Event

Generic drug scandal

The federal probe of the generic drug industry that began in Baltimore in the late 1980s; it led to prosecutions of FDA employees and drug company executives.

9 links, 2 backed by primary records

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Dates: 1988–1993

Connections 9

involved

U.S. Food and Drug Administration its generic drug reviewers were prosecuted Scholarship & press 1
Baltimore seat of the federal probe Scholarship & press 2
Charles Chang FDA branch chief; pleaded guilty in 1989 Scholarship & press 2
Walter Kletch FDA review chemist; pleaded guilty to receiving an unlawful gratuity Primary record 2 3 4
Raju Vegesna company chief executive; sentenced in 1990 on a racketeering-travel count Scholarship & press 5
American Therapeutics drug company; pleaded guilty in 1990 to four counts Scholarship & press 6
House Energy and Commerce Committee oversight hearings under Chairman John Dingell Scholarship & press 2
Frank Young told the House subcommittee generic firms pressed FDA reviewers Scholarship & press 7

led to

Generic Drug Enforcement Act of 1992 According to U.S. Food and Drug Administration Primary record 8

Timeline 1 date

1988–1993 Generic drug scandal

Proof 8 sources

Generic Drug Industry Still Facing Fallout Of Probe, The Associated Press, 28 Oct 1992. Scholarship & press
Four years old and still going strong, a federal probe of the generic drug industry has left its mark
It has resulted in dozens of convictions, $20 million in fines
So far, seven drug companies, one laboratory and 29 individuals have been convicted on a variety of charges including giving and receiving illegal gifts, perjury and introducing drugs into the marketplace after submitting false testing data.
Federal prosecutors expect to close the investigation
Generic drug probe includes "two more" FDAers being investigated by U.S. attorney; agency chemist Kletch charged, The Pink Sheet. Scholarship & press
Two additional FDA employees are being investigated by the U.S. Attorney's Office in Baltimore
Two FDAers, Charles Chang and David Brancato, have resigned after pleading guilty to such charges
On May 25, Chang pleaded guilty to two counts of racketeering in connection with a free trip to Hong Kong and receipt of furniture given to him by a generic drug firm.
Kletch resigned from the agency on the same day the charges were filed.
said at a July 11 hearing on FDA's generic drug review process before his oversight subcommittee
seven employees out of a total of 30 chemists and consumer information officers in FDA's Division of Generic Drugs have been implicated by either receiving or accepting offers of illegal gratuities from generic drug companies
Walter S. Kletch; Denial of Hearing; Final Debarment Order, U.S. Food and Drug Administration, 29 Nov 1994. Primary record
pled guilty and was sentenced on September 22, 1989, for receiving an unlawful gratuity
Mr. Kletch claims that he received the gratuity from the president of a pharmaceutical firm because of their social relationship. Mr. Kletch denies taking any action that was inconsistent with agency policy because of the gratuity.
as a matter of law, Mr. Kletch's conviction establishes that his receipt of the gratuity was for, and because of, official acts that he had performed and was to perform.
18 U.S.C. 201: Bribery of public officials and witnesses, U.S. Code. Primary record
directly or indirectly, corruptly gives, offers or promises anything of value to any public official
American Therapeutics' former CEO Vegesna receives stiffest sentence yet for role in generic scandal, The Pink Sheet, 30 Jul 1990. Scholarship & press
on one count of interstate travel or use of interstate facilities in aid of racketeering
to pay for former FDAer Charles Chang's trip to the Orient in July 1987
directing the shipment of furniture and computer equipment to Chang
American Therapeutics Inc. fined $1 mil. for four counts of bribery and fraud, The Pink Sheet, 22 Oct 1990. Scholarship & press
American Therapeutics Inc. received a $1 mil. fine after pleading guilty to four counts of paying illegal gratuities, obstruction, falsification of data and failure to meet good manufacturing practices (GMPs)
Drug bureau chief defends FDA on payoffs, The Christian Science Monitor, 13 Jul 1989. Scholarship & press
many generic drug companies did not hesitate to exert tremendous pressure on FDA drug reviewers
Inside FDA: Barring People from the Drug Industry, U.S. Food and Drug Administration, Mar 1997. Primary record
Congress passed the public protection measure in response to the confidence-shaking discovery in 1989 of widespread corruption in the generic drug industry.
of felonies that included submitting false data to the Food and Drug Administration, lying to FDA investigators, paying or accepting bribes, and selling prescription drug samples

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