Product approvals legitimate: Biocon after CBI detains CDSCO officials in kickback case

The FIR filed by CBI in the alleged bribery case involving pharma companies and drug control officials claims that Central Drugs Standard Control Organisation (CDSCO) official S Eswara Reddy, who had been dealing with processing of files related to applications for approval of drugs and vaccines by various pharma companies, had been referred three files of Biocon Biologics Limited, Bengaluru, including one related to waiver of phase III clinical trials of "Insulin Aspart" injection.

The minutes of the Subject Expert Committee (SEC) meeting was also "manipulated" causing "substantial wrongful gain" to Biocon Biologics.

On Tuesday, CBI arrested Eswara Reddy, India's Joint Drugs Controller along with L Praveen Kumar, associate vice-president and head of National Regulatory Affairs (NRA) at Biocon Biologics. Guljit Sethi (alias Guljit Chaudhary) of Bioinnovat Research Services; Dinesh Dua, director of Synergy Network India Private Limited; and Animesh Kumar, assistant drug inspector at CDSCO were also among those arrested.

Also Read: Joint Drugs Controller Under CBI Net For Allegedly Taking Bribe To Waive Off Clinical Trial Of Biocon's Insulin Aspart Injection

Reddy, posted at the Central Drugs Standard Control Organisation (CDSCO) in New Delhi, and Dua were held on Monday during a 'trap operation' while the former was receiving the bribe to favour Biocon Biologics to waive phase 3 clinical trial of the insulin injection.

All of them were arrested after necessary paperwork and would be produced before the special court soon, the investigating agency said. The CBI has booked all the five accused under sections of the Indian Penal Code (IPC) dealing with criminal conspiracy, cheating, forgery and corruption.

The Case

The CBI has alleged that Sethi, acting as a conduit for Biocon Biologics, conspired with Praveen Kumar, head of the company's National Regulatory Affairs (NRA), and other senior executives of the company to pay Reddy a total bribe of Rs 9 lakh. This was for favourably recommending the file of 'Insulin Aspart Injection' to the Subject Expert Committee (SEC) meeting on May 18, 2022 for waiving the Phase 3 clinical trial, it alleged.

"Phase 3 clinical trial is an important regulatory mechanism to assess the safety of a pharma product. Any attempt to waive it can have serious public health safety repercussions," an official said. Reddy had attended the SEC meeting on May 18, 2022 and supported the waiver, the CBI has alleged in the FIR.

He manipulated the minutes of the meeting of SEC held that day by changing some key words in the recommendations, giving substantial wrongful gain to the company, the agency alleged. The CBI was working on the sensational case for over a month after getting inputs that Reddy was dealing with the processing of files related to applications for approval of drugs and vaccines by various pharmaceutical companies.

The central agency, which was following Reddy's activities, learnt that three files of Biocon Biologics, including one related to the waiver of Phase 3 clinical trial of the under development Insulin Aspart Injection, were referred to him for processing and approval.

The CDSCO functions include approval of new drugs, conducting clinical trials and laying down the standards for drugs. The CBI also received information that Sethi handled government regulatory works related to Biocon Biologics and had business relations with Dua, the CBI FIR alleged. The agency dug into her background to find that she had several pharmaceutical companies as her clientele.

She allegedly delivered huge bribes through Dua and others to senior officers of CDSCO on different occasions for processing the files favourably on behalf of her clients, officials said. Sethi also conspired with Animesh Kumar and other officers for including the Biocon Biologics file for the SEC meeting on June 15 on payment of Rs 30,000 in bribe to Kumar, the CBI alleged.

Reddy assured Dua about a favourable decision in the SEC meeting and it went as per the plan, the CBI alleged. Praveen Kumar also told Sethi about the favourable decision taken during the meeting, it said. In return, Reddy provided his residential address at Chanakyapuri to meet him personally by the end of the week, the agency has alleged.

Praveen Kumar allegedly gave Sethi the go-ahead to pay a total bribe of Rs 9 lakh to Reddy. On her instructions, Dua went to make a partial payment of Rs 4 lakh to the officer on June 20 at his residence for acting in favour of Biocon Biologics, officials told PTI.

Biocon Denies Allegation

Rejecting the allegations, Mazumdar-Shaw said on Monday, "We deny the bribery allegations. All our product approvals are legitimate and backed by science and clinical data. Our Aspart is approved in Europe and many other countries. The regulatory process in India is online and all meeting minutes are in public domain."

A similar statement was issued by the spokesperson for Biocon Biologics. "All our product approvals are legitimate and backed by science and clinical data. Our Aspart is approved in Europe and many other countries. We follow due regulatory process for all our product approvals by DCGI. The entire application process in India is online and all meeting minutes are in public domain. We are cooperating with the investigation agency," the spokesperson was quoted as saying by The Indian Express.

Explaining reasons behind seeking waiver of Phase 3 clinical trials for Insulin Aspart in India, Biocon Biologics said it was based on the Indian regulatory guidance -- Similar Biologics Guidelines 2016 and New Drugs and Clinical Trials 2019.

The guidelines provide a framework for waiver of Phase 3 clinical trials to be conducted in India based on a commitment to undertake a Phase 4 trial, the design of which should be approved by the central licensing authority, it said.

"In line with the above regulations, Biocon Biologics presented a proposal for import and marketing of Insulin Aspart with a waiver of Phase 3 clinical trial in India. The company presented a detailed proposal along with CMC, pre-clinical and clinical trial data," it added.

Biocon Biologics claimed that the subject expert committee (endocrinology and metabolism) in its meeting held on May 18, 2022 at CDSCO, New Delhi, noted that the company has conducted Phase 1 and Phase 3 trials with Aspart in Germany and US, respectively. Based on the results of this global trial, its product Aspart has been granted marketing authorisation by European Medicines Agency (EMA) and Health Canada.

It further told NDTV that the committee recommended grant of permission to import and market the drug with waiver of Phase 3 clinical trial in the country with the condition that the firm should conduct Phase 4 clinical trial in India and submit the protocol to CDSCO before placing the drug in the market, as per existing guidelines.

Reiterating that it strongly condemns all acts of bribery and corruption, the company added, "We adopt global best practices in corporate governance and business responsibility. Besides our employees, all our consultants, suppliers and partners are also bound by a strong code of conduct that has a detailed clause on anti-bribery and anti-corruption."