Explained: What is the Biocon bribery case linked to a drug trial waiver bid?

CBI last week arrested the Joint Drug Controller (JDC) with Central Standardized Drug Control Organization (COSCO), S Eswara Reddy, while accepting a bribe of Rs 4 lakh from a representative of a Delhi-based company. The investigation agency claimed that the actor was Paying a bribe to get some files related to Bengaluru-based Biocon Biologics Ltd It is approved by the central regulatory body. She even arrested the company’s associate vice president, Praveen Kumar. However, the drug company promoted by Kiran Mazumdar Shaw denied the allegations.

What is the case?

The CBI claimed it had received information that Dinesh Dua, director of the Delhi-based Synergy Network India Pvt Ltd, was negotiating bribes to waive Phase III trials for Biocon’s Insulin Aspart Injection among other files, and was scheduled to visit Reddy’s residence in Chanakyapuri on 20 June. To hand over part of the negotiated bribe amount of Rs 9 lakh.

CBI claimed to have set up a trap and arrested both while exchanging bribes of Rs 4 lakh. She subsequently arrested El Praveen Kumar of Bengaluru; Guljit Sethi aka Guljit Choudhury, Director, Bionovate Research Services Private Limited, Delhi; And Assistant Pharmaceutical Inspector at CDSCO, Animesh Kumar.
According to CBI FIR, Reddy had three files from Biocon Biologics Ltd pending with him for a permit. Sethi’s Bioinnovate used to handle Biocon’s regulatory affairs alongside several pharmaceutical companies and regularly paid kickbacks to obtain regulatory approvals, the agency claimed.

Bioinnovate had business relationships with Dua’s company, Synergy Network, and Sethi had asked Dua to bribe Reddy to give up on Biocon’s Phase 3 trials Insulin Aspart Injection.

“Sethi… has conspired with Shri L Praveen Kumar, Associate Vice President and Head of National Regulatory Affairs (NRA) and other senior executives of M/s Biocon Biologics Limited, Bangalore to pay a total bribe sum of Rs 9 lakh to Dr. S Eswara Reddy for Positive handling of the three said files related to M/s Biocon Biologics Limited, Bangalore and also to the positive recommendation of the “Insulin Aspart Injection” file to the Competent Expert Committee (SEC) meeting on 18.05.2022,” the CBI FIR has said.

What is the role of the joint drug monitor?

According to the CBI, JDC S Eswara Reddy attended the SEC meeting on May 18 and supported the waiver of a phase 3 clinical trial of Biocon’s “Insulin Aspart Injection.” The agency alleged that Reddy tampered with the minutes of the May 18 SEC meeting by changing the word “data” to “protocol” in the recommendations “and thus causing significant illicit gains to M/s Biocon Biologics Limited.”
According to the CBI, Sethi colluded with Reddy, Animesh Kumar and other unidentified CDSCO officials to include the third file from Biocon for the June 15 SEC meeting. SEC meeting for which Sethi paid Rs 30,000 as illegal gratification.

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The CBI also said Dua met Reddy at the CDSCO office on June 15 regarding approval of the third file during the SEC meeting scheduled for the same day and Reddy confirmed to Reddy a positive decision at the SEC meeting.

How is Praveen Kumar tied up in Biokon?

The CBI claimed that under Kumar’s directions, the entire bribery operation was carried out. It has claimed that on June 15, Praveen Kumar informed Guljit Sethi that the profile of Biocon Biologics Limited had been approved at the SEC meeting.
The investigation agency alleges that during his meeting with Dua at the CDSO office that day, Reddy gave his new residential address in Chanakyapuri and asked him to meet there at the end of the week.

“The information has also revealed that Shri L Praveen Kumar… has agreed to pay a total of Rs. 9,00,000 bribe amount as motivation/reward to Dr. S Eswara Reddy… to treat the company’s files positively. Guljit Sethi directed Dinesh Dua to hand over part of the The agreed bribe amount on behalf of the company to Dr. S Eswara Reddy at his residence,” CBI FIR said.

How did Biocon react?

Rejecting the allegations, Kiran Mazumdar Shaw said, “We deny the bribery allegations. All of our product endorsements are legitimate and backed by scientific and clinical data. bAspart (insulin injection) is approved in Europe and many other countries. The regulatory process in India is done online and all minutes of the meetings are publicly available.”

A similar statement was issued by a Biocon Biologics spokesperson who added that the company is cooperating with the investigation agency.

What is the status of the investigation?

Despite it being a trap case where a high-ranking government official was caught accepting a bribe in flagrante delicto, the courts did not grant the CBI custody of the accused for more than one day. In fact, the Court of First Instance refused to grant custody of L Praveen Kumar to CBI even for a day after he was brought to Delhi in transit remand from Bengaluru. All the accused are currently in judicial custody.
CBI has now contacted the Delhi Commission to claim their custody. The High Commissioner has issued notices to all concerned and will hear the matter next month.

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