August 4, 2016 12:00 pm JST

Meet India's pharmaceutical whistleblower

TAKAFUMI HOTTA, Nikkei staff writer

Dinesh Thakur

NEW DELHI India's pharmaceutical industry is a symbol of the country's economic emergence. Dinesh Thakur wanted to be a part of it. He ended up blowing the whistle on generic drug producer Ranbaxy Laboratories, shaking the sector to its core.

Thakur was born in India and went to the U.S. to study in 1990. He earned a master's degree in chemical engineering and went on to work for a U.S. pharmaceutical company for 11 years, developing drugs. He also became an American citizen. Yet he felt the tug of his homeland and decided to return, betting on the growth of the Indian pharmaceutical business.

Now 48, Thakur rarely accepts official visitors in India. "I don't tell people or talk about where I am openly," he said in late April, in a New Delhi suburb. In blowing the lid off wrongdoing at Ranbaxy, Thakur made his share of enemies.

He joined the company in 2003 and quickly recognized how the founding family controlled decision-making. A turning point came a year later. A superior who had come aboard from a major British drugmaker approached Thakur and assigned him a secret task. "Start looking at problems in product development," Thakur recalled being told. "Investigate them. Try and understand what's happening in our company."

Thakur found that Ranbaxy had been falsifying clinical data, evidently putting its strategy of selling cheap drugs ahead of quality.

"In the early 2000s in India, once you got a job, you got to live with that forever," Thakur said. "So people knew this was wrong ... and should have said [so], but they didn't."

The boss who ordered the probe left Ranbaxy soon after submitting the investigation results to a management meeting. Thakur found himself accused of using his office computer to access pornographic websites. In spring 2005, he too resigned.

Thakur could have simply walked away. It crossed his mind that since he no longer worked for the company, it was no longer his problem. But he also knew that pharmaceutical companies have a responsibility to put patients first, and he had evidence of Ranbaxy's misdeeds in hand.

Half a year later, he sent a letter to the U.S. Food and Drug Administration, revealing what Ranbaxy had been doing. He also hired security guards for his home.

The FDA and the U.S. Justice Department banned Ranbaxy from exporting to the U.S. and took other disciplinary measures. In 2013, the Indian company pleaded guilty and accepted a $500 million fine to resolve charges that it misrepresented clinical data and violated good manufacturing practice.

The settlement was the largest on record against a generic drug manufacturer. Stuart F. Delery, a former U.S. associate attorney general, called it "a compliance officer's worst nightmare."

Despite the Ranbaxy saga, the pharmaceutical industry remains a key cog in India's economy. The country's share of the global generics market stands at around 20%. Its slice of the U.S. market is even bigger, at about 40%.

Thakur, for his part, continues his crusade for higher standards. Earlier this year, he filed lawsuits against India's drug regulators, accusing them of lax supervision.

Thakur received a $48 million reward from the U.S. government for exposing Ranbaxy. But while most would consider his whistleblowing a good deed, some apparently see it as a betrayal.

Many Asian countries have sought to develop industries through partnerships between government and business. But this tends to put corporate interests above those of consumers and workers.

Now, there is pressure for change as more Asian products enter global supply chains. Companies are being subjected to closer scrutiny over safety and human rights issues, such as child labor. The Ranbaxy case could be considered a warning about Asia's approach to industrial development.

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