Plan to slash U.S. drug costs leans on troubled factories

A challenge to high drug prices


Worlkers check packaging of medicine tablets made at Dr. Reddy’s factory in Bachupally, India, in 2006. (MUST CREDIT: Amit Bhargava/Bloomberg)
Bloomberg Worlkers check packaging of medicine tablets made at Dr. Reddy’s factory in Bachupally, India, in 2006. (MUST CREDIT: Amit Bhargava/Bloomberg)

As U.S. regulators push hundreds of new generic drugs to market in an effort to drive down prices, the industry is facing a continuing problem in India, where many copycat medicines are manufactured.

The Food and Drug Administration approved a record 763 generic drugs in the year ending in September 2017. It expects to sign off on even more rivals for branded drugs in 2018.

FDA Commissioner Scott Gottlieb has vowed to tackle a lack of competition he has said is “a root cause of high drug prices.”

But getting more low-cost medicines to pharmacy shelves could strain a global supply chain already confronting questions about quality and safety — especially in India, where about 40 percent of generic drugs taken by Americans are made.

The FDA’s efforts to police Indian drug plants have been hampered by staffing shortages as well as aggressive tactics by drug-company employees to cover up potential problems.

FDA reports show some workers in India destroyed records to keep regulators in the dark about production issues.

Those oversight gaps could widen as the FDA tries to create a deeper market and companies seek to preserve their profits.


“We’ve increased our focus on data-integrity issues. The fact that we’re unearthing more data-integrity issues, it means there were problems that were systemic and the FDA is starting to crack down,” said Gottlieb in an interview.

FDA inspection reports from India read like mystery novels full of deleted data, shredded documents and evasive employees. Intrigue surrounds tests designed to ensure that generic drugs are free of contaminants, properly formulated, and work like the products they mimic.

When those tests fail, evidence has often vanished or been conveniently invalidated, agency records show.

In a March 2017 visit to a Dr. Reddy’s Laboratories plant in Andhra Pradesh, a state bordering India’s southeastern coast, two FDA inspectors caught lab employees deleting computer files and lists of recent documents to avoid detection.

Company officials initially denied that workers destroyed the data but capitulated when pressed by inspectors.

The facility continues to manufacture drugs for the U.S. market. The FDA typically gives companies time to fix issues uncovered during an inspection before banning products from the United States.



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