How Good Are Your Drugs? (Part 4) - Page 2

Because they are often less expensive than competing generic versions, the big three drug wholesalers and many pharmacies and mail order pharmacy benefits managers (PBMs) continue to distribute, purchase, authorize, bill, and sometimes dispense Ranbaxy generic drugs.

Despite reports of generic drug discrepancies, other Indian generic drug companies such as Indian subcontractor Lupin appear to remain largely under the radar screens of state and federal entities.

Wockhardt
In the case of Indian generic drug manufacturer Wockhardt, review of the FDA’s February 2006 warning letter to the company indicate that Wockhardt has a history of record keeping and documentation issues:

Complete, true and accurate records are the foundation for good manufacturing practices (GMP). Reliable documentation is a control which raises assurance of the quality of the product manufactured. Violations concerning inadequate documentation are serious and should be handled as such.We are also concerned that the two previous inspections also noted failure to maintain complete and accurate records, and that your firm may not have taken this type of discrepancy seriously and thus has not corrected the documentation practices of your employees. In addition, during a regulatory meeting with your firm on May 7, 2004, management indicated to us that inappropriate documentation practices have occurred at your facility. Practices such as back dating and signing for actions not performed are serious violations.”

Traditionally, the burden of proof that a prescription drug is FDA approved and legal at time of dispense and administration has been on those who profit from the manufacture, distribution, authorization and dispense of prescription drugs. Increasingly, the burden of proof appears to be shifting from those who profit to those who pay the bills.

A 2001 Lancet article reveals that, according to the WHO, India produces as much as 35% of the counterfeit and substandard drugs in the world. In addition, a recent series of Business Week articles exposes systemic infrastructure gaps in India’s water and distribution systems that likely increase prescription drug adulteration and tampering.

FDA Oversight
The FDA has many issues concerning oversight of the manufacture of pharmaceuticals within the borders of the United States:

1. Manpower – As with many governmental agencies, there are not enough inspectors to oversee the process and identify issues.
2. The Regulatory Process – When a pharmaceutical manufacturer is warned, there is an appeals process that gives the manufacturer an opportunity to respond. A company can also file for injunctive relief. During this process, the manufacture of the compounds continues.
3. FDA Funding – It is estimated that 40% of the FDA’s operating budget comes from the sale and licensing of rights to pharmaceuticals, so the agency’s funding is largely dependent on the industry it is charged with regulating, leading to complex and shifting priorities within the FDA.
4. State Pharmacy Boards – Most state pharmacy boards are under-funded and lack resources and jurisdiction to adequetely oversee the three big drug wholesalers, large chain pharmacies and PBMs. Oftentimes, state pharmacy boards include representatives from these companies.

Article Author: Rick Vassar

Rick Vassar CPCU, ARM, AIS, ARM-P is a career commercial risk manager and the author of Hide! Here Comes the Insurance Guy, where he uses humor to explain insurance strategies in language everyone can understand.
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