Drug Regulation

Special Report: The Curious case of the “A” Files: Is the truth out there?

The recent $500 million dollar fine against Ranbaxy by the U.S. Government has finally sparked some scrutiny of the Indian drug regulatory process and its highly understaffed drug regulator. This comes close on the heels of two damning Parliamentary committee reports indicting our drug regulatory body for cosying upto industry and neglecting the cause of public health… a cause for which they were allegedly set up in the first place.
Unfortunately for us, the Indian Government continues to be in denial. Both the Commerce Ministry and the Health Ministry, talk of vested interests out to malign India and the need to refrain from knee-jerk reactions against Ranbaxy.  While there may be some truth to this, the government must also make clear that conspiracy theories notwithstanding, they will never compromise on drug regulation. Sadly, no such clear message appears to be forthcoming, leaving one to wonder whether they are serious about drug regulation at all.
Image from here
As we noted on this blog several years ago, tis a tad bit unfortunate that while there is a significant amount of attention paid to “patents” and their impact on public health, there is hardly any attention paid to drug regulation itself. Very surprising, considering that drug regulation has more of a direct nexus to public health than patents. Or perhaps, not so surprising at all, given that drug regulation is one area, where MNCs and generics cosy up to each other. After all, as Chanakya rightly suggests, the enemy of an enemy is a friend (the enemy here being stringent drug regulatory norms, and perhaps price control as well). While patent issues routinely pit MNC’s against generics, drug regulation is less contested between these two behemoths, barring special cases such as the one we bring you below.
This case study is part of a new initiative by SpicyIP to throw more light on India’s drug regulatory framework. In particular, we intend investigating cases that raise serious issues about drug regulation. As always, an advocacy for greater “transparency” will be a large part of this campaign…and as the Learned Judge Brandeis one remarked: Sunshine is the best disinfectant! From a policy perspective, we intend to use these case studies to advocate for effective reform in the drug regulatory space. We sincerely hope that many of our readers will join us in this campaign. We also encourage those of you with inside knowledge to share leads with us, so that we can investigate further. We promise to respect your anonymity.
The Curious Case of Albupax
Our first case study revolves around Albupax, a biosimilar for treating breast cancer, manufactured by NATCO. About 4 years ago, mainstream media carried several stories about how Abraxis, the US company which manufactured the originator drug – Abraxane, complained to the DCGI about serious safety and efficacy problems with NATCO’s Albupax. Here are links to some of the stories: ToIET and Mint. It should also be mentioned that Natco had also won a pre-grant opposition against Abraxane and the same is under appeal before the IPAB.
 The DCGI investigated the issue and tested the samples more than once at CDL (Central Drug Laboratory), Kolkata. Upon finding that the Albupax samples contained excessively high amounts of endotoxins and chloroform, the DCGI suspended NATCO’s manufacturing licence. The DCGI also gave the green signal to the CDSCO (Central Drugs Standard Control Organisation) for initiating criminal proceedings against NATCO for these lethal lapses in drug safety.  For those not in in the know, the CDSCO is a curious organsiation born after recommendations in the Mashelkar committee report, but without any specific statutory basis or parentage. For the moment, suffice it to note that it is an organisation that largely oversees drug regulation and works out more specific norms that could help the DCGI who plays a more direct role in the drug approval process.
Not too surprisingly, Natco appealed the DCGI decision to the Health Minister, Ghulam Nabi Azad. In less than 45 days, the Ministry over-ruled the DCGI’s expert opinion by issuing an interim stay and permitting Natco to market the drug. The entire case is shocking to say the least, because a politician has effectively overturned the reasoned decision of the DCGI, a technical expert to suspend the manufacturing license for a potentially dangerous drug, on what would appear to be flimsy procedural infirmities. What is most surprising is that despite the efflux of 3 years from the date that the Minister gave them a clean chit, Natco has refused to introduce the drug in the market? Why so?
Strangely, mainstream media reported this issue only in bits and pieces and never investigated the issue thoroughly, missing several key aspects, including the investigation of Natco’s manufacturing plant by the CDSCO.
We managed to unearth this murky case history in full, thanks to the power of the RTI.  We’ve narrated this sordid tale in a rather comprehensive report that can be accessed overhere, along with links to all relevant case files and reports. We would urge you to wade through this story in full and appreciate for yourself how serious (or otherwise) the government is about drug regulation and protecting public health.
For those in a rush, here are some salient points that we wish you to mull over.
The Role of Vimta Laboratories?
The CDL tests found that Natco’s product contained high levels of endotoxin and was therefore unsafe. Upon Natco’s insistence CDL tests again and comes up with the same finding. Natco then gets the same samples tested by a certain “Vimta Laboratories”. Not too surprisingly, Vimta finds that Natco’s drug is perfectly safe. Interesting thing about Vimta, is that its name pops up even in the Ranbaxy scandal. Katherine Eban’s, now famous ‘Dirty Medicine’ article in CNN, mentions Vimta Labs’ role as below:
“Back in his office, Kumar handed him a letter from the World Health Organization. It summarized the results of an inspection that WHO had done at Vimta Laboratories, an Indian company that Ranbaxy hired to administer clinical tests of its AIDS medicine. The inspection had focused on anti-retroviral (ARV) drugs that Ranbaxy was selling to the South African government to save the lives of its AIDS-ravaged population. As Thakur read, his jaw dropped. The WHO had uncovered what seemed to the two men to be astonishing fraud. The Vimta tests appeared to be fabricated. Test results from separate patients, which normally would have differed from one another, were identical, as if xeroxed.”
NATCO Appeal:
Based on the CDL tests (done more than once at Natcos insistence), the DCGI suspends Natco’s manufacturing licence and gives the A.P. CDSCO the green light to prosecute Natco. Natco then appeals to the the Health Minister Ghulam Nabi Azad who immediately issues a temporary stay of the DCGI’s order on the grounds of alleged procedural irregularities i.e. that NATCO was not given a chance to be heard and also because questions were raised at the authenticity of CDL tests. He also recommends that new samples be tested. The stay was to operate until the appeal was decided.
It is surprising that the Health Minister thought it necessary to even issue a temporary stay, despite the severity of the allegations against NATCO. Why not wait until the samples could be retested – what was the hurry to allow NATCO to re-enter the market? Even more surprising, is NATCO’s ‘thank you’ letter to the DCGI for “revoking the suspension order” and announcing its intention to release the product into the market by March 2010. It is still a mystery as to how the CEO of NATCO interpreted a ‘stay’ as a final disposal instead of a temporary measure pending disposal of the appeal. You can read their letter over here.
In order to decide the final appeal, the Under-Secretary to the Health Ministry wrote to several medical experts to get a better understanding of the issues at hand. One such opinion from an AIIMS doctor clearly warned the Government on the dangers of high endotoxin levels stating that it could cause even death! It can be accessed over here.
At the same time, the Health Ministry also asked the DCGI/CDSCO and the CDL to submit a report on why NATCO was not given a chance to respond before its licence was suspended.
(i) The CDL Response: In a strongly worded response, the Director of the CDL informed the Health Ministry that the lab stood by its tests on NATCO’s product and submitted a unanimous report signed by senior scientists at CDL. This letter can be accessed over here.
(ii) The DCGI Response: In its long reply to the Ministry, dated 6th January, 2010 and signed by all its members, the CDSCO/DCGI refuted all allegations made by NATCO and informed the Ministry that NATCO was given an opportunity to present its defence at every stage of the process and that the company had simply failed to give any cogent reason for its samples failing the endotoxin test multiple times.
The reply also makes it a point to refer to the inspection report of NATCO’s facilities and it informs the Ministry that NATCO was in “gross non-compliance” of GMPs standards. Apparently, according to guidelines (Guidelines for taking action on samples of Drugs declared spurious or Not of Standard Quality) laid down by the Drugs Consultative Committee, a statutory body under the D&C Act, NATCO’s product would have to be classified as a “Grossly sub-standard drug” and as per these guidelines a prosecution had to be launched in such cases.  The entire DCGI/CDSCO reply can be accessed over here.
The final order: Given that both the DCGI and the CDL defended their orders/tests vigorously and also made clear that NATCO was given an opportunity to present its case, one wonders as to how the Helath Minister could have brazenly overturned the DCGI order of suspending Natco’s licence. Particularly since the drug in question is a very important cancer drug, and any potential toxicity could cause severe health issues including death.
Regardless of the strong defence by the DCGI and CDL, the Health Ministry over-ruled the regulators on the ground that both the initial round and secondary round of testing took place at the same laboratory – CDL, Kolkata; instead of testing the samples at two different laboratories. This is a strange line of reasoning, to put it mildly. The CDL tests were conducted more than once, at Natco’s behest. It is ridiculous to insist on some kind of an alleged “appellate” level testing, when the statutory framework does not provide for such mechanism.  In fact, Sections 25(3) and (4) of the Drugs and Cosmetics Act, 1945 provides for such an appellate framework only in cases where the matter is before a court of law. And even in those cases, it clearly provides that when the first test is done at a Central level lab like CDL, then there is no need to retest at any other lab. The Central lab report would be treated as “final” and there is no need for an “appellate” testing!
It also bears noting that there is no evidence on record that the CDL tests were inherently flawed (in legal parlance, there was no gross error on the face of the record to warrant suspicion). As the CDSCO response more than amply demonstrates, the testing kits and other modes of measurement were in line with the prescribed standards.
The aftermath: Eventually, Natco’s product cleared a third round of testing at CDL. The CDL test reports dated January, 2011 can be accessed over here. After this clean chit from the CDL, the A.P. Office of the CDSCO sought to drop the prosecution against Natco and the Health Ministry gave the decision its stamp of approval. The relevant correspondence can be accessed over here. Thus ended Natco’s legal woes.
Unanswered Questions: Will the Truth Out Itself?
This controversy raises several unanswered questions:
1. Firstly, despite a clean chit by the Health Minister in 2010, why has Natco chosen to keep the drug away from the market? Is this indicative of the fact that Natco is wary of not being able to comply with safety standards? Is this fear of releasing new batches an alleged admission that the earlier batches of Albupax were not “safe”? Or does this have to do with other business considerations? Natco’s representatives have told Mint’s C.H. Unni, in an article published in today’s Mint, available over here, that they did not release their version of the drug because of market conditions, which now has three generic players for the very same drug. Natco has claimed that all regulatory issues have been resolved.
Please do read Unni’s article where he questions Natco on why it has dropped its plans to launch Albupax despite winning a patent dispute against Abraxis and getting a clean chit from the government on the regulatory front.
2. Secondly, in Abraxis’s complaint, it listed not 1 but 5 serious defects in Natco’s product. We’ve outlined all 5 defects above – why is it that the DCGI and CDL analysed only endotoxin levels without examining any of the other issues raised by Abraxis. What about the elevated Chloroform levels, deficiency in Albumin levels etc. Why didn’t the DCGI look into any of these issues? The CDL claims that it does not have “recommended instrumental facility” to test for chloroform? Given that this is the premier testing lab, does not cast serious doubts on the infrastructural readiness of India to enable safe drugs in the market for its citizens?
3. Thirdly, how could the Health Ministry (and the Minister directly at that) contravene the statute so blatantly and overrule a decision of the regulator? Especially when the drug is a cancer drug and the biosimlar version allegedly contains high level of toxicities.
4. And lastly, the larger question is how and why the DCGI failed to detect these defects before the complaint from Abraxis? Should there not be effective post marketing surveillance and a push to mandatory comply with this requirement? Further, if this is a new drug, how was NATCO given permission to market in 2008, barely a year after the innovator company was granted permission? And on what basis was the biosimilar approved? What were the norms then? Did the DCGI merely look at bio-equivalence or did it insist on something more, as it is commonly acknowledged that mere bio-equivalence confirmation does not work for biosimilars in order to guarantee their safety and efficacy.
If the truth is out there, one hopes that it will certainly out in the days to come. If not, this will be yet another sad burial, as have most other drug regulatory lapses in the past.
This case study highlights the cavalier manner in which the government deals with drug regulation. In any other jurisdiction, it would be unthinkable for a politician to overrule a reasoned decision of the regulator in blatant violation of the statutory framework.
The governments’ message to drug companies seems to be thus: we’re perfectly okay if you play around with public health by releasing highly toxic drugs in the market. We’ll simply ask you to recall existing batches. You can then manufacture fresh batches without the toxic impurity and release them on the market, and we’ll forget it ever happened. No liability will ever attach to you despite the fact that your drug cost the lives of Indian citizens!
Fear of Free Speech
In the interests of full disclosure, it must be stated that Shamnad was sued for defamation by NATCO in the past for pointing out that Natco lied to a court of law in the famous Dasatinib case. For those interested, here is a Legally India article that links to the pleadings including Shamnad’s defence to this high handed corporate bullying. Given Natco’s intolerance to free speech, one might expect them to hit us with another SLAPP suit  here as well. Only time will tell!

By Prashant Reddy, Shamnad Basheer and Sai Vinod
Prashant Reddy

Prashant Reddy

T. Prashant Reddy graduated from the National Law School of India University, Bangalore, with a B.A.LLB (Hons.) degree in 2008. He later graduated with a LLM degree (Law, Science & Technology) from the Stanford Law School in 2013. Prashant has worked with law firms in Delhi and in academia in India and Singapore. He is also co-author of the book Create, Copy, Disrupt: India's Intellectual Property Dilemmas (OUP).

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