The Washington Department of Health is reviewing a complaint that Sun Pharmaceuticals (SUNPHARMA) has been distributing samples of medicines in the state for more than two years without the necessary license, the second time one of the world’s largest generic drug makers has been probed for such an infraction amid scrutiny of several of its business practices.
A department spokeswoman explained that the complaint is currently being reviewed, but this is in the “very early stages of the process” and that the state Pharmacy Commission must still determine whether there is sufficient evidence to warrant a full-blown investigation. She did not say, though, how long this may take or whether a timeline exists to make a decision.
Sun Pharma recently faced a similar problem in Alabama, where the state Board of Pharmacy was weighing whether to renew a permit to distribute medicines after discovering the company was shipping products after its permit expired nearly two years ago. As part of a consent order, the board granted Sun a license and the company paid a $21,000 fine.
A Sun Pharma spokeswoman wrote to say “we are committed to complying with all of federal and state licensing requirements and are working with the Board of Pharmacy for Washington State to ensure that the necessary licenses are in place.”
As we noted previously, such infractions may appear to be isolated events, but have the potential to reverberate in ways that could hinder the company. How so? Shipping medicines without necessary licensing is not only a sloppy mistake, but the type of violation can easily catch the eye of pharmacy boards in other states, prompting still more scrutiny around the country.
Moreover, the episode occurs at a difficult time for the drug maker, which has been undergoing numerous challenges concerning its business and governance practices here and abroad.
Over the past three years, the U.S. Food and Drug Administration has issued several inspection reports for manufacturing problems at different facilities and the company has issued nearly a dozen product recalls (type in company name to see). Like some other Indian drug makers, Sun Pharma is closely watched by the agency over ongoing quality-control concerns.
Three months ago, a former Sun Pharma sales rep filed a lawsuit claiming he was fired for balking at alleged off-label marketing directives. Earlier this year, a senior executive, Abhay Gandhi, and his wife faced insider trading allegations brought by Indian regulators. He remains with the company despite a strict new policy concerning insider trading, raising questions about corporate governance.
The problems also arise as Sun Pharma attempts to expand beyond its traditional generic business into brand-name medications, specifically, the specialty drug business in the U.S. About $1 billion has been invested in the effort, according to remarks that Dilip Shanghvi, the Sun Pharma founder and managing director, made earlier this year to investors.
The Securities and Exchange Board of India, meanwhile, plans to conduct a forensic audit after a whistleblower claimed an Indian pharmaceutical company, Aditya Medisales, had various transactions with Suraksha Realty. This firm is controlled by former Sun Pharma executive director Sudhir Valia, who is also a shareholder in the other drug maker. This followed other whistleblower allegations about securities violations.
This post was updated to note that Sun Pharma signed a consent order with the Alabama Board of Pharmacy, which granted a license to the drug maker and assessed a $21,000 fine.