The day before Donald Trump was elected president, three federal inspectors arrived at Mylan NV’s manufacturing plant in Morgantown, West Virginia, and flashed their credentials. A tipster had raised concerns there might be unscrupulous activity at the factory where the generic giant makes some of its top-selling drugs. So, with Mylan executives looking over their shoulders in a conference room, the inspectors from the U.S. Food and Drug Administration, dressed in button-down shirts and ties, began an intense two-week examination.
The team of chemistry experts sifted through thousands of random files containing what appeared to be forbidden exploratory tests, which some drugmakers have used to prevent quality failures from coming to light. The inspectors suspected Mylan laboratory staff had recorded passing scores on drugs that originally fell short of U.S. quality standards.
The files didn’t identify which drugs may have been involved in any exploratory tests. Instead they had obscure names like “lop” and “Medium”—and one that ended in LMFAO, a popular acronym for “Laughing My F**king Ass Off.”
The inspectors also found bins full of shredded documents, including quality-control records, in parts of the factory where every piece of paper is supposed to be saved. The list of alleged infractions became so long that a fourth inspector was added. A warning letter, the FDA’s strongest rebuke, was drafted. It would mean the agency could refuse to consider any Mylan application for a new drug made at that plant until the company fixed things.
But the warning letter was never sent. Eight months later in July 2017, higher ups at the FDA apparently decided to take it easy on Mylan, the second-largest generic drugmaker, with $12 billion in revenue in 2017. The FDA ultimately left it in the company’s hands, and the drugmaker promised to address what the agency calls a “data integrity” issue.
The FDA didn’t say specifically why it chose not to warn the company. “The FDA issues warning letters when it deems it necessary to take such action based on a combination of factors, including FDA inspectional findings, follow-up with companies and other factors,” said Sarah Peddicord, an agency spokeswoman. Mylan said it demonstrated to the FDA that the testing in question “occurred in the development environment and was not associated with commercial product.”
When Scott Gottlieb became FDA commissioner in May 2017, he made getting more generics to market a top priority so the extra competition would drive down drug prices, something President Trump had pledged to do.
Gottlieb’s actions on generic approvals have drawn praise from both parties in Congress, which is holding hearings on drug prices Tuesday. But with Democrats having taken control of the House, members who oversee the FDA say they plan to examine a crucial public-health question posed by his efforts: Is the fast-tracking of those approvals coming at the expense of oversight that’s supposed to ensure that drugs already on the market are safe and effective?
In a year-long investigation into FDA’s regulation of the generic-drug industry, Bloomberg examined hundreds of pages of inspection documents; reviewed more than 10 years of inspection data and thousands of pages of pretrial depositions; and interviewed more than two dozen current and former FDA inspectors and agency officials, lawmakers, and industry experts.
“It is not unique to any one company. It’s something that the entire industry is struggling with.”