FDA approved new drug despite on-going investigation of lab misconduct

ProPublica had reported that the FDA allowed drugs to stay on the market despite the fact that the research underpinning their safety and efficacy was tainted by fraud. New information shows that even after the FDA had cited the lab for falsifying data, the agency issued at least one brand new approval to a drug tested there

Last week, ProPublica reported that the Food and Drug Administration (FDA) allowed dozens of medications to stay on the market, even though the research designed to prove their safety and effectiveness was undermined by "egregious" violations at a major pharmaceutical research laboratory in Houston. New information shows that even after the FDA had cited the lab for falsifying data and other misconduct, the agency issued a brand new approval to a drug tested there.

The FDA has refused to reveal the names of any of the approximately 100 drugs affected by the fraud at the Houston lab of the firm Cetero Research, saying that to do so would reveal confidential commercial information. ProPublica was able to identify five of those drugs, and now we have found a sixth. This one was approved after the agency had already cited the Houston lab for misconduct.

The drug is a generic version of Tussionex, which combines a long-acting narcotic cough suppressant with an anti-allergy medication. Manufactured by TrisPharma, the drug has a tongue-twisting chemical name: hydrocodone polistirex/chlorpheniraminepolistirex.

ProPublica discovered that both of the clinical trials used to show that the generic is equivalent to the name brand — a key requirement for FDA approval — were analyzed in May and June 2009 at the Houston lab of the firm Cetero Research. The company, which conducted research for scores of pharmaceutical companies, has acknowledged that chemists at its Houston lab committed research fraud, though it says the misconduct was limited to a handful of employees and that none of their tests have so far proven to be wrong or inaccurate.

Cetero filed for Chapter 11 bankruptcy last year and emerged with a new name, PRACS Institute. PRACS, in turn, filed for bankruptcy earlier this year.

The FDA got wind of problems at Cetero Houston in June 2009 when, prompted by a whistleblower, the company alerted the agency of potential wrongdoing.

On May 3, 2010, three FDA agents came to inspect the lab. The facility’s president turned over eight flatbed carts double-stacked with file boxes and admitted that much of the lab’s work was fraudulent, saying, “You got us,” lead agent Patrick Stone recalled. (The lab’s president declined to comment.)

On May 7, the FDA issued an inspection report that cited data falsification and other laboratory violations at the facility during the time its chemists conducted the tests for the TrisPharma drug.

But five months later, in October 2010, the FDA approved Tris' drug for sale in the United States.

The FDA continued to inspect the Houston lab, and in July 2011, the agency called the lab’s misconduct so “egregious” and pervasive that more than five years of tests conducted at the lab were potentially “unreliable.” The agency asked pharmaceutical companies to repeat or reanalyze any tests conducted there during that time if they had helped win drug approval. The FDA did not pull any drugs off pharmacy shelves, despite the fact that dozens were approved on data the agency now said was questionable.

In April 2012 the FDA relaxed its requirements. The agency announced that studies analyzed at Cetero Houston between March 2008 and August 2009 — the time period in which tests for the TrisPharma drug were conducted — would not need to be redone but instead would require only a "verification of data integrity by an independent third-party audit."

Tris said it hired a consultant to perform the audit and it “came back 100 percent clean," Groner said. "Something could have happened, but in our case, nothing did." He said Tris submitted the audit to the FDA in the second quarter of 2012.

The FDA has reviewed the audit and found it “acceptable,” an agency spokesperson wrote in an email. “Our earlier determination that this product meets FDA standards was upheld.” She declined to add any information or answer more specific questions.

The main point of that audit was to look for red flags that researchers might have cooked the books, said Scott Groner, TrisPharma’s Director of Regulatory Affairs and Compliance.
The Cetero researchers ran blood samples through a machine known as a mass spectrometer. By examining the timestamps of these runs, Groner said, the auditors could tell whether or not a rogue researcher would have been able to tamper with the results of the experiment. "If there was some manipulation, there would have to be some down time" for the researcher to fiddle with the samples or the machine in order to produce the desired result, he explained. Auditors, he added, “were looking for many other things. Were [experiments] done late at night, on weekends?"

While the FDA declined to comment on the specifics of the Tris Pharma case, the agency has previously said that it ran a risk assessment and concluded that the chances were low that drugs tested at Cetero Houston were unsafe. The fact that the FDA has since found no problems with drugs tested there “confirmed” that risk assessment, a top FDA official said.

As of last week, the agency said it had completed reviewing 21 out of 53 submissions it had received from pharmaceutical companies that had medications tested at Cetero Houston. It also said a few companies had not yet submitted new data or audits on drugs tested there.

Rob Garver can be reached at [email protected], and Charles Seife can be reached at [email protected].



SEBI suspends M Bhiwaniwala & Company for 3 months

According to SEBI, the entity had colluded with the company’s directors and other brokers to execute cross trades for its clients that artificially raised the price of the scrip from Rs2 to Rs170.20 without any corresponding change in the fundamental of the company

Rajeev Kumar Agarwal, whole-time member of the Securities and Exchange Board of India (SEBI) has passed an 5th April 2013 suspending the registration certificate of stock broker M Bhiwaniwala & Company, belonging to the Calcutta Stock Exchange, for three months for its alleged role in fraudulent trading in shares of GR Industries and Finance.


After considering the facts and circumstances of the case, SEBI has suspended “certificate of registration of the noticee (M Bhiwaniwala & Co) for three months”, the regulator said in an order.


"The (suspension) order will come into force immediately on expiry of 21 days from the date of order,” the market regulator said.


SEBI had conducted investigation between 1 January 2004 and 28 February 2005 into the irregular trading in the scrip of GR Industries and Finance. According to SEBI, the entity had colluded with the directors of the company and other stock brokers and deliberately executed the cross trades for its clients that generated artificial volume and artificially raised the price of the scrip from Rs2 to Rs170.20 during the period without any corresponding change in the fundamental of the company.


“...the noticee had indulged in fraudulent and unfair dealings and had not taken due care and diligence in observance and compliance of the statutory requirement in conduct of its business as a stock broker,” the order said.


Mamata forms SIT to probe Saradha chit-fund scam

The collapse of Saradha group, which has been supported first by the Left Front and then by Trinamool Congress, was expected. What will come as a shock to the average person is the political patronage received by such fly-by-night fund collectors

West Bengal Chief Minister Mamata Banerjee on Monday instituted a high-level inquiry and deputed a special investigation team (SIT) to probe the collapse of chit-fund company, Saradha Group, which has hit thousands of depositors across the state.


After a high level meeting, the chief minister told reporters that a SIT under the director general of police (DGP) would go into the fiasco and a high-level inquiry under the Commission of Inquiry Act was being instituted.


Last week, Moneylife reported that Saradha group, one of the biggest finance companies in West Bengal was on the verge of collapse and the state government had issued an order for arresting Sudipta Sen, chairman and managing director (CMD) of the company for default on repayments. Sen is reported to be absconding.


According to media reports, about 200 commission agents of Saradha group met Trinamool Congress leaders demanding immediate intervention by the state government for recovering money from the group. The agents claimed that Saradha group has started defaulting on repayments since January and it is they who have to face the brunt of depositors. The farce is that the Saradha group was close to all political parties as long as the going was good. Kunal Ghosh (former chief executive of the Saradha group's media unit) is a Trinamool MP in the Rajya Sabha.


So far, all deposit-taking companies, chit funds and collective investment schemes (CIS) operators, have received patronage from politicians across the party lines. Especially in West Bengal, the ruler got changed but patronage has remained the same. The CID and state finance department officials had once raided Rose Valley's office in Tripura, but to everyone's surprise, no arrests were made. Many people had attributed the outcome to Rose Valley's cosy relations with the Left Front.


Mamata Banerjee has said that a draft for promulgating an ordinance having more teeth to restrict operations of chit-fund companies was prepared. Stating that strong laws were needed to curb the illegal activities of chit-funds, Banerjee said since their operations were governed by central laws and not by the state government, “the onus lies with the central government.” She probably does not know that these companies have used the local connections to evade the law of Collective Investment Scheme of the Securities & Exchange Board of India (SEBI).

She said that she had telephonically requested president Pranab Mukherjee, to see that the bill passed by previous Left Front government seeking to restrict chit-fund operations, was returned to enable the state government to incorporate more stringent provisions to deal with such illegal activities.


“Laws that the Left Front government had proposed, had some flaws in it and the chit-fund business mushroomed during the Left regime,” the Trinamool Congress chief alleged, ignoring how her own MP was heading the dubious media business of Saradha.


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