Dept. of not noticing the joke

As part of the the NYT's relentless gay promotion, featured tonight:

A Songwriter Is Out and Riding High in Nashville

By JODY ROSEN 

Shane McAnally, who has helped write seven country No. 1 songs in recent years, found that his creativity flourished after he stopped hiding that he was gay.

“When I stopped hiding who I am, I started writing hits,” said Shane McAnally, at his home in Nashville. 

Was being named "McAnally" a clue? The NYT includes this intriguing Correction:

This article has been revised to reflect the following correction: 

Correction: May 24, 2013 

An earlier version of this article included multiple misspellings of Shane McAnally’s surname.

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Red Pill: Indian generic drug maker Ranbaxy fined $500,000,000

Malvinder Singh, 2004

I know that nobody is interested in stories about pharmaceutical corruption, but this Fortune article "Dirty Medicine" by Katherine Eban about the Indian generic drug manufacturer Ranbaxy is an absolute must read.

Ranbaxy got the U.S. legal monopoly on making the generic version of Lipitor, the world's biggest drug. It also made a host of others, such as amoxicillin, the traditional antibiotic given to babies with earaches.

The article is slow to get going, but it just builds and builds.

By the way, I had been hearing the name "Ranbaxy" for a number of years, but I had absolutely no clue how corrupt it was. Consider Ranbaxy Laboratories Wikipedia page as of May 25, 2013, which is mostly cheerleading and doesn't yet mention Eban's 10-day-old article.

As you read it, consider Ranbaxy from the perspective of conspiracy theories. It would be not unreasonable to consider Ranbaxy a giant conspiracy to defraud the world's patients. And yet ... very few people, including company insiders, competitors, regulators, investors, patients, and journalists, seem to have noticed before Eban's article pulled it all together to show us how deep the rabbit hole goes.

People like to imagine conspiracies as well-oiled organizational machines, but this one was comprised merely of incompetence, carelessness, greed, bad temper, and a whole lot of people assuming that things can't be as bad as they look.

Dirty medicine 

May 15, 2013: 9:03 AM ET 

The epic inside story of long-term criminal fraud at Ranbaxy, the Indian drug company that makes generic Lipitor for millions of Americans. 

By Katherine Eban 

1. The assignment 

FORTUNE -- On the morning of Aug. 18, 2004, Dinesh Thakur hurried to a hastily arranged meeting with his boss at the gleaming offices of Ranbaxy Laboratories in Gurgaon, India, 20 miles south of New Delhi. ... 

[Thakur's boss] Kumar said, "We are in big trouble," and motioned for Thakur to be quiet. Back in his office, Kumar handed him a letter from the World Health Organization. It summarized the results of an inspection that WHO had done at Vimta Laboratories, an Indian company that Ranbaxy hired to administer clinical tests of its AIDS medicine. The inspection had focused on antiretroviral (ARV) drugs that Ranbaxy was selling to the South African government to save the lives of its AIDS-ravaged population. ...

As Thakur read, his jaw dropped. The WHO had uncovered what seemed to the two men to be astonishing fraud. The Vimta tests appeared to be fabricated. Test results from separate patients, which normally would have differed from one another, were identical, as if xeroxed. 

Thakur listened intently. Kumar had not even gotten to the really bad news. On the plane back to India, his traveling companion, another Ranbaxy executive, confided that the problem was not limited to Vimta or to those ARV drugs.
"What do you mean?" asked Thakur, barely able to grasp what Kumar was saying. 

The problem, said Kumar, went deeper. He directed Thakur to put aside his other responsibilities and go through the company's portfolio -- ultimately, every drug, every market, every production line -- and uncover the truth about Ranbaxy's testing practices and where the company's liabilities lay. 

Thakur left Kumar's office stunned. He returned home that evening to find his 3-year-old son playing on the front lawn. The previous year in India, the boy had developed a serious ear infection. A pediatrician prescribed Ranbaxy's version of amoxiclav, a powerful antibiotic. For three scary days, his son's 102° fever persisted, despite the medicine. Finally, the pediatrician changed the prescription to the brand-name antibiotic made by GlaxoSmithKline (GSK). Within a day, his fever disappeared. Thakur hadn't thought about it much before. Now he took the boy in his arms and resolved not to give his family any more Ranbaxy drugs until he knew the truth. 

What Thakur unearthed over the next months would form some of the most devastating allegations ever made about the conduct of a drug company. His information would lead Ranbaxy into a multiyear regulatory battle with the FDA, and into the crosshairs of a Justice Department investigation that, almost nine years later, has finally come to a resolution. 

On May 13, [2013] Ranbaxy pleaded guilty to seven federal criminal counts of selling adulterated drugs with intent to defraud, failing to report that its drugs didn't meet specifications, and making intentionally false statements to the government. Ranbaxy agreed to pay $500 million in fines, forfeitures, and penalties -- the most ever levied against a generic-drug company.

$500 million.

(No current or former Ranbaxy executives were charged with crimes.)

In China, some executives would have been shot a long time ago. But India is all post-modern and not into that kind of out of date harshness.

Thakur's confidential whistleblower complaint, which he filed in 2007 and which describes how the company fabricated and falsified data to win FDA approvals, was also unsealed. Under federal whistleblower law, Thakur will receive more than $48 million as part of the resolution of the case.

$48 million?

... More than 80% of active pharmaceutical ingredients for all U.S. drugs now come from overseas, as do 40% of finished pills and capsules. ... Today's global market for generic drugs is $242 billion and growing. ... 

Ranbaxy was the first foreign generics manufacturer to sell drugs in the U.S. and rose rapidly to become, today, the sixth-largest generic-drug maker in the country, with more than $1 billion in U.S. sales last year (and $2.3 billion worldwide). The company, now majority owned by Japanese drugmaker Daiichi Sankyo, sells its products in more than 150 countries and has 14,600 employees.

As our dependence on generic drugs from overseas has grown, so have questions about their oversight and safety. A report by the Government Accountability Office found that in 2009, regulators inspected only 11% of foreign drug manufacturing plants, while they inspected 40% of domestic ones. 

... Due to complex logistics, foreign inspections can last less than a week and allow companies weeks of advance notice, while domestic ones can last up to six weeks and are unannounced. ...  

[Ranbaxy] is not a tale of cutting corners or lax manufacturing practices but one of outright fraud ...

This is an important gestalt: regulators kept giving Ranbaxy a pass because they assumed it was cutting corners but that while, sure, the glass was a little bit empty, it of course was mostly full. Nope.

It was very hard for anybody to take the red pill and wake up to the fact that this giant business, which sold to the Japanese for $4.6 billion in 2008, wasn't really a respectably corporate giant with an occasional lapse, but a big criminal enterprise that sometimes managed to deliver pills that more or less worked.

The rough outlines of the fraud at Ranbaxy first emerged in a 2008 court filing by the Justice Department. But its extent and depth and the involvement of top company executives have not been previously revealed. Fortune has also uncovered evidence that the company's misconduct continued well into 2009, even after the FDA restricted the company's activities. 

This account is based on more than 1,000 confidential Ranbaxy documents, including internal reports, memos, e-mails, hundreds of pages of FDA documents obtained through Freedom of Information Act requests, and court records. Fortune interviewed more than a dozen former and current employees, as well as 40 scientists, public health experts, patient advocates, congressional investigators, and regulators. 

As the Ranbaxy story makes vividly clear, generic-drug makers intent on breaking the rules -- especially those operating abroad -- can easily do so. Drug applications work on the honor system: The FDA relies on data provided by the companies themselves. ... The approval system "requires the ethical behavior of the applicant," he said. Otherwise, "the whole house of cards will fall down." 

In 2008 the agency halted the importation of 30 different drugs from two of Ranbaxy's manufacturing plants in India and invoked a rare Application Integrity Policy, stopping the review of new drug applications from the Paonta Sahib manufacturing site until Ranbaxy proved their truthfulness.

This reversal of the burden of proof is the gestalt I was talking about.

But, bear in mind that Ranbaxy still kept its prize -- the legal right to be the only company in the world to manufacture a generic version of Lipitor, Pfizer's anti-cholesterol drug that was the big revenue generator in the world. Ranbaxy had the right to introduce generic Lipitor in November 2009, but just beforehand, Pfizer and Ranbaxy announced a settlement of Pfizer's patent infringement suit that gave Pfizer and extra two years to reap monopoly profits in the U.S.

Being a cynical bastard, I assumed that the wily American company Pfizer had bribed the upstart Indian firm to hold off for two years. The practice of patent holders slipping money to generic rights holders to hold off introducing a rival is known as "pay for delay" and is the subject of an upcoming Supreme Court case.

I now suspect I got the true story 180 degrees backward. I was just not cynical enough about globalization.

Pfizer goes unmentioned in Fortune's article. What their role was in all this is most intriguing.

Pfizer is a firm with a current market capitalization of over $200 billion dollars. Lipitor generated $115 billion in revenue for Pfizer over its last decade of exclusivity. In the years 2010 and 2011, when Ranbaxy was conceding to Pfizer two more years of lucrative American monopoly on the drug, Pfizer's American revenue on Lipitor totaled about $10 billion over two years, in comparison to about $1 billion in 2012 when Ranbaxy finally entered. (What was Pfizer's gross margin on Lipitor?)

How much did Pfizer know about how dirty Ranbaxy was when it settled its lawsuit againt Ranbaxy in late 2009? A lot, no doubt, since the scandals had been vaguely public for several years. And Pfizer would have a lot of incentive to learn even more about Ranbaxy. Did such knowledge play any role in Ranbaxy conceding two more years of American monopoly to Pfizer?

Seems like a pretty interesting topic from a game theory standpoint. Oh, and also because $10,000,000,000 was at stake. Perhaps somebody will someday take an interest in this subject.

... For all the actions taken by federal authorities, there is a deeply troubling aspect to the government's role in the saga of Ranbaxy. Even as ever more details of the company's long-running misconduct emerged, drug regulators permitted Ranbaxy to keep on selling many of its products. 

Indeed, the FDA -- charged with protecting the safety and health of Americans -- went even further. Despite the agency's finding of fraud and misconduct, it granted Ranbaxy lucrative rights to sell new generic drugs. In the most high-profile example, in November 2011 the FDA allowed the company to maintain its exclusive first dibs on making the generic version of a medicine taken by tens of millions of Americans: Lipitor. In the first six months, this privilege allowed Ranbaxy to generate $600 million in sales of generic atorvastatin, as nonbranded Lipitor is known. 

Should the FDA have been surprised, then, when problems emerged just a year later? In November 2012, Ranbaxy had to recall millions of pills after tiny glass particles were discovered in some of them. Even that, it turns out, was enough for only a temporary suspension, and the FDA permitted the company to resume sales in March. 

"The real story is how poorly our government has responded to all of this," says Vincent Fabiano, Ranbaxy's former vice president of global licensing. He's one of a number of former company executives who spoke to FDA or other investigators about the company and then watched in increasing disgust as, for years, nothing seemed to happen. "Still as we sit here today," Fabiano says, "Ranbaxy is in business in the United States." 

The company that Dinesh Thakur arrived at in June 2003 was bristling with ambition but had a seat-of-the-pants feel. Fistfights erupted at executive meetings. The vice president of clinical research chain-smoked four packs a day.  

... Lying to regulators and backdating and forgery were commonplace, he says. The company even forged its own standard operating procedures, which FDA inspectors rely on to assess whether a company is following its own policies. Thakur's team was told of one instance in which company officials forged and backdated a standard operating procedure related to how patient data are stored, then aged the document in a "steam room" overnight to fool regulators. 

Company scientists told Thakur's staff that they were directed to substitute cheaper, lower-quality ingredients in place of better ingredients, to manipulate test parameters to accommodate higher impurities, and even to substitute brand-name drugs in lieu of their own generics in bioequivalence tests to produce better results.

The last part of that sentence means that to pass tests of their proposed generic drug's accuracy, Ranbaxy smuggled in suitcases full of name brand drugs and then tested the name brand drugs against ... the name brand drugs themselves, not Ranbaxy's proposed generic version. Voila -- a perfect match! Sensational quality control.

... The company not only invented data but also fraudulently mixed and matched data, taking the best results from manufacturing in one market and presenting it to regulators elsewhere as data unique to the drugs in their markets. 

Sometimes all the data were made up. ... 

Just three decades ago, generic drug companies in the U.S. were derided as patent breakers. They had no clear way to gain FDA approval, while brand-name-drug companies had a lock on the market. The 1984 Hatch-Waxman Act changed that. It created a pathway, the Abbreviated New Drug Application (ANDA), which allowed a generic drug company to simultaneously challenge a patent and demonstrate to the FDA that it could make a drug. 

In the late 1980s several generic-drug companies were caught fabricating data and bribing FDA officials to gain approval. In the scandal's wake, the FDA tightened regulations. It required that a company make three large "exhibit" batches to demonstrate that it could dramatically scale up its manufacturing, undergo inspection, and use an independent company to perform bioequivalence tests before an ANDA was approved. The purpose, says David Nelson, who exposed the 1980s scandal as a senior investigator for the House Energy and Commerce Committee, from which he retired in 2009, was to "prevent the systematic submission of false information" to get FDA approval. 

The ANDA offered a lucrative reward for the company that risked almost certain litigation by first challenging a patent. If successful, the company got six months of exclusive sales after the patent lapsed, allowing the generics company to charge up to 80% of the brand-name price during that period. After that, other generics companies could jump in, and the price would drop to about 5% of the original price. Being first was the real jackpot. Consequently, first-to-file status became such an obsession that generic-drug company executives camped out in the FDA parking lot to file their paperwork first. 

This is a crucial point. You win in the generic drug business less by producing a better product at a cheaper price and more by filing your paperwork of your self-tests with the regulators first. After that, eh ...

Ranbaxy learned how to game this system, according to former employees. To hasten the pace of its applications, Ranbaxy sometimes skipped a crucial intermediate step. Instead of making three medium-size exhibit batches and testing those for bioequivalence and stability, as required, Ranbaxy tested earlier and much smaller research-and-development batches that were easier to control and less costly to make. In some FDA applications, it represented these as much larger exhibit batches and presented the data as proof. And then there was the ultimate shortcut: using brand-name drugs as stand-ins for its own in bioequivalence studies. 

These deceptions greatly accelerated the pace of the company's FDA applications. They were also a grave public-health breach. Once Ranbaxy got FDA approval, it leaped straight into making commercial-size batches without any meaningful dry runs. The test results on file with the FDA were meaningless, and the drugs Ranbaxy was actually selling on the U.S. market were an unknown quantity, having never been comprehensively tested before. 

In May 2004, three months before Thakur embarked on his research, Dr. Kathy Spreen joined Ranbaxy's U.S. office as executive director of clinical medicine and pharmacovigilance. ... At first, the company's science seemed to exceed her expectations. ... The data showing the concentration of Ranbaxy's drug in the bloodstream appeared to match that of the brand name perfectly. "Look how good this company is," she remembers thinking. "The bioequivalence data is superimposable on the drugs we are modeling." 

About a month later, while comparing the data for Sotret, the company's version of the acne drug Isotretinoin [a.k.a., Accutane], Spreen found it similarly superimposable on the brand-name data. That's when she began to worry. "If it's too good to be true," she recalls thinking, "it's probably made up."

... With her suspicions aroused, Spreen began asking her Indian counterparts to send underlying data that supported the test results. They repeatedly promised the information was on the way. When it didn't arrive, she got excuses: It was a "mess"; they'd be "embarrassed." She recalls begging, "I don't care if it's written on the back of toilet paper. Just send me something." But it never arrived. ... 

... Spreen kept thinking that if only she could explain American regulations more clearly, Ranbaxy's executives would understand. But no amount of explaining seemed to change how the company did business. When sales of a diabetes drug were sluggish, she says, one executive asked Spreen if she could use her medical license to prescribe the drug to everyone in the company so they could record hundreds of sales. Spreen refused. 

... On a trip to India in mid-2004 Raj Kumar quietly confirmed to Spreen what she had already come to suspect: that crucial testing data for many of the company's drugs did not actually exist and submissions to regulators had been forged. ... Along with a number of Ranbaxy executives, Spreen was subpoenaed by congressional investigators to provide witness testimony. Reluctantly, she told them her story years ago -- but nothing ever came of it. 

CEO Tempest had assured Kumar that the company would do the right thing. So on an evening in late 2004, several months after assigning Thakur to dig up the truth, Kumar found himself before five members of the scientific committee of the board of directors, including Tempest and the chairman of the board. 

Kumar had a PowerPoint presentation of 24 slides. It made clear that Ranbaxy had lied to regulators and falsified data in every country examined in the report. "More than 200 products in more than 40 countries" have "elements of data that were fabricated to support business needs," the PowerPoint reported.  ... 

Thakur remained behind. But with Kumar's departure, he had lost his protection. Three months after the board presentation, the company's internal auditors arrived at his department for what they called a routine review. They stayed for 10 weeks, combing through his department's books and interviewing staff. In late April the company accused him of browsing porn sites from his office computer.... 

... Throughout the summer of 2005, Thakur tried to convince himself that the company's medicine was no longer his problem. He was jobless and piecing together haphazard consulting work. He feared for his family's safety. The company had a "reputation for threatening people, bullying people," he recalls. Thakur hired a security company, which posted a guard outside his home 24 hours a day.

... Thakur knew the [AIDS] drugs weren't good. They had high impurities, degraded easily, and would be useless at best in hot, humid conditions.

"useless at best"

They would be taken by the world's poorest patients in sub-Saharan Africa, who had almost no medical infrastructure and no recourse for complaints. The injustice made him livid. 

Ranbaxy executives didn't care, says Kathy Spreen, and made little effort to conceal it. In a conference call with a dozen company executives, one brushed aside her fears about the quality of the AIDS medicine Ranbaxy was supplying for Africa. "Who cares?" he said, according to Spreen. "It's just blacks dying." 

On Aug. 15, [2005, i.e., almost 8 years ago] four months after resigning from the company, Thakur opened a Yahoo e-mail account and wrote under a pseudonym to top regulators in the U.S., Britain, the WHO, and Brazil. ... 

Finally he wrote directly to FDA commissioner Lester Crawford and alleged that Ranbaxy was selling "untested, spurious, ineffective medication." He added, I "plead with you to put a stop to this crime." ...

To Thakur, the wrongdoing was black and white. He had given proof and expected action. But 10 days after the conference call, the FDA announced that it had approved Ranbaxy's application for the first pediatric-AIDS drug for the U.S. market, Zidovudine.

... The agency needed an unvarnished look at the company. But as was standard for an overseas inspection, it notified Ranbaxy almost three months in advance that it was coming. ... 

Rivera-Martinez sounded almost plaintive when he wrote to Thakur that spring: "We are under a lot of pressure to approve Ranbaxy's generic version of Pravastatin [a cholesterol-lowering drug] when the patent exclusivity runs out this Thursday." 

It had been nine months since Thakur had first contacted the agency. He had watched as Ranbaxy got six new approvals. The FDA agent who had taken charge of his case tried to ease his frustration. "Imagine, if you will, that we were able to prove even half of what you have told us," she wrote to Thakur. "This would bring down the entire corporation. One of the largest in the world." ... 

On Feb. 14, 2007, Vincent Fabiano was at his desk at Ranbaxy's U.S. headquarters in Princeton, N.J., when a man he had never seen before walked into his office. "Who the hell are you?" Fabiano asked. "I'm an FDA criminal investigator," the man said. Fabiano noticed the gun on the man's hip and stepped away from his desk as directed. 

The building was surrounded by police cars, and panic was spreading. "People were freaking out, crying," recalls a former employee. "They took every computer. There were people with guns." Employees called the search warrant the Great Valentines Day Raid. ...

In January 2006, Malvinder Singh, the founder's grandson, succeeded Brian Tempest as Ranbaxy's managing director and CEO. At 33, with an MBA from Duke University, Singh was brash and competitive. The Indian business press dubbed him the Pharaoh of Pharma, and hailed him as an "out-of-the-box decision-maker." 

Others viewed Singh as petulant and immature. "I want profit!" he would yell in meetings, two former employees recall. Among the staff, he was known for being preoccupied with his ranking on the Forbes list of India's 40 richest people. When he and his brother Shivinder fell from No. 9 in 2004 to No. 19 in 2005, despite $1.6 billion in assets, Singh seemed to blame the decline on a lack of employee loyalty, a former employee recalls. ...

On June 11, 2008, Singh stunned the Indian business world by announcing that he and his brother were selling their 34% stake in Ranbaxy to the Japanese drugmaker Daiichi Sankyo for $2 billion. Overall, Daiichi Sankyo shelled out $4.6 billion to take control of the company. Singh agreed to stay on for five years as CEO. Some in the Indian press portrayed the sale to a foreign company as a betrayal of national entrepreneurial pride. ...

Everywhere the FDA had looked, its inspectors found fraud. .... "The culture of the company was corrupt to its core," says Nelson. 

As congressional investigators turned up the heat, the agency finally cracked down. In September 2008, it announced it was restricting the import of 30 drug products made by Ranbaxy (11 of which had been approved after Thakur's first contact with the FDA three years earlier). The agency still did nothing to recall the very same drugs on pharmacy shelves all over America, despite finding that Ranbaxy had committed fraud on a massive scale. 

Nelson says that under FDA rules, the agency should have required Ranbaxy to recall every one of its drugs and resubmit every application. "Why [should] this company, of all companies, be exempted from normal FDA policies?" he asks. "There's something here that just reeks." ...

For years, many of Ranbaxy's senior executives were expected to do what seemed like a small favor when they traveled to India: carry suitcases full of brand-name drugs that they were told were needed for research and development. At Ranbaxy's U.S. headquarters, suitcases were kept packed with drugs and waiting for the next traveler to India. To some executives, this seemed like a minor shortcut, possibly to cut shipping costs, avoid quarantine, or speed delivery. 

Generic-drug companies often study small amounts of a brand-name product in order to reverse-engineer it or to reference it as a point of comparison in applications. But proper channels for purchasing and transporting such drugs are well established and have become "ironclad" since the 2001 passage of the Patriot Act, according to an independent quality-assurance expert. 

At Ranbaxy, top executives skirted these regulations and sometimes oversaw the secretive ferrying of drugs, at the very moment when the company faced deadlines to resubmit data to regulators. Fortune was unable to conclusively determine what the suitcase drugs were used for. Some former employees suspect that the company used the brand-name drugs as a substitute for its own in testing (as employees had seen in previous instances), in order to generate pristine data showing how closely Ranbaxy's drug matched the brand it was seeking to replicate. 

Whatever the purpose, what's clear is that some Ranbaxy staffers strenuously resisted being used as drug mules. ... Malvinder Singh, then the company's worldwide head of pharmaceuticals, got involved. Through his secretary, he asked who would be taking charge of the samples and when they would reach Gurgaon.  

In general, those who carried the drugs for Ranbaxy were given a letter claiming the products were for research and development and had no commercial value. This wasn't true. In June 2004, one executive got stopped by Indian customs with hundred of packs (worth thousands of dollars) of an antinausea drug, Kytril, that he hadn't declared. The drugs were seized, according to internal e-mails. In one, a Ranbaxy executive noted that this was "an illegal way of bringing the medicine in to India." 

The illicit drug runs continued well after the company had pledged to the FDA that it would operate squarely within regulations. From 2007 to 2008 alone, 17 executives from the New Jersey office took undeclared drugs through Indian customs, four of them multiple times, according to a document given to the FDA. 

In February 2009, a lawyer in the regulatory division at Ranbaxy's New Jersey headquarters got wind of an even more suspicious incident. Some months before, Ranbaxy had agreed to retest its troubled Sotret formulation and submit new data to the FDA. ...He learned that a Ranbaxy senior director had overseen the medicine's unreported purchase from a pharmacist, who had dropped off the boxes at an employee's house. Another employee had hand carried the drugs to London, where one of the company's most senior regulatory executives -- whose job involved making sure that the company followed all regulations -- brought them to India in a suitcase. 

When the lawyer reported the incident to the company's top U.S. executives, they told him to drop the matter. Remaining deeply uneasy, in March 2009, he wrote a memo to file, which Fortune obtained, documenting the incident. The company had not only violated the iPledge program, he wrote, but also had "likely violated U.S. Export Laws, U.K. Import and Export Laws and possible Indian Import Laws." 

Not long after Ranbaxy purchased the isotretinoin, the company submitted its new data to the FDA, which approved it. Within a year the company was forced to start recalling its Sotret again because the drug was degrading faster than it was supposed to -- the very problem that had been occurring before. 

In February 2009 the FDA punished Ranbaxy anew, labeling the company with the drug regulator's version of a scarlet "A": The agency imposed a so-called Application Integrity Policy. That meant a dramatic shift in the regulatory dynamic. No longer would the FDA have the burden of proving fraud if it wanted to block a Ranbaxy product. The onus had flipped, and now the company would have to prove its products weren't fraudulent in order to get them approved.

Gestalt shift. And yet ...

... Within three months, Malvinder Singh stepped down as CEO.  

The government seemingly had a trump card in the negotiations -- the final approval for Ranbaxy to sell generic Lipitor. Yet it seemed unable to bring a swift resolution to the process, as the company appeared to play for time. The FDA first sent a draft of the consent decree to Ranbaxy in August 2010, according to a document sent by an FDA lawyer. Six months later, Ranbaxy's lawyers responded, asking for revisions. In a letter to Ranbaxy's lawyers three months after that, an FDA attorney sent further revisions and tried to bring an end to the process, stating, "We believe this response reflects FDA's final position and look forward to Ranbaxy's prompt response which, in our view, should suggest only minor proposed revisions." 

It would be eight more months, until January 2012, before the Justice Department announced the consent decree -- and then another 17 months of wrangling between armies of lawyers before the case ended on May 13. 

Well before the final resolution, in November 2011, the FDA gave its final blessing for Ranbaxy's version of Lipitor. Asked about the decision to allow Ranbaxy to make Lipitor after its misconduct at two plants was revealed, an FDA spokesman asserts that the agency is required to evaluate a drug application on a "facility-specific basis." The company's "data integrity problems," he says, occurred at facilities different from where its generic Lipitor is manufactured. 

That's true -- but it leaves out the fact that Ranbaxy originally applied to make Lipitor at one of its Indian facilities, which was then blacklisted by the FDA. The agency permitted the company to make a significant shift in its application: to switch the plant at which it would make the generic Lipitor. Ranbaxy now proposed making the drug in the U.S. at a facility that was not under FDA investigation. 

Last November, Ranbaxy was back in the headlines with some very unwelcome news -- the company had detected tiny glass particles in its Lipitor. It had to recall millions of pills and temporarily halt production. Says the FDA spokesperson, "The fact that there were some quality problems that led to a limited recall of the generic product was not a result of the approval process or how it was handled." 

Remarkably, Ranbaxy is in a stronger position now in the U.S. than it was before its entanglement with the FDA. ... As one incredulous employee put it, "We don't know why we're still in business." 

The congressional inquiry into the FDA petered out over the years. But under the direction of David Nelson, investigators interviewed the FDA inspectors who went to Paonta Sahib and asked them a simple question: Would they feel comfortable taking Ranbaxy drugs? "Every single inspector that went to India said they would never take a Ranbaxy drug," says Nelson, "like eight out of eight." 

They were not alone. One by one, each of the former Ranbaxy executives Fortune interviewed had determined, while still at the company, to stop taking Ranbaxy drugs. 

In April 2010, Ranbaxy issued another in a mounting series of recalls, this time for a pediatric antibiotic of amoxicillin and clavulanate potassium.

Amoxicillin, introduced in 1972, is a standard antibiotic for babies' ear infections.

In a statement, a Ranbaxy spokesman said that while the company's own testing found the drug to be within specification, "the company has decided to recall all the lots in question as a matter of caution, given its commitment to the health and safety of patients." The oral suspension turned brown, instead of white, on being mixed. It was the same drug that Thakur had given his feverish young son, with no effect, seven years earlier.

Reporter associates: Doris Burke and Frederik Joelving 

To borrow from a Comment: a crap chute.

Go through your medicine cabinet and look for any pills with "RANBAXY" as the "Labeler." Take them back to your pharmacist and get real medicine.

Last year, while driving my wife and father on Mulholland on top of the Hollywood Hills, I was suddenly overcome with vertigo. Before I could plummet off Mulholland Drive, like the bad guy at the end of a 1971 episode of Mannix, I switched places with my wife and she drove me to the UCLA emergency room. After five hours of insanely expensive brain scans, a very nice doctor said they couldn't see anything wrong with me.

I was still feeling wobbly a few days later when I remembered that a week before, I had picked up my regular prescription at Rite-Aid for a generic drug. Instead of being small, white, and oblong, the pills were suddenly large, red, and round. I had assumed that the drug process couldn't go wrong, so I had accepted it.

When I remembered that I was taking a screwy looking drug (why is it now twice the volume of what I'd been taking since 1998?), I immediately stopped taking it and the vertigo permanently disappeared the next day. I went back to Rite-Aid and said this didn't look like my regular drug. They said, yes, it is. I said, give me some of the small, white, oblong ones. A month ago they tried to give me some of the vertigo-inducing generics again. I complained and got the good ones.

We have no idea how much illness is caused by bad drugs. Nor is it a good thing to have to worry about. Paranoia about poisoning can be debilitating. In my experience, people of German backgrounds tend to be particularly prone to worry about poisoning.

Also, take a look through your stock portfolio.

This story raises troubling questions about globalization and the current cult of cheapness.

This also ought to be a wake-up call for India that it's high-end culture has severe problems, but I doubt if the message will get through. Nor will I expect this story to do any damage to India's image in America. The president and Tom Friedman keep telling us that the geniuses in China and India are going to eat our lunch, so what's a vivid case story when it conflicts with The Narrative?

Another point is the growth of information overload. Having read this article, I would assume that "Ranbaxy" is now the world's worst brand name. And yet, I don't see much evidence for this. This article came out a week ago and two or three people mentioned it in the comments, but it's barely made a splash. For all I know, any publicity is good publicity for the name "Ranbaxy."

I served on a jury in an even stupider fraud case in 2006 involving used car dealers cheating on sales taxes, and nobody else on the jury understood from the two weeks of testimony what had happened. I have the feeling that if you empaneled that same jury and read them this magazine article from start to finish in court, six of them wouldn't remember the name of defendant ("Ran-bax-y") when they got into the jury room, and nine of them wouldn't be persuaded of Ranbaxy's guilt even when you point out that the article said Ranbaxy just pled guilty and paid a $500 million fine.

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The logic of gentrification via immigration

From The Simpsons:

KENT BROCKMAN: Our top story, the population of parasitic tree lizards has exploded, and local citizens couldn’t be happier! It seems the rapacious reptiles have developed a taste for the common pigeon, also known as the ‘feathered rat’, or the ‘gutter bird’. For the first time, citizens need not fear harassment by flocks of chattering disease-bags. 

Later, Bart receives an award from Mayor Quimby outside the town hall. Several lizards slink past. 

MAYOR QUIMBY For decimating our pigeon population, and making Springfield a less oppressive place to while away our worthless lives, I present you with this scented candle. 

Skinner talks to Lisa. 

PRINCIPAL SKINNER Well, I was wrong. The lizards are a godsend. 

LISA But isn’t that a bit short-sighted? What happens when we’re overrun by lizards? 

SKINNER No problem. We simply unleash wave after wave of Chinese needle snakes. They’ll wipe out the lizards. 

LISA But aren’t the snakes even worse? 

SKINNER Yes, but we’re prepared for that. We’ve lined up a fabulous type of gorilla that thrives on snake meat. 

LISA But then we’re stuck with gorillas! 

SKINNER No, that’s the beautiful part. When wintertime rolls around, the gorillas simply freeze to death.

Skinner sounds like a closet libertarian: No problem!

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L.A. Mayor Villaraigosa needs a job fast

Kobe Bryant and Antonio Villaraigosa

The term-limited outgoing mayor of Los Angeles, Antonio Villaraigosa, is said to be searching desperately for a job to pay the bills when he leaves his $232,000 annual salary office in a few weeks. An L.A. Weekly analysis of his tax and financial statements says that the 60-year-old mayor, a regular in the front row at Lakers games, doesn't have any financial assets other than a small rental property in the exurban Moreno Valley. He doesn't own a house in Los Angeles or a car. In an interview with the local CBS station, Villaraigosa didn't exactly deny that he needs money pronto.

Barack Obama's financial situation was similarly fallow up until 2004 (doing a cash-out refi on the condo kept him afloat a couple of times). But, then, Obama's WASPy tastes run toward browsing at bookstores and playing mediocre golf courses, while Villaraigosa is more of a party in Cabo with Charlie Sheen kind of guy. 

As you may recall, as part of the Democrats' Hispandering, Villaraigosa was chosen to preside as chairman of the 2012 Democratic convention, while a younger Mexican-American "mayor," Julian Castro, was chosen to give the keynote address. Castro isn't a real mayor -- he gets paid only about $3,000 per year for his ceremonial position because San Antonio has a city manager form of government, with a city manager who gets paid $355,000. But it's easier for Democratic power brokers to launder money to support Castro because he is a real lawyer. (A big Democratic contributor / trial lawyer gave the politically promising Castro identical twins a huge sum of money as a fee for referring an accident victim to him.)

In contrast, mayor of Los Angeles is a real job. It's not as powerful of a position as mayor of Chicago or New York, and Villaraigosa has mostly treated it as one long photo op, but L.A. doesn't have a city manager. 

Villaraigosa, however, is not a real lawyer -- he gave up trying to become a lawyer after failing the difficult California bar exam four times -- so he can't go to work for a Democratic-connected downtown law firm like a typical ex-mayor might. (For example, Jim Hahn, the respectable Democratic dynast mayor whom Villaraigosa defeated in 2005, went to work for a big real estate developer to provide "legal advice and business development." Now, the ex-mayor is a judge. But, then, Hahn passed the bar exam back in the 1970s, so he can be a judge.)

Besides, Villaraigosa gives off sleazeball fumes -- local reporters in L.A. seem to despise Villaraigosa -- that have repeatedly undermined the national media's attempts to portray him as the smiling face of the inevitability of the Hispanic Electoral Tidal Wave.

But that doesn't mean Villaraigosa won't someday get elected governor of California:

On Sept. 20, 2012, the mayor dined with Democratic strategist Garry South at Celestino Drago's downtown Drago Centro, across from the landmark Central Library, where South suggested Villaraigosa would be an excellent candidate for governor. "We're going to have a Latino governor sooner rather than later," South tells the Weekly. "It's inevitable. It's just a matter of who it's going to be."

Amusingly (but unamusingly for Villaraigosa), it now appears that Gov. Jerry Brown wants a fourth term, which would make him an 80 year old governor after he had been a 36 year old governor. But why not? He's Jerry Brown and career weirdness is just normal for him. So, Villaraigosa would be blocked until he's 65 in 2018. 

The problem for the Democrats is that the Latino Talent Deficit leaves the California Democratic party seemingly stuck with Villaraigosa because it's clearly going to be the Latinos' Turn by 2018, but who else is there?

So, until 2018, Villaraigosa needs a job. I can't imagine that the Democrats won't eventually conjure one up for him. But, the fact that they've left him publicly hanging this late in the game, with nobody yet stepping forward to take on the inevitable duty of subsidizing Slick Villy's lifestyle for the next half decade, is evidence of how little respect Democratic insiders have for him.

Lots of people in L.A. remember Tony Villar as a lowrider with a Born to Raise Hell tattoo, then as a far left Chicano radical at UCLA, they remember the girl he knocked up and didn't marry, and the various domestic abuse incidents.

In pictures of Tony Villar from his days as a Mecha leader at UCLA in 1974, he looks pretty standard Chicano of the day (think Santana album covers). He's part of what's left of the receding Chicano wave that crested about 1972 that I talk about a lot.

About 1987 he retooled his image to become a yuppie leader supposedly representing the rising tide of immigrant Latinos. That's served his career well, but he's apparently still kind of an aging juvenile delinquent on the inside, which is why journalists in L.A. roll their eyes when the national media bandies rumors that Obama is about to appoint him Secretary of Transportation or Secretary of Commerce. They assume that the Mayor is the source of the rumors, and hope Obama doesn't believe the hype enough to put Villaraigosa in charge of national highway maintenance.

Villaraigosa's career is further evidence of the Latino Talent Deficit. Here's this state with a colossal Hispanic population, yet Villaraigosa is the best they've come up with? But that's the kind of dog-that-didn't-bark-data that is hard to notice even when you aren't in danger of getting Richwined for noticing it.

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The Swedish Way

BUSINESS AS USUAL. A meter maid issues a parking ticket for a burnt-out car following a night of riots in the Stockholm suburb of Alby. (Photo by Fria Tider)

From Fria Tider:

Parking Tickets Issued on Wrecks while Stockholm Burns 

Publicerat den 24 maj 2013 kl 11:19 

STOCKHOLM (FRIA TIDER). Owners of cars destroyed in the riots fined for parking illegally while police adopt non-intervention policy. 

Since last Sunday, May 19, rioters have taken to the streets of Stockholm’s suburbs every night, torching cars, schools, stores, office buildings and residential complexes. Yesterday, a police station in Rågsved, a suburb four kilometers south of Stockholm, was attacked and set on fire. 

But while the Stockholm riots keep spreading and intensifying, Swedish police have adopted a tactic of non-interference. ”Our ambition is really to do as little as possible,” Stockholm Chief of Police Mats Löfving explained to the Swedish newspaper Expressen on Tuesday. 

”We go to the crime scenes, but when we get there we stand and wait,” elaborated Lars Byström, the media relations officer of the Stockholm Police Department. ”If we see a burning car, we let it burn if there is no risk of the fire spreading to other cars or buildings nearby. By doing so we minimize the risk of having rocks thrown at us.” 

Swedish parking laws, however, continue to be rigidly enforced despite the increasingly chaotic situation. Early Wednesday, while documenting the destruction after a night of rioting in the Stockholm suburb of Alby, a reporter from Fria Tider observed a parking enforcement officer writing a ticket for a burnt-out Ford.

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Mike Judge interviewed by Alex Jones about "Idiocracy"

Mike Judge, the creator of Beavis & Butt-head, Office Space, King of the Hill, and Idiocracy, has been interviewed a fair amount over the years, but mostly by media hive workers who haven't noticed that he's not a nice liberal like they and everybody they know are. He's a moderately famous creative artist and social critic, so he has to hold the same views as us, right? (For example, here's a substantial profile in the New York Times from 2011 that's completely clueless about his politics.)

The most obviously interesting question about Judge's career is: what the heck happened to the "release" of Idiocracy in 2006? Since we all know that conspiracies, by definition, don't exist, the decision by a shadowy group of Fox insiders to deepsix Idiocracy for unexplained reasons is just one of those things that happen. Why do you want to know more? What are you, some kind of conspiracy theorist?

So, conspiracy theorist Alex Jones turns out to be the first interviewer I've seen who exhibits much sustained curiosity about Idiocracy.

Judge treads carefully, but he's a little more forthcoming than normal.

This is not to get expectations up too high if you haven't seen Idiocracy. It's kind of choppy and a little short, but comedies don't have to be exquisitely made to be memorable [Caddyshack, anyone?]. Idiocracy compares quite well to the other interesting comedy that came out that fall of 2006, Sacha Baron-Cohen's Borat. In complete contrast to Idiocracy, Borat was marketed brilliantly and appealed to various deep-rooted prejudices of taste-makers, so it made a bundle at the box-office. In the long run, Idiocracy seems like the more profound portrait of the Bush Era (although Ramzan Kadyrov and the vibrant Chechen-American refugee immigrants are doing their best to revive the relevance of Borat -- although Kadyrov is more inspired by Baron-Cohen's underrated The Dictator. The Chechen proxy dictator is currently pranking his Instagram followers with the central plot element of Baron-Cohen's 2012 film about a dictator and his double.)

I don't like watching interview videos because they are a slow way to ingest information relative to reading. So, to save you the time, here are highlights from the video "Mike Judge: The Movie They Couldn't Kill," Alex Jones' 36 minute interview with Mike Judge.

Dale Gribble

At about 7:00 in, Judge says that King of the Hill conspiracy theorist Dale Gribble is based in part on Alex Jones.

15:45 Other than The Simpsons, the animated comedies that have really taken off -- South Park, Family Guy, Ren & Stimpy -- are ones where voices are done by the writer-artists rather than by actors.

17:45 Michael Moore's "Bowling for Columbine" persuaded him to get into the guns -- especially Moore's argument about how there is a lower crime rate in Canada with "the same people." Judge leaves unstated why he found Moore's argument about Canada having the "same people" so unconvincing, implying that you ought to be able to figure out Moore's fallacy yourself, but he returns to emphasizing that he's thought a lot about the statistics of crime. "I took graduate probability and statistics courses."

18:40: He got blamed for Beavis & Butt-head causing crime in youth, but, he half-jokes, homicide has been declining since Beavis & Butthead came on the air in 1993.  He then presents his hand-drawn (but non-joking) table of crime rates in 1992 v. 2011 at 20:05.

21:15 Judge imitates Jones' appearance on Piers Morgan's show.

22:15 IRS targeting of conservatives "is going to make me listen to some more Alex Jones."

The last eight minutes from 27:40 onward are devoted to Idiocracy -- Judge started thinking about evolution and the disappearance of predators during the making of the Beavis & Butt-head Movie in the 1990s. Then, in 2001, was in line with his daughters at Disney's Teacups ride, when two women with strollers in the line behind him got into an altercation. Is this what Walt Disney wanted or expected? Then, he got thinking about the movie "2001" and how 2001 hadn't turned out to be everything pristine and advanced, but was instead the Jerry Springer Show and Wal-marts. So just take that chart from then to now and see where it would go in the future.

He owed Fox a second movie after Office Space. He didn't think anyone would make it. Gave the first draft script to Fox. Not much response. Then Luke Wilson wanted to do it, so Judge rewrote it for Wilson. 

Idiocracy's first corporate joke came after Judge drove past a tanning salon whose sign said "Exotic Tan for Men." But that's just low-rent, so it would be funnier if in the future handjob prostitution had spread upscale to Starbucks. He didn't expect Fox's legal department to approve it, but they came up with the suggestion that it would be less legally problematic if instead of just picking on Starbucks, the movie picked on a bunch of powerful corporations. 

(Sounds like my kind of legal department!)

The President of America addresses
the House of Representin'

"At some point I'm sure somebody flipped out, but I was shielded from all that."

This is pretty interesting because one common theory is that Idiocracy's satire of corporations is what sank it with Fox. Yet, Judge's comment that Fox's legal department came up with the idea of skewering numerous famous companies seem to lessen the likelihood of that idea. 

"They didn't really give it a release. There was a contractual obligation that they had to put it in 12 theaters and that's all they did." Judge talks about how Fox did so little to market the release that they didn't bother communicating the title to MovieFone, so if you called up trying to find when and where it was showing, the recording referred to "Untitled Mike Judge Project."

The Governor of California addresses
the State Senate

"What they told me was that it didn't test very well, which a lot of movies don't. Office Space didn't. ... We got 70% very good or excellent, which is a horrible score." He says that weird movies often get a polite "That was ... good" reaction.

He suggests that maybe Fox's horrible release turned out to be a brilliant strategy to get attention for the movie.

At 35:20, the screen then shows Reihan Salam's September 29, 2006 Slate article "The Movie Hollywood Doesn't Want You to See." I would estimate about 97% likelihood that Reihan read my September 3, 2006 iSteve posting "Mike Judge's "Idiocracy:" The movie the Fox studio doesn't want you to see." Also, my review in the October 6, 2006 issue of The American Conservative came out around maybe September 22. And back on March 26, 2006, I had written a profile of Judge's politics, including a preview of the upcoming Idiocracy for VDARE.

I go into this tedious detail because I like to imagine that my one accomplishment as a movie critic is getting the ball rolling on saving Idiocracy from oblivion by getting the younger Washington pundits talking about it.

35:30 Judge expresses pride that the word "Idiocracy" has become part of the language. Commenting on the movie's rise in fame and prestige, Judge says, "Maybe since it came out in 2006 everybody's gotten stupider?"

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Tsarnaev-Todashev story has immigration fraud written all over it

From the Boston Globe:

In 2008, the US government granted Todashev asylum, a protection granted to foreigners with a credible fear for their safety in their homelands ­because of religious, political, or other specific forms of persecution. 

But Reuters reports that Todashev's father is a government official in Grozny whose father is in tight with the All-Time Champ Chechen Ramzan Kadryov.

Todashev then obtained a green card in February 2013, making him a legal permanent resident and clearing the way for him to apply for US citizenship in a few years if he ­remained in good standing, said law enforcement officials with direct knowledge of the ­information. 

Immigration and Customs Enforcement arrested ­Todashev’s girlfriend, Tatiana Gruzdeva, May 16 on immigration violations, said a law enforce­ment official. An ICE spokesman confirmed that she is in custody.

Self-Portrait by Tatiana Gruzdeva

Facebook lists one Tatiana Gruzdeva in Orlando, complete with lots of pictures. My apologies if this is the wrong Tatiana Gruzdeva. I don't want to post a picture of Ms. Gruzdeva's face if she's the wrong Tatiana Gruzdeva, so I'll just share with you a self-portrait she posted on Facebook. I don't spend a lot of time on Facebook, but my impression is that this picture probably isn't all that unique and thus won't give away her identity.

Continuing with the Chicks Dig Chechens theme, there's also the Widow Todahsev.

Here's the late Ibragim Todashev and his 24-year-old widow from the Wall Street Journal:

Ms. Manukyan, an Armenian who converted to Islam before marrying Mr. Todashev, says she met her late husband in 2010 through a mutual friend in Boston. She says she separated from Mr. Todashev in November but was still in regular contact with him and was partly supporting him through their joint bank account.

We hear a lot these days about immigrants' "American Dream," but the Chechen Dream appears to be to have some babe support you. Do you think these guys were big hip-hop fans back in the old country?

If you were a nice-looking young Armenian girl in the United States, would you convert to Islam to marry some lay-about Chechen cage fighter? I guess we know in the case of Mrs. Tamerlan Tsarnaev, whose doctor father is a Yale and Phillips Exeter man (same as his father), who converted to Islam to marry Bomb Brother #1.

From the Boston Herald:

At the time of yesterday’s shooting, Todashev was free on a $3,500 bond, according to Florida court 
records, after being arrested May 4 by sheriff’s deputies at gunpoint at the Premium Outlet Mall in Orlando on a charge of felony aggravated battery after a mall 
security guard reported a fight in a parking lot that left a man battered and bleeding. 

In 2010, a Boston police report stated Todashev was involved in a violent road rage incident in Downtown Crossing 

The BPD report states officers “witnessed several people struggling to restrain a white male, later determined to be the subject, Ibragim Todashev. Officers heard Todashev yell, ‘You say something about my mother, I will kill you!’ Officers struggled to physically 
restrain and handcuff Todashev. ...” His case was continued without a finding.

The Los Angeles Times interviews the bereaved father:

According to the father, Ibragim Todashev was studying English at Grozny University when he got a chance to go to the United States in an exchange program in 2008. 

"He loved it there from Day One," the father said. "He would call me and tell me how everybody was into sports, what great sports gyms they had and what wonderful possibilities he had for the mixed fighting and boxing he loved so much. 

"Then when he told me that he loved it in America and wanted to stay," the father said, "I didn't mind." 

I mind. Why is it okay for various violent Chechens to just up and move to my country because they think it's a better place to practice hurting people?

He said his son hit it off with Tsarnaev because of their common Chechen heritage. Although Tsarnaev never lived in the restive Russian republic, his family's roots were there and there are indications that Tsarnaev felt a kinship with the Muslim separatists who want the region to break free from Russia. 

"We are a small people who endured so many hardships to survive in our difficult history that it is only natural for us to stick together, especially abroad," said Todashev, 53, who is head of the municipal services department in Grozny.

So that job puts the elder Todashev, who is polygamously married to two women and has twelve children, what, about two steps down the org chart from Ramzan the Great and thus three steps down from Vladimir Putin? How exactly does that qualify you for refugee status?

Ramzan Kadryov and Gerard Depardieu discuss motoring

Americans have this image of the refugee program existing for the likes of Einstein, Toscanini, and Solzhenitsyn. But, in reality, these days it tends to be a vehicle for immigration fraud by well-connected individuals who can plausibly purport that their relatives back home have made a lot of their neighbors extremely mad at them.

Like, for example, the late Brendan Mess's girlfriend Hibatalla Eltilib of the Sudan, who seems to have encouraged Tamerlan Tsarnaev's Muslim extremism.

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