HEFFNER: I'm Alexander Heffner your host on The Open Mind.
Katherine Eban is an investigative reporter
whose articles on pharmaceutical
counterfeiting, gun trafficking,
and coercive interrogations by the CIA have
won international attention and numerous awards.
Author of "Dangerous Doses: A True Story of
Cops, Counterfeiters, and the Contamination
of America's Drug Supply," Eban uncovered for
Fortune Magazine, the comprehensive picture of
how under-policed generic companies operate.
As she writes, "It's not a tale of cutting corners or
lax manufacturing practices,
but one of outright fraud in which the company
knowingly sells substandard drugs around
the world including in the US,
while working to deceive regulators."
Eban adds that the impact on patients will likely never
be known, but it's clear that millions of people
worldwide got medicine of dubious quality.
An Andrew Carnegie Fellow awarded to support
research in the humanities and social sciences,
Eban continues her investigation of
non-compliance and illicit behavior by generic drug
makers in her next book.
She has separately probed Purdue,
the maker of OxyContin, which has unleashed grave
harm upon the American public in the
ongoing opioid epidemic.
Welcome Katherine.
EBAN: Thank you so much. Pleasure to be here.
HEFFNER: How do you see the intersectionality
here, the criminal justice system and its seeming
inability to catch up with those who would seek such harm.
EBAN: You know the problem has long been that the top
executives do not get put in jail and they do not
nearly enough get excluded from the pharma industry.
And so the problem is that each one of these
investigations, each one of these prosecutions
winds up displacing crime.
And basically each time you have one of these
cases you have a kind of diaspora of the people who
know how to fraudulently market drugs,
who know how to alter data in manufacturing labs,
and so long as those people walk away from
these investigations, able to come back and
participate in any kind of business or program
that does business with the Medicare programs,
Medicaid programs of this country,
this is never gonna stop.
So that's the kind of justice prosecution problem here.
But there's really a bigger issue,
which I see as one of basic economics.
You know I've been investigating the
pharmaceutical industry for well over a decade now.
And almost every single fraud and con that
I have looked at is originating from the fact that we have
the most expensive drugs in the world.
That is really at the root of everything that we see.
Whether it's trying to expand market-share and
expand the patient base and sell as many drugs as
you can... or whether it's the fact that because we
have the most expensive drugs and nobody can
afford them anymore, we are forced into the arms
of these absolutely low cost,
bottom of the barrel generic drug makers,
most of whom are located overseas,
in India and China.
They offer an incredible discount on the drugs that are made.
But consequently they've forced,
you know the FDA to scatter all its resources
across the globe.
It's a policing problem, it's a jurisdictional
issue, you know as one person said to me:
you know I don't have an attorney general in
New Delhi, who can give me a search warrant.
So how do we get into these companies to make
sure that they're doing what they say they're doing.
So basically I see economics and the pricing
structure of our medicine, really at the center
of every con that I've investigated.
HEFFNER: And it sounds like,
Katherine, it's a combination of the
incapacity of American law,
but also where these drugs are being born overseas.
The inability for there to be any kind of foreign
intelligence that we can gather to tell us,
you know, the drugs being produced here are not
being produced with the right kind of screening
or are more susceptible to contamination.
EBAN: Well you bring up a very important point,
which is one of foreign intelligence.
So, if a Swiss drug maker is making drugs and the
FDA as is required is gonna go over to
Switzerland and inspect a manufacturing plant,
if they find something wrong,
you know who's gonna be keenly interested in it
and want to enforce the infractions in that plant?
Swiss regulators.
Now, you go over to India, and the regulators in
Mumbai are fairly disinterested in what's
happening in those manufacturing plants.
This is an enormous problem,
because US regulators don't have active and
engaged counterparts in a lot of these countries,
where they can get cooperation,
they can get help with enforcement.
So we're essentially functioning now in India
as lone police officers, policing thousands of
plants that in some cases, FDA agents and inspectors
have not walked into in a decade.
HEFFNER: What percent of roughly,
what percent of drugs that are prescribed in the US
are generic, and what percent are being
conceived, made overseas, or at least in conditions
that are not subject to regulation?
EBAN: Right.
Well in theory, all the conditions are
subject to regulation.
The question is, how effective is that
regulation, how well does it work?
But let's go back to numbers for a second.
HEFFNER: Sure.
EBAN: 85 percent of all the drugs prescribed in
this country now are generic.
The majority of those are made overseas.
Over 40 percent of those alone are made in India.
Take a step back, 80 percent of all the active
ingredient used in all our drugs,
whether brand or generic, are coming from China.
Now if somebody explained to me,
I mean, China is definitely a concern and a
risk as we've known.
They've been the source of contaminated Heparin,
tainted dog food, all kinds of troubling lapses
have occurred in products from China.
But there is a distinction to be made,
which is China does not make the bulk
of our finished doses.
So they're making active ingredients.
The bulk of the finished doses in generics are
coming from India.
What that means is they're making final pills,
capsules, and vials that are literally leaving
those manufacturing plants in India
and coming directly to our drugstores.
Now that is the last stop where drugs of poor
quality can be detected.
HEFFNER: So the trail, right now,
primarily is China, India, US.
EBAN: Correct. That's right.
HEFFNER: The reality of what you're describing
is that we don't really make most of our own medicine anymore.
EBAN: That is right.
And it's actually, in the view of many,
a very sad story.
For the my upcoming book, I did a lot of research
on the history of antibiotic production,
and it's really a thrilling story how
penicillin was discovered and how the British flew
it in spy planes over to the US and got antibiotic
production going with the help of the US government.
But then over the decades, slowly all of that
antibiotic production moved overseas,
to the point where, really,
the US makes almost no antibiotics at all.
All of our antibiotics are made overseas.
So if you're going to go and fill a prescription
for your kid, at a drug store,
or an antibiotic, they've got an ear infection,
it's almost certain that that antibiotic is going
to have been made in India.
HEFFNER: Why in that post-war period that you
describe, did we kind of lose touch with the
construction of the drugs and making this a proud,
American industry, and instead we decided we're
gonna import and we're gonna gouge people instead.
How did that process happen?
EBAN: So it's a story about cost.
Because China, now a number of people have
accused China of sending over essentially spies to
Harvard University in stealing antibiotic strains.
But nonetheless, the Chinese did have a long
history of fermentation.
They make soy sauce, they make beer,
they make rice wine vinegar.
And they knew how to ferment antibiotics.
And they started making antibiotic salts,
which are kind of like the base ingredient of antibiotics.
They could do it so, so cheaply.
So manufacturers here and in Europe said,
well, why am I keeping open these factories when
I can buy the active ingredients from China
for a song, import them over here,
and make the finished doses.
And that's really what happened,
is that it was just economics and we stopped
making the drugs.
You know but it's a whole ecosystem that has been
harmful because antibiotic development stopped.
One of the things that I'm examining in my upcoming
book is the problem of when you have poor quality
generics, what does that do.
That actually feeds drug resistance.
People are getting substandard doses,
then drug resistance is growing as it is around the world.
So this is a giant problem.
I mean this is not just a problem of,
you know, of a consumer in a drugstore maybe getting
a substandard quality drug and they don't actually
know where it was manufactured.
This is a problem of public health worldwide.
HEFFNER: And assuming the FDA is funded adequately,
sufficiently to do the kind of due diligence
they've done within the last decade,
where does that leave us in terms of what you're
finding in your book now.
EBAN: Right.
HEFFNER: To improve our own domestic
fact-finding efforts so that folks are not being
fed or medicated through, what you describe,
substandard quality medicines that could have
vast blowback.
EBAN: Right. Ha, well.
Assuming that the FDA is funded adequately,
but it isn't.
So it's a domestic, it, you know,
HEFFNER: And this is a pre-Trump reality of the Obama years.
EBAN: Yes. Yes.
HEFFNER: And maybe going back all the way,
how many years?
EBAN: Well, a long time.
But I'll talk about pre and post Trump in a well
not post-Trump but, pre and current Trump.
HEFFNER: Right.
EBAN: The FDA was set up as a domestic agency.
It was not an international agency,
and suddenly around 2002, 3, 4,
it finds itself tasked with becoming a global
policeman of foreign manufacturing plants.
And there's a huge backlog and they scramble to keep
up, and they've got all kinds of problems.
And one problem that they have is,
who are they going to send to inspect these plants?
Does anybody even want to go over there
and do these trips to India?
Can they station people there?
What are the diplomatic impacts of this?
What are the sort of state-craft impacts of this?
China doesn't even want to let our FDA inspectors
in because they think they're all spies.
So how are they going to solve this problem?
And they solved it in a way that has actually been
disastrous for public health.
One of the ways that they solved it is by giving all
of these manufacturing plants overseas advance
notice that they're coming.
Well they give them two months,
three months advance notice to say,
please expect an inspection,
can you help our inspectors with transportation.
Can you help them with hotel arrangements,
can you help us with visas can you get them
an invitation letter.
This is not how you do inspections to really find
out what's going on in plants.
And what I'm uncovering and,
which will chronicle in full detail in this book,
is that these plants have responded with these giant
data falsification teams that arrive in advance or
work in advance of the FDA inspections,
and basically inspect all the data.
Now if you're one of these plants,
why are you going to invest all this money up
front to develop a generic drug,
and submit an application to the FDA when you don't
know if they're going to approve it?
Wouldn't it be better and smarter to fake the data
to begin with, wait to get the approval and then
scramble to try to make the drug.
HEFFNER: Sounds like the FDA has a relationship
with the drug makers that is completely unhealthy
to any accountability.
EBAN: Completely unhealthy to any accountability,
but also, in many ways much worse.
I mean doctors with a conscience can choose
to bar pharmaceutical reps from their offices,
and they can choose not to go to fancy dinners
and become speakers on a pharm,
big pharma roster.
But if a manufacturing plant overseas ends up
fooling the FDA and getting an approval.
HEFFNER: Right.
EBAN: To make a chemotherapy drug that
actually doesn't work and millions of Americans
are getting that.
HEFFNER: Now this is a technical question:
Is there a different standard for the generics in terms
of FDA certification or approval than there is
for non-generics?
EBAN: That's a good question.
There's a different process.
The standard is the same, because they have to make
a drug that is deemed bio-equivalent.
But they're held to a much lower level of proof,
which is appropriate if the system worked.
In other words they don't have to prove safety
and efficacy of the molecule, because that's already
been proven through huge clinical trials by the innovator.
The big pharma company that made the drug
in the first place.
But what they do have to demonstrate to the FDA's
satisfaction, is that their drug actually
reaches the appropriate level of concentration in the blood.
As did the innovator.
So that's through small, small tests,
small bunches of tests on individuals.
Testing blood and presenting,
presenting the FDA with reams of data,
showing that in all the tests they did
the dissolution is appropriate,
the stability is appropriate,
but, that's all fine if the data that
they're submitting is authentic.
HEFFNER: Now that falsification can happen
in a generic or it can happen from the innovator itself.
EBAN: Innovator when they are submitting a drug
for approval, the amount of data and scrutiny
is so enormous.
The kinds of clinical trials they have to
conduct, the review by an advisory panel of experts,
I mean, there is a huge amount of scrutiny,
and that's not where you see a lot of the fraud.
In big Pharma, where you really see the fraud is in marketing.
It's in sales. So we made this huge investment,
we did all this research, and now we're going
to try to expand all the indicators for this drug.
Hey! You know opioids?
Let's market 'em to children,
let's market 'em to old folks,
let's market 'em to everybody,
let's, you know, I mean, the big thing that Purdue
Pharma did, and you know I've written about Purdue
pharma, is they tried to basically expand who they
marketed their drug to.
HEFFNER: Normalize it.
EBAN: To normalize it, exactly.
They tried to normalize it,
to say, you know what, because our drug they
like to claim that it was non-addictive.
HEFFNER: Right.
EBAN: And therefore could be safely marketed by
ordinary doctors to sort of ordinary pain patients.
That it was no longer going to be just reserved
for a dying cancer patient,
it was going to be marketed to you know,
anybody with a backache.
HEFFNER: Right.
EBAN: That's what happened there.
HEFFNER: There's a lot of mischief,
and you attribute it to the economic model
in this country, primarily in terms of our commerce,
and what can we do about it?
What do we need to do about it?
Hopefully at the end of this book after you expose
much wrongdoing, there will be some kind of call
for corrective course.
EBAN: Well, what I think would be a significant
correction would be to regulate prices,
would be to regulate drug prices in this country.
If you regulated drug prices,
there you'd take a little bit of profit and heat out
of our pharma marketplace.
You wouldn't force us into the arms of,
you know, lowest cost drug makers in developing countries.
Now I'm not exactly sure how we bring drug
production back to this country,
because that is pricey, but that's another thing
that needs to happen.
You know, I mean it's, you can look at this as a
national security issue.
India and China have incredible leverage over us.
They could actually bring the country,
our country to its knees in about 24 hours
by saying, we're just stopping exports of drug components.
So we're, we've put ourselves in an incredibly
vulnerable position.
HEFFNER: When you talk about Trump's FDA,
that's also a danger that you need to articulate
and everybody else does too, with respect to these tariffs.
And the negative blowback associated with them.
EBAN: That's an excellent point.
HEFFNER: Not going to be able to fund our cabinet chest,
let alone the necessary drugs.
EBAN: Let me just say that you know,
as the Trump Administration got going,
some of the names that they were floating to run
the FDA were truly scary.
I mean these were people who advocated for you know
taking us back to the 1920s,
to say you know, drug makers shouldn't have to
prove their drugs are effective in order to,
in order to market them. Which is insane.
I mean our entire, you know,
drug apparatus, our FDA has all evolved under
the premise that actually drugs should have to be
proven to work before they're sold.
So, the good news was that the person who was
ultimately appointed to the FDA is not insane.
HEFFNER: [LAUGHS]
EBAN: Scott Gottleib, so you know he is—he
is sort of working within the parameters of normal.
Non-crazy, as far as regulation.
But that doesn't address kind of all the underlying
structural issues that my book is tackling.
So, you know, that's one.
And then the other thing I would say is that
this kind of, premise that Trump has thrown out there
that you know if you make a new regulation you
should have to take away two.
That's nuts too.
You know, I mean, I'm not sure that the American
consumer sufficiently appreciates the way in
which regulation save their lives every single day.
And really some of the incredible government
workers who are out making sure that companies
do comply with those regulations.
I mean I have met a lot of those people
and they really care about their jobs.
And keeping people safe.
HEFFNER: To create the condition where there
is price control, you need a new political climate,
or a new consciousness around some of the issues
you describe, to understand that we could
very well go back to the 1920s in terms of fatality
and mortality and not having the kind of equipment, i.e.
antibiotics, or the next generation,
probiotics, to resolve medical crises.
When are we going to wake up to the need for some
reclassification or modification in our
economic system so that price control is possible,
that regulation's not viewed as detrimental.
EBAN: You know we really need a consumer revolution
in this country.
Consumer revolutions have really led to the creation
of the FDA and the development of the FDA.
I mean, the sort of outrage over,
you know, the jungle and arsenic in food
and all of those sorts of things really led
to the creation of the modern FDA.
I would say we're, you know,
a couple of scandals away from that level of
awareness in terms of drug pricing.
But let me also say that in our new,
you know, ten-scandal a day news ecosystem,
it's really hard to hold on to issues and push them through.
HEFFNER: Katherine I've said for a while now
that ultimately the Trump Administration's
incompetence will be, if the people like,
if that incompetence is bleeding into agencies' work,
then there will be a scandal on a scale
that it's not the next 60 seconds of a scandal,
but it will be millions of lives that are in jeopardy.
So, as you point out, the person ultimately selected
for the chairmanship of FDA,
has the requisite qualifications and
credentials, and hopefully that means...
EBAN: Of being not insane. Right.
HEFFNER: [LAUGHS] Right.
And hopefully that means that the agency will be
governed, not insanely,
EBAN: Right
HEFFNER: And, will preserve regulations
that are integral to our livelihood.
But it almost does make sense that there is this
disconnect when we don't produce any of
the medicines ourselves and as a function we view it as,
or the companies view it as acceptable that there
would be kind of, almost a tariff like effect on the price.
Where we're not making them,
and therefore you know, it is what it is.
And I'm just wondering, how,
is there a way that we could justify the price
control if we did take more ownership of the
industry, or retake ownership of the industry.
Is that plausible?
EBAN: Well, yeah, you bring up a very
interesting point.
The pricing for generic drugs,
one of the problems is that it's actually too low.
HEFFNER: Right.
EBAN: What happens is that once multiple generic drug
makers come into a market to sell a drug,
the price drops out of it.
Now how do you sustain quality when you're
selling a vaccine for four cents a vial.
You know, it becomes essentially impossible.
So, maybe you do price regulation around
protected manufacturing in the US.
Maybe we say that as a function of national
security, we need to make a percentage of
antibiotics that we use in this country.
I mean maybe just how they're selling you know
Shinola watches made in Detroit.
And now they're like, but selling them in Barney's.
I mean maybe, you know, we need a Shinola antibiotic
plant in troubled cities. You know, set 'em up.
HEFFNER: I would think so, the scenario,
nightmarish scenario that you present is if and all
scientists say when, it's not if,
there is the next epidemic,
it doesn't sound like we're going to have the bandwidth,
the scientific or medical capital to deal with it.
And, that we will suffer as a result.
EBAN: Yeah. We don't have the capital and we don't
have the hardware and we're not making the drugs.
And the drugs that we need are not even
in the pipeline or in development.
I mean it's a massive crisis and you have to add
to that, I mean one thing we haven't touched
on is drug shortages.
So the problem is because the prices have,
the bottom has fallen out because of generic drug
making, and there the profit is gone from whole
sectors of drugs, companies have stopped making them.
And so we have sort of crazy drug shortages,
of very basic supplies and equipment.
HEFFNER: Katherine I admire your persistence
and your dedication to the reporting you do and your advocacy.
Thank you.
EBAN: Thank you very much.
HEFFNER: And thanks to you in the audience.
I hope you join us again next time
for a thoughtful excursion into the world of ideas.
Until then, keep an Open Mind.
Please visit The Open Mind website at
Thirteen.org/OpenMind to view this program online,
or to access over 1,500 other interviews.
And do check us out on Twitter and Facebook
@OpenmindTV for updates on future programming.
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