A damning congressional report fresh off the press Tuesday (Sept. 20) connects the Clinton Foundation and three Indian drug companies – one of which was bought by Mylan NV (Nasdaq: MYL) a decade ago – to a humanitarian scandal…
Since 2002, the drug companies have been providing cheap but allegedly watered-down anti-HIV drugs to various African countries. The report was initiated by U.S. Rep. Marsha Blackburn (R-TN) and prepared over the course of two months.
Blackburn’s dossier claims that the Clinton Foundation – as well as its now-independent subsidiary, the Clinton Health Access Initiative (CHAI) – could be a "sham charity" engaged in "unfair or deceptive acts or practices."
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Here’s the evidence presented in the congressional report…
Like Mylan, This CHAI Drug Company Used Questionable Drug Practices
In 2002, former President Bill Clinton and current Democratic presidential nominee Hillary Clinton became interested in helping AIDS victims in Africa, where access to life-saving drugs has long been a woeful problem, and where infection rates are among the highest in the world. With only 5% of the world’s population, Eastern and Southern Africa are home to half the world’s population living with HIV.
The husband and wife team used their Clinton Foundation and created CHAI. They then partnered with Indian drug companies Ranbaxy Labs, Matrix, and Cipla.
Matrix was bought by Mylan three years later, in 2005, for $736 million. The acquisition occurred in the midst of CHAI’s ongoing work in sub-Saharan Africa.
Of course, Mylan is currently embroiled in a U.S. controversy about its 508% price-gouging of the EpiPen, from $100 in 2009 to $608 today. EpiPens are life-saving devices used to stop anaphylaxis in individuals suffering from severe allergic reactions. Congress compelled Mylan CEO Heather Bresch to testify about the drug's price hike on Wednesday.
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Meanwhile, CHAI-affiliated Indian drug company Ranbaxy Labs is also suspected of engaging in fraudulent practices…
Specifically, the company’s quality control unit was believed to be producing “low potency” – or “watered down” – medicine batches. According to Blackburn’s report on Tuesday, Ranbaxy executives knew about these weak drug concoctions as early as 2004.
In 2006, the FDA sent a public “warning letter” to the company about the irregularities in the company’s quality control efforts. It concluded that the drugs “show much lower potencies in these batches [analyzed by the FDA].”
Still, Ranbaxy continued to dole out the medication.
And the Clinton Foundation knew about the possibly fraudulent behavior the whole time…
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You see, back in 2005, Roger Bate of the American Enterprise Institute wrote about how the Clinton Foundation was making costly errors in its campaign to strike deals with foreign generic drug makers.
The Foundation never responded to these public charges.
Also in 2005, former Ranbaxy employee Dinesh Thakur began encouraging the U.S. government to pursue a lawsuit against the Indian pharmaceutical firm. Because the company sold its generic drugs in the U.S. market, it was vulnerable to prosecution.
Thakur claims to have tried to reach out to the Clinton Foundation multiple times to make it aware of his revelations and never heard back.
Then, fast forward to April 11, 2013, when Bill Clinton praised Ranbaxy for its role in assisting his Clinton Foundation in treating AIDS patients by agreeing 10 years earlier to cut the price of its ARV drugs sold in developing nations. A month after Clinton’s praise, Ranbaxy pleaded guilty to federal drug safety violations, including seven criminal counts with intent to defraud and for introducing adulterated drugs into interstate commerce. The company was fined $500 million to resolve the claims – the largest settlement in history involving a generic manufacturer and drug safety, the Justice Department said that same day.
And while Ranbaxy is now banned from selling its pharmaceutical products in the United States, it continues to manufacture drugs for HIV patients in Africa. Neither CHAI nor the Clinton Foundation have announced they’ve severed ties with the pharmaceutical company.
Up Next
On the morning before Mylan CEO Heather Bresch was taken to task by Congress, Money Morning Capital Wave Strategist Shah Gilani appeared on FOX Business’ “Varney & Co.” to tell viewers exactly how to profit from the Mylan scandal:
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