Drug Makers Fight Back!

Agnes Shanley, Editor in Chief

New Technology, Packaging and Distribution Are Helping in the Battle Against Counterfeits

In the old frontier days, and for decades after, snake oil salesmen sold dangerous medicines to the American public. It took over one hundred deaths from a toxic cold syrup 65 years ago to set the standards that have made the U.S. pharmaceutical supply one of the safest in the world.

Today, manufacturers are arming themselves with new technology and packaging, auditing suppliers and distributors, and going beyond current Good Manufacturing Practices (cGMP) standards to protect this bastion from a new generation of snake oil salesmen: drug counterfeiters, who now command a global market worth up to $50 billion.

Despite stringent cGMP regulations, criminal penalties set by the Prescription Drug Marketing Act (PDMA), and reporting requirements set by Sections 321 and 322 of the Bioterrorism Preparedness Act, counterfeit drugs are a growing business in the U.S.

Within the last two years, the number of cases investigated by the Food and Drug Administration (FDA) increased nearly four-fold (Table 1).

Not only mom-and-pop shops, but organized crime and terrorist networks are players in this shadowy underworld. (Box)

As they ape the marketing, packaging and distribution schemes of legitimate producers (Photo), the impact of their products can only be guessed at.

This counterfeit product mimicked features down to the blister packaging of the original. Photo courtesy of FDA


The World Health Organization estimates that counterfeit pharmaceuticals account for 7 to 10% of the world market. In some countries, including China, India, and the Philippines, fake drugs make up nearly half of all the medicines sold. In Mexico, a prime destination for U.S. citizens looking for bargains in prescription medications, between 25% and 40% of medicines are currently believed to be counterfeit materials coming mainly from China.

Security analysts fear that we're seeing just the tip of the iceberg. "While the evidence is only anecdotal, it's clear that thousands of people in the U.S. are being harmed each year by medicines they've bought illegally on the Internet,"says Neil Livingstone, CEO of the security consulting group Global Options Inc., Washington. The organization tracked over 307 Internet sites selling pharmaceuticals as part of a comprehensive study of threats to the U.S. pharmaceutical industry that was published last spring (www.globaloptions.com\booktext2003.pdf).

FDA has begun several hundred investigations and arrested people involved in 60 websites. However, few data have been gathered. "Neither FDA nor the Department of Homeland Security (DHS) have paid enough attention to these issues," Livingstone says.

FDA admits that vulnerabilities continue to run throughout the supply chain. Imported raw materials remain one Achilles heel, since over 80% of active pharmaceutical ingredients (APIs) used in the U.S. are imported. "There's a big risk on the manufacturing end in areas of the world where there is less oversight and monitoring of ingredients,"says Myles Culbertson, director of New Mexico State University's Physical Science Laboratory (PSL). The laboratory is a prime contractor for Product Surety (www.productsurety.org), a working group involving industry and FDA that is developing risk assessment criteria, evaluating technologies and helping define best practices.

One problem is that counterfeits of any kind may be mixed into shipments of legitimate products. In addition, pedigree information, the documentation tracking a supply source, may be incomplete or fraudulent. "Someone buying primary ingredient may not know where it's really come from," Culbertson says, "It's less of an issue for U.S. manufacturers, but U.S. buyers still have to be careful."

Questionable Pedigrees
"There's no way to guarantee the chain of control---pedigrees are easily forged, and background checks are not required," says Livingstone. FDA lacks the resources needed: "A System Overwhelmed," title of FDA testimony before the U.S. House of Representatives last June, says it all. Currently, only 180 of FDA's 430 full-time inspectors are deployed to inspect offshore manufacturing facilities, something they're required to do every few years. The Senate's commerce committee has questioned the Agency in the past about its backlog of GMP inspections. As of 2000, some 4,600 facilities shipping to the U.S. hadn't been inspected.

Meanwhile, inspectors at the back end of distribution, monitoring suspicious packages that arrive in the mail, can only keep up with a trickle of the flood of illegal pharmaceuticals---some two million packages a year---arriving in the U.S. In addition, information technology problems have plagued FDA's computerized import-tracking system, the Operational Administrative System for Import Support (OASIS) in the past, making it difficult for manufacturers to file data, and for FDA to analyze them. The Agency has been overhauling the system to address these issues.

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