of many Indian companies.

Those who criticise the book and its author as “anti-Indian” or “pro-Big Pharma” clearly haven’t read the book. Other generic companies like Ethex which pleaded guilty to felonies and paid a fine of $27 million, Sandoz and Watson and patented drug manufacturers like Baxter, which had serious issues with Heparin, have also been named and shamed.

In one instance, Rajiv Malik, head of formulation development and regulatory affairs asked to “wave his magic wand” when there were issues with Sotret, one of Ranbaxy’s early successes in the United States. In today’s world of corporate governance, the board of directors would have asked if it was sensible risk management that Rajiv Malik, the head of formulation development was also heading regulatory affairs, when the head of regulatory affairs should be a check on any cowboy tactics that he may be employing to fix a problem.

When taken together with a “corporate culture (that is) very paternalistic” and “your boss is your father - he is always right” it is virtually impossible to have honesty, dissent, and transparency within companies. We have all seen bosses becoming a part of the family of an employee - invited to family functions and treated as VIPs. Perhaps Indians have a philosophical justification for their behaviour – “There is no one truth; we all have different truths”. In stark contrast, the basic foundation of FDA regulation is that companies have integrity and value their reputation and will be compliant – inspection is merely confirmation of compliance. This clash of values is perhaps the critical reason for the crisis.

Since China is the major source of bulk drugs (raw materials for the pharma industry) the author investigates the bulk drug manufacturing industry in China and discovers a few well-organised industry scams there. This should worry all of us since India imports a vast majority of the raw materials for the pharma industry from China.

After the green revolution which was at the heart of India’s foreign policy and helped form the nucleus of the Non-Aligned Movement, India was unable to take the white revolution and the information technology revolution to its partners and as a result, not only did the Non-Aligned Movement become irrelevant, China gained influence at India’s cost. Healthcare could well be the next global battleground and India is well placed to make this one of its strategic bets for the future. Healthcare should be a part of India’s foreign policy but it needs to fix its domestic policy and regulations to make that happen. The book tells us many of the things we need to fix to get there.

Murali Neelakantan is an expert in healthcare laws. He was Global General Counsel at Cipla and Glenmark, and Senior Partner at Khaitan & Co.

The views expressed here are those of the author and do not necessarily represent the views of Bloomberg Quint or its editorial team.