Locking truck doors is one of many simple
solutions for protecting drug shipments.
Photo courtesy of Stiefel Laboratories.
By Angelo De Palma, Ph.D., Contributing EditorProtecting an ever more complex pharmaceutical supply chain has become one of the industry’s greatest challenges. Drugs worth many times their weight in gold, coupled with huge price discrepancies between U.S. and foreign markets, have spawned illegal profiteering operations that threaten manufacturers and patients alike. The assurance that consumers receive prescribed drugs, at the prescribed dose, at an appropriate price is a cornerstone of the U.S. health system. Counterfeiters, diverters, importers, and compounders skim anywhere from five to ten percent—nobody knows the exact number—off the top of this $200 billion enterprise. The World Health Organization estimates that five to eight percent of the world’s drug supply is counterfeit.
(Anti-)Diversionary Tactics Differential pricing from one country to another puts pharmaceuticals at high risk of diversion, or “gray marketing,” by which unscrupulous distributors or resellers purchase product intended for one geographic location and resell it into a higher-price region. “It’s a form of illegal arbitrage,” says Henry Kupperman, an attorney and senior managing director at Kroll, Inc. (New York, N.Y.), an investigative and security consulting firm. Internet ordering of single prescriptions makes diversion even more profitable than in years past, says Kroll, because diverters don’t need to find a wholesale buyer. “Diverters don’t have to ship product back to high-price countries at all before selling it.” Manufacturers have already taken precautions against early supply-chain diversion by exercising extreme caution in whom they sell to. Controls lose their effectiveness beyond the large distributor level, however, eventually disappearing as product trickles downward. Know who you’re selling to. Perform background checks on individuals and companies making overseas purchases: Do they have a history of selling diverted product? “Diverted product is usually the result of a distributor who has not been investigated,” Kupperman says. Deploy a product-level (vs. package-level) tracking system. A good tracking system begins with lot numbers, but should also include at least a serial number and/or barcode. There have been cases where manufacturers knew their product was being gray-marketed, but they couldn’t figure out the overseas source because gray marketers usually repackage. Institute a mechanism for both announced and unannounced distributor audits, especially for repeat purchasers of large shipments such as hospitals and government agencies. The larger the shipment, the greater the chance of diversion. Be on the lookout for disproportionately large sales, especially overseas. If it seems too good to be true, it probably is. Involve your distributors in manufacturing’s efforts to prevent diversion because regulators and law enforcement are more concerned with counterfeiting. “Gray marketers are very clever—in some ways more devious than counterfeiters,” Kupperman observes. He recalls a case where an overseas diverter convinced a distributor to sell very large quantities of product for distribution in Russia. This individual actually did import the shipment to Russia, but then had it shipped across Siberia to an eastern port—then exported it from there to the more lucrative U.S. West Coast market. |
Physical pharmaceutical security measures come in three flavors:
- Covert: measures invisible to humans or requiring special equipment for reading or detection, including water marks, inks and fluorescent dyes, as well as RFID and barcoding;
- Forensic or analytical: techniques, typically involving markers, that require sophisticated analysis;
- Overt: visible protective measures such as holograms, color-shifting dyes, and water marks, seals, labels, and packaging.
Particularly thorny issues include:
- software validation
- database population
- deployment of RFID at different packaging levels
- data authentication at all points where people access the database
'Security requires |
- Use generic shipping cartons and plain, tamper-evident tape so your packaging doesn’t scream “Valuable!”
- Work with dedicated, trustworthy carriers. They may be more expensive, but the extra cost pays off in the long run. Avoid delivery companies that stop several times between your loading dock and the distributor, or that mix shipments of your product with those of other companies.
- Make sure that, when shipping truckloads, the truck is sealed, and ensure that this is indicated on the bill of lading so that your customer can verify that the entire shipment has been sealed during delivery.
- Ensure that your packing slips are well designed. Packing slips may be old-fashioned, but a well designed ticket can eliminate 90 percent of shipping uncertainties. Make sure customers have access to back-end information that they can match up, either visually or through computer-generated symbology, with information on the slip.
- Use advanced ship notifications to alert customers of a product shipment and estimated time of arrival, so deviations or delays may be noted and reported.
- Use pallets for very large shipments. Protect pallet and product with clear stretch wrap in the case of plain boxes, or with opaque wrap when boxes contain either company or product identification.
- Shipments of commonly abused drugs require another level of security efforts, but there’s no need to panic or over-finesse such shipments. Plain shipping containers and tamper-evident tape can go a long way towards assuring product anonymity during shipping.
- When shipping narcotics, audit carriers thoroughly. Check with local chambers of commerce, the Drug Enforcement Agency, and local and state police to uncover incidents where product has “fallen off the truck” or otherwise been diverted or stolen. Also investigate terminals the proposed carrier works through for similar warning signs of less-than-complete trustworthiness.
Ortho Biotech Responds to a Counterfeiting Crisis
Teamwork and close coordination with FDA allowed Ortho Biotech to design a new secure package, set up and validate new packaging lines and “redress” $1.2 billion worth of Procrit inventory in three weeks
By Agnes Shanley, Editor-in-Chief
It was news that no drug company ever wants to hear. In June of 2002, Johnson and Johnson’s (J&J) Ortho Biotech Products (Raritan, N.J.) first got word that vials of suspect Procrit, its blockbuster anemia medication, had surfaced in Texas. FDA’s Criminal Investigations Unit found a supply of product, retailing for about $20 per vial, relabeled as a concentrated version, worth 20 times as much. Later, in Florida, FDA found a cache of Procrit vials containing tap water during an undercover investigation.
Fortunately, this material had not reached the pharmacy shelves, but Ortho needed to protect a key product, with annual sales of over $3 billion, and it needed to move at breakneck speed.
John Dempsey, Ortho’s vice president of national accounts and patient advocacy, immediately set up a core team to alert doctors, pharmacists, and patients, and to develop an overall response strategy. FDA was a vital part of this team, which also worked with corporate management and customers.
Once the first team defined a list of goals and objectives, a second team headed by package development engineer Elizabeth Hansen was set up to “redress” existing inventory. This cross-functional team involved representatives from quality assurance and control, regulatory compliance, manufacturing, packaging, development, engineering, legal and financial departments.
At its first meeting on June 5, four days after the initial notification, Dempsey laid out the problem scenario to the team: Ortho had $1.2 billion in inventory that couldn’t ship without counterfeit-proof packaging. “We needed to come up with a solution and implement it to redress that inventory, some 2.4 million doses of Procrit, in 20 days,” Dempsey recalls. “The room was quieter than a church. You could have heard a pin drop,” he says.
Communication and “the right people”
The team approached this challenge as it would any other critical project with a tight deadline and an important due date, says Hansen. Communication was constant. The team met twice every day, once in the morning to discuss the goals for the day, and in the afternoon to go over the day’s achievements.
The key was to involve people with the right background,” Hansen says, “and we knew that the solution would involve manufacturing.” The team needed to have a packaging line in place at its distribution center, and it needed equipment for this line.
Members from project engineering were charged with finding, installing and, where necessary, retrofitting the equipment. Meanwhile, packaging engineers had to develop a counterfeit-proof packaging. Operators had to work efficiently and to ensure that the drug was maintained at the right refrigerated temperature. The system also had to be approved by FDA and validated. Given the timeframes normally required for these activities, the task seemed impossible.
However, the team’s members solved problems in parallel, moving the project forward. “On the packaging side, we looked at the available technology and ruled out some technologies, such as holograms, which would take too long to develop,” Hansen says. They eventually settled on a solution involving overt and covert features: a package with a closure seal featuring color-shifting ink and a digital watermark.
Management support was critical
Corporate management was very supportive, a fact that made it easier for team members to focus on the job at hand, Hansen says. “We were told by senior management that this effort was extremely important and were freed from other tasks to focus our efforts and put the others on a back burner.”
Manufacturing issues posed major challenges. None of J&J’s existing packaging lines would be able to handle the redress. Two new machines, a bundler and a labeler, were required. Under normal situations, it can take eight to 12 months to source this equipment. Senior Engineer Henry Passerotti and his team found a used labeler in Chicago. A bundling machine was found at another Ortho facility. The labeler had to be retrofit to apply the new package’s closure seal, and the entire system had to be operational within days.
Another technical hurdle was selecting the best security ink required for the seal. “It’s not an easy ink to run in a typical package printing operation,” Hansen says. “We had to run several tests to ensure that the final formulation was OK. Within one week, we had 10 test runs, and, in every case, we’d determine problems, go back to the laboratory and work with the supplier and adjust the formula.”
Legal’s participation eased validation
Validation was simplified by a comprehensive legal brief drafted by Ken Olson, Ortho’s legal representative on the team, and used to make the validation case to FDA. “All we needed to do was dot the i’s and cross the t’s to move to validation,” says Dempsey. The fact that the team worked so closely with FDA from the start was critical to its success, he says.
J&J already had experience with illegal product tampering after the infamous Tylenol case in the early 1980s. Many of the corporation’s security staff are former law enforcement agents, and the company has strengthened its connections with law enforcement, and with FDA counterfeiting task force members at headquarters and field offices.
Although the company remains vigilant in protecting its products against counterfeiters, Dempsey and Hansen are proud of their colleagues’ achievements. The first repackaged product lots were ready by July. “Developing a new package design and bringing production online so quickly was unprecedented,” says Dempsey. “We had the right people to do the job.”