Today, Congressman Steve Israel (D-Huntington) called for a complete review of the Food and Drug Administration's (FDA) oversight of pharmaceutical drugs produced in foreign facilities. This call comes after a recent report in Fortune revealed that Ranbaxy Laboratories, an Indian drug company that is now the sixth-largest generic drugmaker in the U.S., was able to easily abuse the FDA's oversight policies, committing outright fraud and introducing untested drugs into the U.S. Currently, more than 80 percent of active pharmaceutical ingredients for drugs and 40 percent of finished capsules and pills sold in the U.S. are produced overseas.
Rep. Israel said, "It is simply unacceptable that we should have to question whether a pharmaceutical drug or an active ingredient is safe or effective because it is produced overseas. The massive fraud that occurred at Ranbaxy Laboratories, which went unchecked by the FDA, makes clear that we need a thorough review into the effectiveness of oversight procedures for pharmaceutical drugs and active ingredients produced in foreign facilities. We deserve to know that our families and these products are safe."
As Fortune's investigation found, Ranbaxy committed "outright fraud, in which the company knowingly sold substandard drugs around the world--including in the U.S.--while working to deceive regulators. The impact on patients will likely never be known. But it is clear that millions of people worldwide got medicine of dubious quality from Ranbaxy."
Ranbaxy was the first foreign generics manufacturer to sell drugs in the U.S., and today remains the sixth-largest generic drugmaker in the country. Despite years of fraud within the drug-producing facilities, it took a whistleblower who alerted federal officials to finally get the FDA to notice the wrongdoings and get Ranbaxy to own up to their crimes. Just this month, the company pleaded guilty to seven counts of federal crimes for committing fraud on a massive scale.
Despite the FDA's periodic inspections of foreign plants, the system is essentially an honor system and relies on information provided by the drug manufacturer. "We depend on that information to be truthful," said Gary Buehler, who headed the FDA's office of generic drugs for ten years. The approval system "requires the ethical behavior of the applicant," he said. Otherwise, "the whole house of cards will fall down."
In addition, in 2009, the Government Accountability Office found that only 11 percent of foreign drug manufacturing plants were inspected by regulators, compared to 40 percent of domestic ones. While the FDA has increased its inspections of plants abroad in recent years, the quality of these inspections is still questionable. Foreign drug manufacturers are given weeks of advance notice, and the inspections normally last less than a week due to the logistics of sending inspectors overseas. In comparison, domestic inspections can last up to six weeks and are unannounced.
In 2012, 84 percent of our drug supply was generic, with many of it manufactured abroad. In this global industry, it's important for the FDA to periodically review their own policies to ensure they are keeping up with an ever-changing industry.
Rep. Israel sent a letter to the Office of the Inspector General at the U.S. Department of Health and Human Services calling on them to do a complete review of the FDA's actions during the multiple years that Ranbaxy was committing massive fraud unchecked. The letter also called for a review of the FDA's oversight policies and how they could be improved to prevent this from happening again.