home *** CD-ROM | disk | FTP | other *** search
- <text id=89TT2213>
- <link 89TT2346>
- <title>
- Aug. 28, 1989: A Prescription For Scandal
- </title>
- <history>
- TIME--The Weekly Newsmagazine--1989
- Aug. 28, 1989 World War II:50th Anniversary
- </history>
- <article>
- <source>Time Magazine</source>
- <hdr>
- BUSINESS, Page 56
- A Prescription for Scandal
- </hdr><body>
- <p>Payoffs and faked lab results taint the generic-drug industry
- </p>
- <p> For many consumers, generic drugs have been a welcome
- remedy for sticker shock at the pharmacy counter. Designed to
- work as effectively as their brand-name counterparts, generics
- often sell for half the price. Since 1984, when Congress sought
- to make generics more readily available by speeding up the
- Government-approval process, competition has skyrocketed -- and
- so has the opportunity for abuse. Now a yearlong investigation
- by the Justice Department and the Food and Drug Administration
- is uncovering evidence that some makers of generic
- pharmaceuticals falsified laboratory test results and paid off
- FDA chemists to gain quick Government approval for their
- products. While no drugs have been found so far to be harmful
- or ineffective, the fraud is shaking the reputation of the $7
- billion generic-drug industry.
- </p>
- <p> Hastening to restore confidence in its imprimatur, the FDA
- last week launched a crash program to re-evaluate 30 of the
- most commonly prescribed generic medications, including such
- prevalent antibiotics as ampicillin and oral penicillin. Over
- the next six weeks, the agency will test more than 1,000 samples
- to make sure they are biologically equivalent to their
- brand-name counterparts. In addition, the FDA, which had cut
- back its commercial inspections because of budget restraints,
- announced that it will hire more field inspectors and seek
- tougher punishments for unscrupulous manufacturers.
- </p>
- <p> Compared with an original, patented drug, a generic is much
- less expensive to develop. After the patent on a brand-name
- product has expired, usually involving a period of 17 years, a
- pharmaceutical company simply replicates the original drug's
- components. But in a two-year study released earlier this
- month, the American Academy of Family Physicians found that many
- generics are not as potent as their originals. Reason: unless
- certain production tricks are used, it is often difficult to
- produce a formulation that will work as well in the body as the
- brand-name drug. In its approval process, the FDA relies on a
- generic-drug manufacturer's in-house lab tests to establish a
- product's effectiveness. But the temptation for the manufacturer
- to cut corners can be strong, since the first companies to gain
- approval are likely to carve out the largest market shares.
- </p>
- <p> The current scandal started to unravel after Roy McKnight,
- head of Pittsburgh-based Mylan Laboratories, began to suspect
- the FDA of favoritism. Frustrated that a rival firm consistently
- won FDA approval for its products before his company did,
- McKnight hired private detectives to spy on the Government. The
- detectives' snooping produced enough evidence of corruption to
- encourage the Justice Department to initiate a probe. In July,
- Charles Chang, 47, former head of the FDA's generic-drug
- division, and two co-workers pleaded guilty to accepting a total
- of $24,300 in illegal gifts in exchange for preferential
- treatment. The favored firms: American Therapeutic Inc.,
- Bohemia, N.Y.; Par Pharmaceutical, Spring Valley, N.Y.; and
- Par's subsidiary Quad Pharmaceuticals of Indianapolis. American
- Therapeutic has not been charged so far and denies any
- wrongdoing.
- </p>
- <p> As the FDA pursued its own probe, it discovered that
- Vitarine Pharmaceuticals of New York City had taken a more
- drastic step to ensure approval of its generic version of
- Dyazide, a standard antihypertension drug developed by
- SmithKline. The generic-drug company substituted Dyazide for its
- own capsules and sailed right through the efficacy tests.
- Vitarine admitted the deception earlier this month and has
- recalled the product.
- </p>
- <p> Even if the misdeeds are limited to a few unscrupulous
- firms and some greedy bureaucrats, the entire generic-drug
- industry is likely to suffer. Generic products are so anonymous,
- says Dee Fensterer, president of the Generic Pharmaceutical
- Industry Association, that "when one company has a problem with
- one drug, it is jumped on as a problem of all generic drugs."
- </p>
-
- </body></article>
- </text>
-
-