DRUG DISCOVERY/DEVELOPMENT/DELIVERY

Counterfeit prescription drugs and the threat they pose to global health: Defining the terms

Masters UK

Counterfeit prescription drugs are actually a subset of the broader problem of substandard pharmaceuticals. According to WHO, substandard pharmaceuticals are those “manufactured below established standards of safety, quality and efficacy.”1 The term ‘counterfeit drugs’ itself includes several types of fraudulent drugs. Counterfeit drugs include:

• Completely fake drugs;
• Relabeled drugs which result in misrepresenting the dosage, origin, and/or expiration date;
• Repackaged drugs;
• Diluted drugs;
• Drugs without any active ingredients or insufficient amounts;
• Drugs with incorrect ingredients and/or amounts;
• Otherwise adulterated drugs.

Scope of the problem.

While precise figures are impossible to calculate, WHO estimates that at least 10% of the world’s prescription drug supply is counterfeit.2 Each region of the world and all countries are affected, but counterfeits are especially prevalent in developing countries. WHO estimates that approximately 25% of prescription drugs in developing countries are counterfeit with the rate as high as 50% in some countries.3 Unfortunately, this very real threat to global health will not disappear any time soon. In fact, it will only get worse in the next few years. The Centre for Medicines in the Public Interest predicts sales of counterfeit drugs will reach $75 billion globally by 2010; this represents an astonishing increase of more than 90% compared to 2005.4 Even with the world’s most secure supply of prescription drugs, counterfeits are increasingly infiltrating the US market. While the rate of counterfeit drugs entering the US supply-chain is still relatively low, the recent increase in the number of occurrences has caught the attention of the US Food and Drug Administration (FDA).

Perhaps even more frightening than the number of detected cases of counterfeiting and actual data on such activity is the fact that they represent only a tiny fraction of the true amount of counterfeiting activity occurring globally. Identified incidents of counterfeiting are significantly underreported.5 Even when pharmaceutical manufacturers detect counterfeit versions of their drugs, they generally do not disclose their findings for fear of negative publicity and loss of consumer confidence in their products.6 As a result, it is impossible to even estimate the prevalence of counterfeit drugs on the global prescription drug market with any semblance of accuracy. However, in light of the huge profits to be made, together with the relatively minor criminal penalties for those who are caught counterfeiting in much of the world, it is safe to conclude that even the best available estimates are likely quite conservative in relation to the true quantity of counterfeit drugs infiltrating the global drug market.

Drugs most often counterfeited

While any of the approximately 14,000 prescription drugs on the market today, both branded and generic, may be counterfeited, expensive injectable drugs used to treat patients suffering from life threatening illnesses such as cancer, AIDS, or undergoing organ transplants are the most often counterfeited. The reason for this is simple – enormous profit. For example, a box of Epogen with a strength of 2,000 units may sell for $258; however, relabeled as 40,000 units, that same box sells for approximately $4,570.7 One recent investigation uncovered a shipment of 11,000 boxes of counterfeit Epogen and Procrit that resulted in a profit of $28,000,000 to the counterfeiters.8 The amount of profits earned in the sale of counterfeit prescription drugs rival those earned in narcotics trafficking, yet the criminal penalties are often negligible in relation to the devastation wrought in economic and especially public health terms.

Although the quality of counterfeit drugs varies widely from crude mixtures of glue, chalk, and sugar to exceptionally sophisticated replicas that are nearly chemically identical to the originals, it is still nearly impossible to distinguish most counterfeit drugs from the originals with a simple visual inspection. Counterfeit packaging and the drugs themselves often look identical to authentic products. Essentially, there are two methods of verifying the authenticity of prescription drugs. The first is by conducting a full chemical analysis; of course, this is not a feasible option with respect to the entire supply of prescription drugs entering the global market. The second is by requiring pedigree papers to accompany all sales of drugs along the supply-chain with drug wholesalers authenticating their drugs’ pedigree papers and provenance. Unfortunately, pedigree papers are not required in most of the world.

Today’s Counterfeiters

Many counterfeiters now possess the technical expertise to manufacture near perfect fakes that are almost indistinguishable from authentic products. Counterfeit drugs produced by criminal groups as well as those made by less sophisticated counterfeiters, who still make up the majority of counterfeiters globally, often enter the supply-chain through unscrupulous or outright criminal drug wholesalers. However, many legitimate wholesalers9 also, both knowingly and not, assist counterfeit drugs in infiltrating the drug supply by failing to perform the necessary due diligence to verify the origin and chain-of-custody of drugs that they distribute, or otherwise fail to authenticate them.10 Although drug counterfeiters are located in every region of the world and just about every country, the world’s most prolific producers of counterfeit prescription drugs are based in:11

• China
• India
• Nigeria
• Russia
• Brazil
• Southeast Asia
• Latin America

Consequences of Counterfeit Presc ription Drugs

The obvious result of patients consuming counterfeit drugs that are not chemically identical to the genuine product is that patients are not actually being treated with the intended medicine. Unfortunately, many counterfeit drugs do not merely lack efficacy but actually contain dangerous ingredients or combinations that may worsen patients’ condition or actually result in new illnesses or health problems. Thousands of people are killed each year by consuming dangerous counterfeit drugs.12

An even more serious threat to public health posed by counterfeit drugs is drug resistance by some of the world’s most lethal infectious diseases such as malaria, tuberculosis, and AIDS.13 The reason for this is that most counterfeit drugs contain incorrect amounts of a drug’s active ingredient. The weaker strains of the causal agent are killed; however, the drug resistant strains are allowed to multiply and adapt.14 To illustrate this point, 85% of the malaria drugs in Nigeria are believed to be ineffective counterfeits.15 As a result, malaria deaths have double over the past 20 years to 1.5 million deaths a year because substandard drugs have allowed the disease to become more quickly resistant to a succession of drugs.16

Combating Counterfeit Prescription Drugs Introduction

The FDA, WHO, and the State of Florida all agree that the fundamental reasons for the recent proliferation of counterfeit drugs include inadequate licensing standards for drug wholesalers; lax governmental oversight of wholesalers and other members of the drug supply-chain; and insufficient criminal penalties for producing or distributing counterfeit drugs.17 The FDA announced several new regulatory measures intended to safeguard the nation’s drug supply that will take effect in January 2007.18 The State of Florida, however, has already enacted tougher new laws and regulations governing the sale and distribution of prescription drugs within the state.

Florida at the Forefront of Global Drug Safety

In response to the counterfeit drug epidemic, the State of Florida has recently enacted new laws and administrative regulations addressing pedigree papers for all prescription drug sales; stricter licensing standards for drug wholesalers operating in the state; and more severe criminal penalties for counterfeiters. Florida’s new regulatory framework puts it at the very forefront of global drug safety. Florida’s pedigree papers requirement is the most stringent in the entire United States,19 and its licensing standards for prescription drug wholesalers are among the most demanding anywhere. According to health care experts, it is now safer to consume prescription drugs purchased in Florida than almost anywhere else in the world.20

Florida’s Pedigree Papers Requirement

Florida was the first state in the nation to require a complete pedigree of each drug sold or distributed within the state. A pedigree paper for prescription drugs is a statement of origin that identifies each prior sale, purchase, or trade of the drugs. Florida requires that its pedigree papers include:

• Amount, dosage form, strength, and lot numbers;
• Name and address of each purchaser;
• Shipping information;
• Signature and license number of person certifying delivery or receipt of drugs;
• Date of each transaction;
• Telephone number of each purchaser;
• Signature certifying that the pedigree paper was verified.

Florida’s pedigree papers requirement allows state regulators as well as all members of the supply-chain to track prescription drugs from the manufacturer to the point they are dispensed to the ultimate end-user. Such information provides each purchaser the ability to verify the authenticity of the drugs purchased as well as the ability to make an informed determination as to whether the parties who handled the drugs prior to purchase are properly licensed by the state and thus possess the necessary expertise to handle, store, and otherwise safeguard the drugs to ensure their continued efficacy and prevent spoliation.

Florida’s Stricter New Licensing Standards for Drug Wholesalers

Florida’s new prescription drug regulatory scheme is not limited to simply meticulously tracking the movement of prescription drugs from manufacturer to end-user. It also includes very demanding licensing standards for prescription drug wholesalers who want to operate within the state. Some of the more notable new requirements include obtaining a $100,000 surety bond, maintaining at least $2,000,000 of liability insurance, and having at least one designated representative on staff who, in order to be granted such title by the State of Florida, must undergo an extensive criminal background check, pass a rigorous written examination, and possess at least two years of experience in the pharmaceutical distribution business.21

Florida’s new licensing requirements for prescription drug wholesalers have been extremely effective in reducing the number of authorised wholesalers operating in the state, primarily by denying licenses to the unqualified and unscrupulous. Since the new requirements went into effect in late 2005, the number of licensed prescription drug wholesalers in the State of Florida decreased 31% from 1,409 in June 2003 to 972 in October 2005.22 Additionally, the number of in-state and out-of-state licenses declined 52% and 22%, respectively.23 This dramatic reduction in the number of licensed prescription drug wholesalers operating within the state, as well as the decline in the number of valid licenses issued and outstanding, are very positive developments in the battle to secure the prescription drug supply. Florida’s tougher new standards are successfully filtering out those individuals and companies who should not be a part of the pharmaceutical distribution industry, due to a lack of technical expertise, industry experience, and/or overall integrity.

Compliance with Pedigree Papers Requirement

The requirements under Florida’s pedigree papers law are the most demanding in the USA, and even exceed what the FDA requires under the federal law. Florida requires complete pedigree papers on every sale or other disposition of prescription drugs along the supply-chain from the manufacturer to the end-user. Companies such as Masters strictly comply with Florida’s stringent pedigree papers law. Masters performs the necessary due diligence to authenticate the pedigree papers that accompany the prescription drugs it acquires in the course of its distribution operations. In addition, Masters ensures that each of its drug shipments contain complete and accurate pedigree papers necessary for its customers to perform their own due diligence on the origin and provenance of drugs purchased.

New Licensing Standards

Masters has successfully met the rigorous licensing standards for prescription drug wholesalers recently enacted by the State of Florida and thus is duly authorized and licensed by Florida to sell and distribute prescription drugs. Approximately one-third of all drug wholesalers licensed by Florida under the old standards could not meet the new standards for licensure in Florida and, as a result, are no longer licensed to operate within the state.

Florida’s new prescription drug wholesaler licensing standards focus primarily on two crucial areas necessary to minimise the threat of counterfeit drugs infiltrating the supply-chain and properly safeguarding authentic drugs:

• Legitimate drug wholesale operations/overall integrity;
• Necessary technical expertise and experience in properly handling and safeguarding prescription drugs;

Masters goes even further than required by Florida law to ensure the integrity of its workforce and operations. Masters requires that all its employees pass a US Drug Enforcement Administration background check as well as randomly administered drug tests.

Proper Handling, Storage, and Safeguarding of Drugs

Counterfeit drugs are not the only threat to the safety of the drug supply addressed by Florida’s new licensing standards. Authentic drugs themselves may lack their original efficacy and otherwise be degraded if not handled and stored properly. To ensure that each licensed drug wholesaler possesses the necessary technical expertise and industry experience to properly safeguard prescription drugs, Florida law now requires each wholesaler to have at least one designated representative (DR) on staff full time and located on premises during business hours. To qualify as an authorised DR, a person must pass a thorough criminal background check; obtain a satisfactory score on a rigorous written examination testing one’s knowledge of safeguarding product integrity and laws relating to the drug distribution business; and possess at least two years of experience in the prescription drug distribution business.

Masters naturally has a number of DRs on staff at all times to ensure that its drugs are properly handled, stored, and safeguarded. Additionally, Masters has state-of-the-art warehouse facilities with all the necessary climate control equipment to properly store climate sensitive drugs. Our warehouse is a secure facility that employs various redundant intrusion detection and repulsion technologies to ensure that access is strictly limited to authorised personnel only.

About Masters

Masters is a licensed and authorised prescription drug wholesaler by the State of Florida that strictly complies with the state’s pedigree papers requirements. Masters also employs several industry best practices that even exceed what Florida law requires. Accordingly, one can be assured of the authenticity, proper safeguarding, and compliance with appropriate chain-of-custody procedures of all prescription drugs accompanied by Florida pedigree papers purchased from Masters.

Contact:
Masters,
380 Centennial Avenue,
Centennial Park, Elstree,
Hertfordshire
UK WD6 3TJ
Telephone: +44 (0)208 327 0900
Facsimile: +44 (0)208 327 0901
Email: info@masters-uk.com
Website: www.masters-uk.com / www.masters-usa.com

NOTES
1. World Health Organization, Fact Sheet No. 275 (revised February 2006)
2. Id.
3. Id.
4. See Id.
5. See Kramer, Andrew. “Counterfeit Drugs Imperil Health andProfits.” The New York Times, September 4, 2006
6. See Id.
7. First Interim Report of the Seventeenth Statewide Grand Jury in the Supreme Court of the State of Florida, Case No. SC02-2645
8. Id.
9. See First Interim Report of the Seventeenth Statewide Grand Jury in the Supreme Court of the State of Florida, Case No. SC02- 2645
10. See Id.
11. US Immigration and Customs Enforcement, “ICE Efforts to Combat Counterfeit Pharmaceuticals,” July 11, 2006
12. See Wyatt Yankus, “Counterfeit Drugs: Coming to a Pharmacy Near You” (Condensed Version), The American Council on Science and Health, August 2006
13. Id.
14. Id.
15 Paul Newton et. al., “Manslaughter by Fake Artensunate in Africa—Will Africa be Next?,” PLoS Medicine, Vol. 3, Issue 6 (June 2006): 0003
16. Id.
17. See FDA Counterfeit Drug Task Force Report: 2006 Update; World Health Organization, Fact Sheet No. 275 (revised February 2006); and First Interim Report of the Seventeenth Statewide Grand Jury in the Supreme Court of the State of Florida, Case No. SC02-2645
18. See FDA News, P06-78, June 9, 2006
19. See “Florida Leads in Protecting Patients by Securing the Drug Supply,” SupplyScape web article
20. See “Rx Drug Law Puts Florida at Forefront,” Orlando Business Journal, November 25, 2005
21. See, generally, Chapter 499.012, Florida Statutes, and Rule 64F- 12.015, Florida Administrative Code
22. Florida Office of Program Policy Analysis & Government Accountability
23. Id.

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