A Rogue CRO Employee, a Suspect Spreadsheet, and now a $50m Lawsuit Against FDA

Regulatory News | 29 January 2018 | By Zachary Brennan

Back in April 2016, the US Food and Drug Administration (FDA) put out an alarming notification to sponsors of new drug applications (NDAs) and abbreviated new drug applications (ANDAs) that clinical and bioanalytical studies conducted by Bangalore, India-based contract research organization (CRO) Semler Research "are not acceptable as a result of data integrity concerns."

FDA's notification created a domino effect whereby the World Health Organization (WHO) and the European Medicines Agency (EMA) also said they began investigations into and took action against Semler.

But now, Semler, while acknowledging the falsified data, is trying to explain what happened, how FDA built its case against the CRO, how other regulators blindly followed FDA, and why Semler is seeking $50 million in damages from the US agency, according to a lawsuit filed in the US District Court of the Central District of California earlier this month.

Semler's Perspective

On 29 September 2015, FDA inspectors launched the surprise 10-day inspection of the Bangalore facility involved with conducting bioequivalence (BE) and bioavailability (BA) studies, which Semler says FDA told them would be "to verify the computer validation and related aspects of BA/BE testing."

At the time of the inspection, Semler says FDA had already approved at least eight generic drugs for the US market and for which Semler had conducted the BA/BE study, a clinical study or both, and of these eight, Semler says FDA inspected one of its facilities six times.

During this surprise inspection, however, FDA uncovered an Excel spreadsheet that the company claims was "what they were looking for from the start," and the head of Semler's quality affairs department said she "had never seen it before, and would have to look into it."

So what was in this spreadsheet, which Semler refers to as "the Suspect Spreadsheet"?

The company says that back in 2015, while other Semler employees were at lunch, someone accessed the company's server, entered fabricated data in this spreadsheet and that the move was a deliberate undercutting of Semler as the employee was working with former Semler employees now working for an unnamed CRO competitor in Bangalore.

"In summary, the fabricated data set forth in the Suspect Spreadsheet was believed to have been created and placed on within [sic] the Suspect Spreadsheet by a rogue employee whom was acting in concert with a group of former employees of SRC [Semler] that were working for a competing CRO in Bangalore, India after the BA/BE head (and the person who started the new CRO) had parted ways with SRC," the lawsuit says.

On the basis of the spreadsheet, Semler claims that "FDA concluded there were serious inconsistencies in the research conducted by SRC and asked SRC to explain the reasons for the Suspect Spreadsheet and to justify that the information of the Suspect Spreadsheet is false."

But an independent audit, the results of which were sent to FDA in January 2016, "revealed no evidence of data manipulation and confirmed that all Standard Operating Procedures and study specific protocols were followed, and in the rare instance there was a deviation it was documented and explained and had no impact on the results of the study," Semler says in the lawsuit. "Further, it was again presented to FDA that the Suspect Spreadsheet was not representative of data tracking or collection by SRC, was not authorized or reflective of the results of the identified studies, and was believed to have been planted on SRC's server."

Regulators Take Action

But by April 2016, FDA sent an untitled letter to the company and then took action on informing companies relying on Semler and other regulators of what happened. The other regulators, meanwhile, saw FDA's action and followed suit.

WHO and EMA withdrew their respective prior approvals of generic pharmaceuticals whose studies had been conducted by Semler, though EMA left on the market generic drugs deemed necessary for the public despite Semler's work on the studies.

Semler also contends: "EMA never conducted any inspection but only relied on FDA's claims and April 19, 2016 letter to conclude adversely ... On the basis of the conclusions of WHO, EMA, and the FDA, several other countries' governing bodies regarding pharmaceutical testing, such as the Ministry of Health of Malaysia and the customers of SRC are rejecting the studies conducted by SRC and demanding compensation from SRC. These companies include, without limitation, Lupin Limited, Microlabs Limited, Dr. Reddy's Limited, and Inventia Healthcare Pvt Ltd.

"Further, while FDA's adverse observations were only in case of certain studies, other regulatory agencies have doubted the credibility of all the research that was conducted by Plaintiff, even though they were not a part of the studies with respect to which the FDA had doubts about credibility of the research, because FDA made a blanket determination that none of the research conducted by SRC was reliable," Semler says.

As a result of what Semler says are FDA actions taken without providing it "any due process, with the intent to inflict financial distress, with the intent to intentionally interfere with SRC's economic advantage, and without reasonable care and diligence" mean Semler could not be sold, which it claims was worth about $30 million, and further exposed the company to claims from former clients of $20 million.