The CBI has arrested Joint Drugs Controller S Eswara Reddy, Associate Vice President of Biocon Biologics L Praveen Kumar and three others in a case of bribery to waive Phase 3 clinical trial of ‘Insulin Aspart' injection, a product developed by the company to manage Type 1 and Type 2 diabetes.
Biocon Biologics, a subsidiary of Biocon, however, denied the allegations of bribery. Biocon is led by billionaire entrepreneur. Kiran Mazumdar Shaw.
Besides Reddy and Kumar, the CBI has also arrested Dinesh Dua, director at Synergy Network India Private Limited, who allegedly gave Reddy Rs 4 lakh bribe, Guljit Sethi, an alleged conduit of Biocon Biologics, as well as Assistant Drug Inspector Animesh Kumar in the case, officials said. Reddy, posted at the Central Drugs Standard Control Organisation (CDSCO) here, and Dua were apprehended 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.
They were formally arrested after necessary paperwork and would be produced before the special court soon, the officials said.
The CBI has booked all the five accused under Indian Penal Code (IPC) Sections of criminal conspiracy, cheating and forgery besides provisions of Prevention of Corruption Act. A spokesperson for Biocon Biologics refuted the allegations.
In its FIR, 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.
The bribe was meant 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 trials are 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.
Tracking Reddy’s activities, the CBI also 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.
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 said.