In the fall of 2012, a young consumer safety officer at the Food and Drug Administration volunteered for a job that few of his colleagues wanted: inspecting the Indian manufacturing plants that make many of America’s low-cost generic drugs.
In a world of drab auditors, Peter Baker stood apart. He rode a motorcycle and had tattoos lining one arm. Beyond his love of adventure, Mr. Baker, then 32, had a more pragmatic reason to volunteer. By reputation, India was the world leader in aseptic manufacturing, the exacting science of producing sterile drugs. He figured that after reviewing best practices there, he’d return to the United States with expert knowledge that would advance his career.
America needs generic drugs. They make up 90 percent of the American drug supply. Without them, every large-scale government health program — the Affordable Care Act, Medicare Part D, the Veterans Health Administration, charitable programs for the developing world — would be unaffordable.
But what Mr. Baker uncovered in six years of doing foreign inspections exposed the dangerous compromises behind the production of generic drugs, and the F.D.A.’s limits as a global regulatory agency.
Six months into his stint, Mr. Baker visited a plant in Aurangabad run by the Indian company Wockhardt, which made about 110 generic-drug products for the American market. He had one week at the plant to ensure that it complied with the F.D.A. regulations known as “current good manufacturing practices.” Generating and preserving data at each manufacturing step is crucial to those regulations.
On his second day at the Wockhardt plant, Mr. Baker and a colleague caught an employee trying to smuggle out a garbage bag of documents. The documents led Mr. Baker to discover that the plant had knowingly released into Indian and other foreign markets vials of insulin containing metallic fragments. These had apparently come from a defective sterilizing machine. He learned that the company had been using the same defective equipment to make a sterile injectable cardiac drug for the American market. The willful deception there and at other plants so shocked him that he overhauled his inspection methods, with significant results.
Two months after Mr. Baker’s Wockhardt inspection, the F.D.A. banned the import of drugs from that plant into the United States, a potential $100 million loss in sales for the company. Company officials declined to comment on the fallout from the inspection.
Mr. Baker kept digging. Over the next five years, first in India and then in China, he uncovered fraud or deceptive practices in almost four-fifths of the drug plants he inspected. Some of the plants used hidden laboratories, secretly repeated tests and altered results to produce fake data that fundamentally misrepresented drug quality, then submitted that data to regulators.
In some instances, deceptions and other practices have contributed to generic drugs with toxic impurities, unapproved ingredients and dangerous particulates reaching American patients. Some doctors have struggled to stabilize patients who became sicker after they were switched from a brand-name to a generic, or between generic versions. A low-cost drug is not a bargain if it doesn’t work.
The F.D.A. declares that “Americans can be confident in the quality of the products the F.D.A. approves.” Because of that reassurance, even savvy consumers — the sorts of people who are well versed in the quality distinctions between Velveeta and artisanal Cheddar — don’t think about how and where their drugs are made when they head to a pharmacy. Their only question usually is: Can they afford, or will their insurance cover, the drug being dispensed?
The F.D.A., which approved more than 1,000 new generic drug products last year, faces a vast challenge in safeguarding these medications. Nearly forty percent of all our generic drugs are made in India. Eighty percent of active ingredients for both our brand and generic drugs come from abroad, the majority from India and China. America makes almost none of its own antibiotics anymore.
Of course, overseas manufacturing can work perfectly well and the F.D.A. contends that it has a reliable review system for all approved drugs. “The F.D.A. inspects all brand-name and generic manufacturing facilities around the world which manufacture product for the U.S. market to confirm they meet F.D.A.’s requirements for manufacturing process,” it said recently.
My reporting on the generic drug industry over the last decade led me to four continents, and into the overseas plants where America’s generic drugs are made. Interviews with more than 240 people, including numerous whistle-blowers, helped expose what was going on behind the boardroom doors at generic-drug companies. Some companies have encouraged data fraud as the most profitable path to securing approvals from regulators, and have used deceit to hold the F.D.A.’s investigators at bay.
In the United States, F.D.A. investigators typically show up unannounced to inspect plants. But overseas, the F.D.A. has opted to announce the vast majority of its foreign inspections in advance. Overseas plants even “invite” the F.D.A. to inspect; the investigators then become the company’s guests and agree on an inspection date in advance. Plant officials have served as hosts and helped to arrange local travel.
The F.D.A. has defended this system as the best way to ease the complex logistics of getting visas and ensuring access to the plants. But the resulting inspections are largely “staged,” say a number of F.D.A. staff members. With advance notice and low-cost labor, the plants can make anything look like anything. “You give them a weekend, they’ll put up a building,” as one F.D.A. investigator put it.
Mr. Baker, the young inspector, pulled back the curtain on these staged visits. He rejected guided tours. Instead, he would arrive at a plant and head to the quality control laboratory, where employees typically audit test results coming in from the factory floor. There, he would get into the computer system and sift through the data himself.
As Mr. Baker followed clues, he unearthed devious practices at what seemed like transparently run plants. Technicians used initial hidden tests to get preliminary results, which then guided them as they tinkered with the test settings. Then they retested in the plant’s official system to get the desired results showing that the drugs fell within specifications. Those drugs with altered test results could then be released to patients.
During his 27 months in India, of the 38 drug plants he inspected, Mr. Baker found fraudulent or deceptive data in 29 of them. As he worked, other investigators learned from his techniques. The difference was stunning, one F.D.A. employee recalled. “Like you walk into a dark room and suddenly someone just turns on the light,” the employee said. “It was shocking.”
And there was an additional negative consequence to the F.D.A.’s system of advanced notice. With the companies serving as travel agents, F.D.A. investigators spoke of inappropriate perks: hotel upgrades, for which the investigators would never see a bill; golf outings, massages, and trips to the Taj Mahal. The result was what some F.D.A. employees referred to as “regulatory tourism.” The F.D.A. said in response that “any allegations of improper conduct by F.D.A. personnel are investigated.”
A new head of the F.D.A.’s India office, Altaf Lal, arrived in mid-2013. To tame the twin problems of company fraud and compromised investigators, Mr. Lal made a novel pitch to agency officials. He proposed a pilot program to make all inspections in India either on short notice or unannounced. By December 2013, he had a green light. The results were instantaneous.
In January 2014, the F.D.A. was planning an unannounced inspection at a plant in northern India on a Monday. Fearing that plant officials had heard they were coming, Mr. Baker and his colleague went a day early, unannounced. They proceeded to the quality control laboratory, expecting it to be quiet on Sunday morning. Instead, they were stunned to see a hive of activity. Dozens of workers hunched over documents, backdating them. On one desk, Mr. Baker found a notebook listing the documents the workers needed to fabricate in anticipation of the inspectors’ arrival. There were Post-it notes stuck to some surfaces, noting what data to change.
In large swaths of India’s generic drug industry, the pilot program uncovered a long-running machinery dedicated not to producing perfect drugs but to producing perfect data. At one plant, Mr. Baker went straight to the microbiology laboratory and found the paperwork for testing the sterility of the plant in perfect order: microbial limits testing, biological indicators, all the samples with perfect results. Yet most of the samples didn’t exist. The plant was testing almost nothing. The laboratory was a fake.
At the vast majority of the unannounced inspections, the investigators found things the plants no longer had time to fix: Infestations of birds and insects. A pile of critical manufacturing records, tossed in a trash bin. An employee bathroom near a sterile manufacturing area in one plant lacked drainage piping, so urine puddled directly onto the floor.
Under the pilot program, the rate of inspections resulting in the F.D.A.’s most serious finding, “official action indicated,” increased by almost 60 percent, according to my own analysis of F.D.A. records. Before long, drugs from numerous plants in India had been banned from the United States market. Given these results, it seemed logical for the F.D.A. to make unannounced inspections or short notice the norm around the world. But in July 2015, F.D.A. officials decided to terminate the program and return to largely pre-announced inspections in India. When asked why, the agency declined to explain its reasoning and stated that “after evaluation of the pilot a decision was made to discontinue the pilot.”
More recently, an F.D.A. spokeswoman said that the agency has conducted “a number of unannounced inspections at foreign manufacturing facilities, ”when it has information from a whistle-blower or is investigating a drug safety issue. The F.D.A. asserts that its import alerts, which can stop substandard drugs from entering the country, are an “effective tool” for protecting patients.
But from 2013 to 2018, according to records I have obtained, F.D.A. officials downgraded the regulatory sanctions against more than 100 Indian plants, changing the designation of “official action indicated” to “voluntary action indicated.” This allowed drugs from those plants to continue to reach patients in the United States.
Most Americans agree that our drug supply is in crisis. But the crisis they point to is that of cost: brand-name drugs that are unaffordable, because of corporate greed, and a labyrinth of deals between drug makers, drugstore chains and insurance companies. One response has been to push for more, cheaper generics made available as quickly as possible. But that solution has come with a quality crisis that has been largely invisible to American consumers.
Our drug supply needs one system of regulation that prioritizes both low cost and high quality: an unannounced inspection at every plant that makes drugs for the United States market. Companies or countries that refuse to comply should not be allowed to sell to American consumers. Those consumers deserve to know where their medicines are made, information they get on their cereal boxes and shirt labels. “Made in America” on a pill bottle label could have a strong market effect, helping to draw drug manufacturing back to the United States, where it can be more effectively policed.
In February 2015, Peter Baker moved to China, where he found similar data fraud and deception in 38 of the 48 drug plants he inspected. He left the agency this March. Shaken by what he uncovered in his work for the F.D.A., he told a colleague that if people knew how some of those drugs were manufactured overseas “then no one would take them.”
Katherine Eban is the author of the forthcoming “Bottle of Lies: The Inside Story of the Generic Drug Boom,” from which this essay is adapted.