GPIA CITES 62 CASES OF BRANDNAME FIRM FRAUD

Executive Summary

GPIA CITES 62 CASES OF BRANDNAME FIRM FRAUD in a report submitted July 16 to House Energy & Commerce/Health Subcommittee Chairman Waxman (D-Calif.). The Generic Pharmaceutical Industry Association submitted the 30-page report in response to requests made at a June 28 hearing on the FDA generic drug enforcement bill (HR 4810). Generic industry witnesses were asked to supply evidence that the brandname drug industry has been guilty of the same kind of wrongdoing that was perpetrated by members of the generic industry and has led to Rep. Dingell's (D-Mich.) generic-specific enforcement legislation. In a cover letter, GPIA President Dee Fensterer said the report responds to "repeated requests from members of the subcommittee" during the hearing "for evidence of wrongdoing in the brandname pharmaceutical industry" ("The Pink Sheet" July 2, p. 3). The report contains, she noted, 62 cases surveyed from "publicly available literature." The cases include "fraudulent or deceptive practices by researchers or executives of 19 U.S. brandname companies," the letter states. They also include "two Veterans Administration investigations of illegal gratuities, grants, honoraria and direct funding paid to more than 1,000 V-A employees by six brandname drug companies between 1979 and 1985." The report also cites cases involving Robins' Dalkon Shield, Hoechst-Roussel's Merital, Johnson & Johnson's Suprol and Zomax, Lilly's Oraflex, Pfizer's Feldene and Bjork-Shiley heart valve, Searle's Copper-7 intrauterine device and NutraSweet artificial sweetener and SmithKline's Selacryn. "Unlike the wrongdoing in the generic pharmaceutical industry, these documented abuses by brandname companies have resulted in nearly 1,500 deaths and tens of thousands of patient injuries," Fensterer wrote. The letter also addresses several other questions raised at the subcommittee hearing. As to the size of the generic drug industry, Fensterer said 1989 sales totaled $6.8 bil., with 60% represented by brandname manufacturers that sell generics. Sales by generic houses "are estimated at $2.7 bil., with GPIA member companies accounting for about one-third of those," Fensterer said. She added that generic companies charged with fraud represent "5% of the commodity generic market." Referring to a Schein internal memorandum by company exec William Haddad that was entered as an exhibit at the hearing, Fensterer asserted that, after reviewing the memo, "it is my personal view that the author of the memo received no proprietary information from the FDA." Dingell contended that his bill should open ANDA information to public scrutiny and charged the memo demonstrates that a limited number of favored industry officials currently can obtain such confidential information. Noting that the memo indicates that Haddad knew "an unnamed company had filed a generic Dyazide application," Fensterer maintained: "There is no indication this information was provided by any FDA employee." The letter adds that "there was much speculation on Wall Street about a future competitive product" at the time of the memo, Nov. 5, 1986. It is believed in the industry that an ANDA for a generic form of Dyazide currently is pending at FDA.