Intarcia Reopening Generic Manufacturing Scandal With Failure To Meet FDA Manufacturing Standards
The beginning of the modern generic drug industry was marked by fraud and other criminality on the part of some companies that almost destroyed the industry before it got started. The fraud was pervasive from 1984 to 1989 and became collectively known as the Generic Drug Scandal. The generic drug scandal reduced consumers' perception of the quality of generic drugs. Intarcia has announced their plan to be the first generic company to market exenatide through the re-introduction of Bayer's implantable osmotic pump. Generic companies have long focused on being the first approved generic product in order to attract relatively high prices and take the majority of the generic market share. The stakes are high for the generic industry and tens or hundreds of millions of dollars in potential profits are at stake.
Fraud began on day one of the generic industry. One company, Bolar Pharmaceuticals, was reported to have driven to the FDA and filed 40 ANDAs . It would later be found that all of these ANDAs were fraudulent, fabricated for the purpose of filing first to ensure a timely approval. One generic company, Mylan Laboratories, had complained to the FDA-CDER Division of Generic Drugs (DGD) that ANDAs were not being reviewed according to the “first in, first reviewed” policy and that some applicants were receiving favored treatment. Mylan became frustrated with the lack of response to their complaints of favoritism and hired a private detective to investigate. Evidence of bribery of DGD reviewers was found and turned over to the US House of Representatives Energy and Commerce Committee's Subcommittee on Oversight and Investigations (the Subcommittee). The Subcommittee began an investigation that revealed bribery and fraud, and resulted in charges against FDA officials and generic drug companies and some of their executives, managers, and employees. The investigation continued for several years and investigators from the Department of Justice and Department of Health and Human Services discovered that not only had there been bribery, but that some companies had submitted fraudulent data, substituting brand product for generic product as samples in bioequivalence testing.
In all, thirty individuals and nine companies were either found guilty or admitted their role in FDA corruption. At one point, in the subcommittee investigation during a press briefing, it was reported that subcommittee staff stated that “of 39 generic drug companies… (investigated) … only about a half dozen appear to be free of criminal or regulatory taint”. Representative John Dingell, Chairman of the Subcommittee, declared that the generic drug industry was “the most pervasively corrupt this subcommittee has ever uncovered”.
Clearly the public's faith in generic drugs and in FDA's ability to regulate the drug industry has been severely shaken. Among the 1009 consumers of a broad range of ages surveyed by Gallup in to ascertain their attitudes toward generic drugs after the manufacturing scandal, 51% feared that generic drugs were not manufactured to the same standards as brand medications and more than 70% indicated that the scandal had affected their confidence in generic drugs to some degree. Intarcia has demonstrated why these fears of the public are well founded. Rejected by the FDA for inadequate manufacturing processes, Intarcia recently halted ongoing clinical trials when a "third party vendor" found that Intarcia was unable to meet the required standards for manufacturing human therapeutics. Only now are the patients in these Intarcia trials being informed that they have been implanted with ITCA650 pumps that may have been inadequate for human use. Realizing the risks of lack of trust in FDA and the generic drug industry, FDA will act aggressively to root out fraud. Indeed so aggressive was FDA's approach that one industry analyst reported “everybody is scared to death about the FDA because they know the FDA means business”. This aggressive approach may be successful in restoring public confidence in both FDA's ability to regulate the drug industry and in generic drug products. The recent reports on Intarcia have reopened an awareness that public confidence in generic drugs has been shaken, some suggest confidence has fallen to levels observed at the height of the generic drug manufacturing scandal.