Tobacco Documents Online

k,•a 4~eastry.=-»~ ~c" The folks who blew the whistle on corruption in the Food & Drug Administration claim they have been harassed by the agency ever since. Getting even By Zina Sawaya IN MAY 1989 Edwin Cohen testified before a congressional committee about payoffs to the Food & Drug Administration. Cohen is president and chief executive of Barr Laborato- ries, a $70 million (fiscal 1990 sales) generic drug company. His testimony was supplemented by that of Mylan Laboratories Chief Executive Roy McKnight. As a result, four FDA em- ployees went to jail for accepting bribes from generic drug makers who were rivals of Barr and Mylan. Of 52 generic drug companies ex- amined during the House Oversight & Investigations Subcommittee's nearly three-year investigation, only 5, including Barr and Mylan, have so far been untainted by charges of falsi- fying data, bribing Food & Drug Administration officials, or worse. Recently, Bolar Pharmaceutical agreed to pay one of the largest indus- try fines ever-$10 million-on charges of obstructing justice, adul- terating drugs, and falsifying data. With $10 billion in sales of pre- scription drugs set to come off patent in the next five years, generic drug producers are poised for big growth, a Barr Laboratories' Edwin Cohen F _ Trouble with the FDA has cost millions in lost sales, wasted R&D and legal I fees. Forbes • April 29, 1991 92 Yet Edwin Cohen's life has been hell ever since lie blew the whistle on corrupt competitors and corrupt bu- rcaucrats. The same day he testified on Capitol Hill, FDA inspectors came knocking at Barr's doors in North- vale, N.J. and Pomona, N.Y. They said they wanted to inspect Barr's manutacturing tacilities, which had been inspected only six months earli- er. Cohen says such inspections are usually conducted every two years. The FDA inspectors found no irregu- larities but wasted a good deal of company time. Nor was that the worst of it. In January 1987 Barr subniittcd an ap- plication for its generic version of erythromycin estolate, an antibiotic, to the FDA. Barr didn't receive approv- al to market this drug until October 1990-almost four years later. Was the delay a reprisal for Cohen's whis- tle-blowing? Cohen thinks it was. The FDA denies it. Roger Williams, direc- tor of the FDA'S generic drug otlice, attributes such delays to backlogs and a shortage of employees: "We want to

11(1T1'LS UNtTED STATES Austin B„sh,n C{,icago Chicago (Ritz-Carlton) Houston Houston (Inn on tl,e Pariz) Los Angeles (Beverly Hills) New Yoriz (Tl,e Pierre) Newport Beach, California Pl,iladelpl6ia San Francisco Seattle (Tl,e Olympic) \\!,;Linl;ti,n, 1).C. CANADA Montreal Toronto Toronto (Inn on tl e Pariz) \ancouver LATIN ADILRICA Mexico City (1992) EUROPE Lon<lon I (Inn „n tI1C P.,,R) Paris (1993) ASIA '1„I:y„ (I QQ2) Singapore (1993) RESORTS Canada (Minal:i Lodge) Dallas (Las Colinas) ntaui (\V,ilea) New, \1?I. Santa Barbara (The Biltmore) Carlsbad, California (Aviara, 1992) Hawaii ():ona, 1993) P, n•+rn•aYons, rall vaur travrl n~rnl, „r 1n l6c 11 6• call. (81k/) 332-3-F-E?; iu Canada (8UO) 268-62t~2. FourSeasons Hotels • Resorts Barr Laboratories go back and scrutinize applications very carefitlly," lie says. Yet it would seem that Barr suffered more than the usual delays. At first the FDA agreed that the drug was "bio- equivalent," that is, it had the same therapeutic effects as the brand ver- sion. Barr then sent three batches of the erythromycin sample to the agen- cy for final approval to market the drug. The agency examined the sam- ples and found only two of the three acceptable. Barr submitted three new batches. Again, one batch allegedly failed to pass the test. Barr went through this exercise three times before complain- ing to the FDA's then acting commis- sioner, James Benson. In April 1990 the FDA finally hired an outside con- sultant and former FDA employee to review the test results. The consultant came back with a positive verdict. However, three months later there was still no formal approval. At this point Barr moved to sue the agency, contending that it had violat- ed the law with a too lengthy review. The agency tried to have the case thrown out of court, but without success. The FDA eventually approved the drug. No ruling has yet been issucd in the court case. It's no secret that bureaucratic de- lays, indecision and cover-your-be- hind tactics at the FDA cause horren- dous and probably unnecessary delays for the entire pharmaceutical indus- try. Was Cohen's frustration over and beyond the average? It would seem so in Barr's case. "It's one thing to have a delay because your application is sitting on a huge pile on somebody's desk and they simply haven't gotten to it," says Christopher Schwartz, Barr's former counsel. "It's another thing to have your application delayed because it's being looked at proactively, and they are finding specious defects." Cohen insists that Barr was penal- ized in yet other ways for his whistle- blowing. The company has another suit against the FDA, alleging that It' leaked proprietary information on Barr's application for conjugated es- trogens, a menopausal drug. Cohen claims that an agency reviewer passed along information to Wyeth-Ayerst, the company that developed the dntg. Cohen also claims that this leak resulted in the agency's abruptly re- scinding its guidelines on the drug's testing method, thereby voiding Barr's application. An advisory committee approved new guidelines for testing the drug at the end of February, but'it will be at least two years before a generic ver- sion of conjugated estrogens can come to market. The cancelation cost Barr nearly $2.5 million. Cohen is bitter, saying: "With conjugated es- trogens, we would be a $125 million company now." Cohen's fellow whistle-blower, McKnight of Mylan Laboratories, claims his company, too, has suffered from FDA wrath. Mylan, a generic producer with revenues of $95 mil- lion, had to wait a year from May 1989 before receiving its approval for timolol maleate, an antihypertension drug. By then the drug wasn't much "It's one thing to have a delay because your application is sitting on a huge pile on some- body's desk and they simply haven't gotten to it; it's another to have your application delayed because it's being looked at proactively, and they are finding specious defects." of a moneymaker, since it already had stiff competition on the market. However, unlike Barr, Mylan has cho- sen not to sue the agency, although it does feel it has been discriminated against because ofits boss' testimony. The FDA's Benson appointed an independent panel last fall to look into the allegations that the FDA was retaliating against people who com- plained about misdeeds by its em- ployees. The panel is expected to re- lease its findings in the near future. The House subcommittee's investi- gation is also continuing. Other generic drug companies have not conle forward to complain about FDA retaliation. But Cohen at- tributes this more to fear than to lack ofcvidence; they all have applications pending before the agency. They seem to feel there are times when it just doesn't pay to fight city hall. = 95 Forbes  April 29, 1991 I . I I I I