Keeping Counterfeit Pills out of the Pipeline

How policy makers and supply chain leaders can prevent counterfeit drugs from reaching consumers

In 2012, a counterfeit version of the cancer drug Avastin was widely distributed in the U.S. That same year, a shortage of Adderall opened the door for Internet pharmacies to sell a fake version. Last year, the U.S. Food and Drug Administration (FDA) issued a warning to doctors about a counterfeit version of another cancer drug, Altuzan, being distributed in the United States.

As far back as 2005, cancer, anemia and AIDS patients who believed they were taking Procrit to boost red blood cells may actually have injected a potentially lethal substitute – bacteria-contaminated water.

That same year, 84 Nigerian children died after taking a counterfeit teething medication. According to the International Policy Network, as many as 700,000 worldwide have died from malaria and tuberculosis because of counterfeit drugs.

Big Business

Globally, the business of counterfeit and substandard drugs is a profitable one. More than $75 billion in counterfeit drugs alone is sold each year; combined with expired and adulterated drugs, the number climbs to $230 billion. And the problem is worsening.

Today, substandard and counterfeit medicines may account for as much as 25 percent of the drug supply in India, the world’s largest manufacturer of generic drugs. In emerging markets such as Africa, as much as 40 percent of drugs sold are counterfeits, according to the Partnership For Safe Medicines’ Counterfeit Drug Incident Encyclopedia

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More than $75 billion in counterfeit drugs alone is sold each year; combined with expired and adulterated drugs, the number climbs to $230 billion.

Worldwide, ensuring security and traceability of healthcare shipments is of growing importance, especially as the counterfeiting of healthcare products continues to rise. Protecting the international pharmaceutical supply chain (and, by default, the domestic one) calls for uniform global serialization standards, which would allow for interoperable systems visibility.

Synchronizing Regulation

Transparency, collaboration and accountability are critical to any policy, but especially difficult to achieve at the international level. Given the wide scope, an international policy must focus narrowly on the problem being solved: ensuring access to safe medicines and preventing counterfeit drugs from reaching consumers.

Organizations such as the World Health Organization (WHO) are working to establish priorities in the effort to synchronize regulation and improve the safety, efficacy and quality of medicines, vaccines, biomedicines and herbals.

But developing policy is challenging on a domestic level, too. While the U.S. supply chain is widely considered to be the safest in the world, it is still vulnerable.

While not specifically mentioned in the legislation, the concept of pedigree was born in 1987 as part of the Prescription Drug Marketing Act (PDMA) enacted in the U.S. The idea was to set minimum federal standards and document the sale of drugs along their path to ensure they were verified.

However, technology at the time was limited and states retained the authority to create and enforce their own standards. Different states undertook differing approaches, resulting in a patchwork of compliance and enforcement that actually weakened domestic supply chain security. Bad actors would seek states with less restrictive laws to enter the U.S. But this is soon to change.

New standards

Prompted by more than 50 fungal meningitis deaths resulting from quality control problems, President Barack Obama signed into law the Drug Quality and Security Act (H.R. 3204). Title one of the DQSA addresses drug compounding and Title II the Drug Supply Chain Security Act (DSCSA)

The law calls for national standards to track pharmaceuticals through the distribution chain. The law addresses the entire supply chain, from pharmaceutical companies, repackagers and 3PLs to wholesale distributors and pharmacies.

Key elements of the law include:

  • Traceability Requirements: By January 1, 2015, manufacturers, wholesalers, and pharmacies are required to pass transaction history, information, and statements.
  • Serialization: By 2017, manufacturers must serialize packages and homogeneous cases of prescription drugs. By 2019, Wholesalers can’t accept un-serialized products.
  • Item-level track and trace: By 2023, transaction information and statements for all products must be exchanged securely and electronically at the unit level.
  • Verification: Beginning Jan 1, 2015, manufacturers must have systems to verify potentially counterfeit products.
  • Requests for Information: For potentially suspect or illegitimate products, manufacturers must provide transaction information, history and statements within one business day.
  • Licensing: Requires the Secretary to establish standards for the licensing of wholesale distributors and third party logistics providers.
  • Preemption: Preempts state and local requirements related to tracing drugs through the distribution system, and licensure of wholesale distributors and third party logistics providers.

Companies now must be prepared to implement these policies, which involves:

  • Identifying the many pain points;
  • Considering the impact on systems, integration, distribution processes, and costs; and
  • Putting an implementation plan in place.

Implementation won’t be easy, but reducing counterfeiting and ensuring patient safety are important undertakings for policy makers and supply chain leaders.

In many ways, the U.S. is a microcosm of the global community. The intra-national challenges we face in regulating the national supply chain mirror, on a smaller scale, those the global community must tackle to protect the international one.

But here’s a question: Legislation notwithstanding, could the market drive pharmaceutical supply chain safety? I think it could.

Without the legislation to uniform standards, get rid of the patchwork of licensing, and preempt states, the uncertainty prevented the market from innovating. Business wouldn’t risk it. Now that the law is established, business can plan and execute, which we, as well as others are doing. No need to wait 10 years if you know where you need to be. goldbrown2

Robin Hooker, Director of Healthcare Marketing at UPS, recently joined HealthCare Consumerism Radio to discuss how the shift toward patient-centric care is affecting all participants in the health care system. Today, patients are choosing more direct-to-home deliveries; walk-in clinics, such as CVS Minute Clinic and MedPost Urgent Care, are on the rise; the middle class and aging populations in emerging markets are growing. Learn more by listening above.

Chip Meyers serves as vice president for corporate public affairs for UPS in Washington, D.C. Meyers represents UPS on the Pharmaceutical Distribution Security Alliance (PDSA) board and was active in the passage of H.R. 3204 (The Drug Quality and Security Act).

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