WASHINGTON — The Coalition for a Prosperous America (CPA) today released a groundbreaking new report documenting that Aurobindo — an Indian generic pharmaceutical manufacturer that is the largest provider of generic drugs by prescription to the U.S. market — has substantial, alarming ties to Chinese companies sanctioned by the U.S., tied to People’s Republic of China (PRC) military industries, or to human rights violations. This includes ties between Aurobindo and a PRC supplier with documented violations of U.S. pharmaceutical regulations.
As first reported by Bloomberg, CPA’s report exposes that “Aurobindo does business with at least four suppliers that have ties to organizations under US sanctions for their connections to China’s military industry.” Additionally, Bloomberg noted that “[o]ne of Aurobindo’s suppliers in China last year was Zhejiang Huahai Pharmaceutical Co.” and that “Aurobindo ordered valsartan, a blood pressure medication, from Huahai. The drug went into shortage five years ago when a probable carcinogen, N-Nitrosodimethylamine, or NDMA, was found in ingredients used to make it that were supplied by Huahai. FDA inspectors found that the China-based company had ignored evidence that the ingredient was contaminated.”
CPA’s report covers Aurobindo’s well-documented, numerous safety and quality issues, as well as instances of corruption and lack of transparency. Aurobindo’s position as the main supplier of generic pharmaceutical prescriptions to the U.S. poses significant legal, safety, and national security concerns. Aurobindo and the Indian pharmaceutical industry’s competitiveness are nearly wholly reliant on the PRC’s ability to produce cheap active pharmaceutical ingredients (API). They cannot increase their production of APIs to match the economies of scale generated by PRC producers.
The report further documents numerous product quality lapses, recalls, corruption, and lack of transparency on the part of Aurobindo and its subsidiaries in India create significant risks. Reflecting prevalent quality control shortcomings, corruption, and regulatory capture in the Indian pharmaceutical sector, inspections and investigations of Aurobindo and its subsidiaries by EU and U.S. regulatory agencies during the past five years revealed significant problems in Aurobindo’s manufacturing process and substandard drugs.
According to the FDA, India’s drug manufacturers perform poorly in inspections, and product recalls are common, despite having the highest number of FDA compliant pharmaceutical manufacturing facilities outside the U.S. Alarmingly, since December 2022, Indian authorities found that more than 65% of Indian Micro, Small, and Medium Enterprises (MSMEs) were manufacturing substandard drugs.
“Not only should Aurobindo’s well-documented safety violations raise serious red flags, but we now know that the largest generic drug provider to the U.S. market is actually a pass-through entity for sanctioned CCP companies,” said Michael Stumo, CEO of CPA. “Aurobindo’s ties to the CCP are alarming, and it is clear that the FDA lacks both the expertise and willingness to protect the U.S. market from the legal, safety, and national security risks posed by Aurobindo. Congress must take action to force the FDA to properly regulate foreign drug manufacturers and pass policies to reshore generic drug manufacturing to the U.S.”
- At least five of Aurobindo’s suppliers have documented ties to the PRC’s military civil fusion policies and/or military industries. The parent companies of four of those five suppliers are under U.S. sanctions for connections to PRC military industries.
- At least two of Aurobindo’s suppliers have a documented history of producing drugs that may fall below quality standards required by the U.S. FDA. This poses risks to the health of U.S. consumers, including both civilians and members of the U.S. military.
- 15 of Aurobindo’s suppliers have documented ties to Xinjiang where the Chinese Communist Party (CCP) has been committing genocide against the Uyghur population. This likely places Aurobindo in violation of the Uyghur Forced Labor Prevention Act (UFLPA), which prohibits imports to the U.S. of any products made in Xinjiang or by members of the Uyghur ethnic group in any part of the PRC as part of programs that the law defines as forced labor.
- Documented evidence demonstrates that 13 Aurobindo suppliers are controlled by ministries and other state entities of the PRC’s central government. PRC laws and regulations mandate companies under central government agencies and ministries support and assist the People’s Liberation Army (PLA). The CCP mandates that these types of companies lead in pursuing Beijing’s priorities communicated through state plans and strategies, including its Military Civil Fusion Development Strategy. The CCP controls such companies — even in cases when it formally only owns a minority financial stake.
- 21 of Aurobindo’s suppliers have documented control by local governments in the PRC. Companies under provincial and county level government control in the PRC mirror elements of companies under central government control and are similarly highly incentivized to promote the CCP’s priorities.