Have you noticed that folks in Washington, DC have stopped asking this question?

The Lancet 2008; 371:1551
DOI:10.1016/S0140-6736(08)60663-7

Editorial

Combating counterfeit drugs

Last week, the US Food and Drug Administration (FDA) told a Congressional hearing that it believes a contaminant found in batches of heparin, which have killed at least 81 patients, might have been deliberately added. The source of the contaminant—oversulfated chondroitin sulphate—has been traced back to a Chinese supplier of drug manufacturer Baxter International. Why the stocks might have been intentionally contaminated is unclear, but the fact that oversulfated chondroitin sulphate is structurally similar to heparin but about 100 times cheaper, raises the very real possibility that it could have been added by counterfeiters.

If counterfeiting is behind the heparin case, it would not be that surprising; trends indicate that counterfeit medicines, defined by WHO as drugs that have “been deliberately and fraudulently mislabelled with respect to identity and/or source”, are a growing, global problem. The FDA alone has seen an 800% increase in the number of new counterfeit cases between 2000 and 2006. In developing countries, where drug regulatory systems can be weak or non-existent, around 10–30% of medicines might be counterfeit. Antimalarials have been a particular target for counterfeiters, and fakes have flooded the market in many Asian countries.

The substances used to adulterate medicines can vary from chalk, to antibiotics, to highly lethal substances that cause alarming spikes in mortality rates. Subtherapeutic levels of the genuine medicine, such as an antimalarial, can also lead to death or the development of fatal drug resistance. But these deaths, mainly in developing countries, are largely hidden in public-health statistics.

This situation is only likely to worsen as counterfeit drugs are becoming more difficult to combat. Criminals are using more sophisticated techniques to bypass standard laboratory testing such as the addition of cheaper substances that mimic genuine drugs. Holograms on drug packaging, designed to make counterfeiting more difficult, are also being copied with increasing accuracy making boxes of fake products hard to detect by the human eye. These deceptive measures have unfortunately led to a booming, lucrative trade. The Center for Medicine and the Public Interest estimates the sales of counterfeit drugs will reach US$75 billion in 2010. So what is being done to address the problem?

At the international level, the World Health Assembly adopted a resolution against counterfeit and substandard drugs in 1988, and at the end of 2006, the International Medical Products Anti-Counterfeiting Taskforce (IMPACT) was set up by WHO to mobilise action. However, despite these moves, few concrete steps have been taken by countries and political will to adopt anti-counterfeiting measures is lacking.

Most WHO member states are doing a poor job of reporting counterfeiting cases. Incredibly, between 2002 and 2004, WHO received no reports of counterfeit drugs. In many countries, counterfeiting medicines is not even considered a crime and when it is, the penalties for those found guilty often do not tally with the severity of the action. For example, in the UK, the prison sentence and fine for counterfeiting a T-shirt with a trademarked logo can be greater than for counterfeiting a medicine. Tougher prison sentences and heftier fines need to be introduced by governments to deter counterfeiters.

Countries must also strengthen their ability to regulate the drug supply. According to WHO, only 20% of its member states have well-developed drug regulatory systems, and around 30% have no or weak drug regulation. Twinning food and drug authorities in rich countries with ones in resource-poor countries might help nations that are struggling to regulate the market. Drug authorities also need to work effectively with customs, the police, scientists, health workers, WHO, and INTERPOL. This type of collaborative approach has proved successful in tackling counterfeit antimalarials in southeast Asia.

The pharmaceutical industry also has its part to play. It should be legally required to report suspected cases of counterfeiting to the relevant national drug authority—a practice which is currently voluntary. Companies must also be encouraged to lower the prices of their products in developing countries to reduce the economic incentive for counterfeiters.

There is no magic bullet to deal with counterfeit medicines. Countries need to adopt multipronged, multidicisplinary approaches to combat the problem. WHO and donor countries should provide support to developing nations to strengthen their drug regulatory systems. But individual governmental commitment to this goal is essential. Without it, public safety will continue to be compromised.

We don’t know the prevalence of counterfeit or substandard drugs (more on the distinction in a later post). The recent deaths caused by the Baxter brand of heparin illustrate the potential risks of adulterated product. But is that case the tip of the iceberg or an exception to the rule… the rule of a safe, well-controlled supply chain?

The high rates of counterfeit pharmaceuticals in developing countries have been well documented. Phony anti-malarials alone undoubtedly cause untold deaths. But a widely cited estimate that the counterfeit industry will be worth $75 billion by 2010 comes from a report by the Center for Medicines in the Public Interest. The report (which CMPI was kind enough to send) provides little information on how this extrapolation was derived, other than to say it was based on the “author’s calculations.” Nor does break down the number between wealthy countries with well-controlled drug supplies and countries with endemic counterfeiting and poor health infrastructure. So what is the situation in the US and similar nations? The authors of a PLoS Medicine article suggests that pharmaceutical manufacturers in the US and the UK deliberately fail to report incidences of counterfeiting. As a first step toward understanding the extent of this problem, an international and publicly accessible registry should be established to track counterfeit products. Governments should mandate that industry report all known or suspected cases.

The growing threat posed by dangerous fake drugs has been highlighted by a leading medical journal.Between 2000 and 2006 the US Food and Drug Administration (FDA) saw an eight-fold increase in the number of new counterfeit cases, said The Lancet.

In developing countries with weak regulatory systems, around 10% - 30% of medicines might be counterfeit, the journal added.

Antimalarial drugs were a particular target for counterfeiters and fake drugs had flooded the market in many Asian countries.

Worldwide sales of counterfeit drugs were forecast to reach 75 billion US dollars (£38.22 billion) in 2010.

Counterfeit medicines are defined by the World Health Organisation (WHO) as drugs that have been “deliberately and fraudulently mislabelled with respect to identity and/or source”.

Counterfeiting may have caused the deaths of at least 81 patients in the US who died after being treated with contaminated heparin, a widely used blood thinning drug.

Last week the FDA told a Congressional hearing it believed a dangerous contaminant found in batches of the heparin may have been deliberately added. The contaminant, traced back to a Chinese supplier, was structurally similar to heparin but 100 times cheaper.

Substances used to adulterate medicines varied from chalk to antibiotics to highly lethal substances, said the editorial.

The counterfeit drug trade was becoming more difficult to combat, it pointed out. Criminals were using more sophisticated techniques to bypass standard laboratory tests, for instance by adding cheaper substances that mimicked genuine drugs.

At a recent London policy conference on parallel trade, Heinz Kobelt (Secretary General of the European Association of Euro-Pharmaceutical Companies – EAEPC) discussed his association’s credo of “know your customer.” This was during a discussion of how parallel trade can actually help to enhance drug safety and security. (More on that absurd canard in a moment.)

But, during the ensuing Q&A it turns out that “know your customer” actually means “don’t ask/don’t tell” when it comes to one of their most important and largest category of customers – wholesalers, specifically those shady entrepreneurs who go beyond legal EU parallel trade into the clearly illegal realm of marketing non-approved drugs to North America.

Case in point: Rimonabant.

Licensed and legally marketed in the EU under the brand name “Acomplia,” this medicine is not approved for use in the United States. But type “Acomplia” into any US search engine and you’ll find no shortage of Canadian internet pharmacies ready, willing, and able to sell it to any American with a credit card.

How is this possible? Because these pharmacies are buying their supplies from European wholesalers – wholesalers who are getting their supplies (legally) from within the EU and then selling them (illegally) outside the confines of the Treaty of Rome.

When confronted with this shady behavior, Mr. Kobelt was at a loss for words, finally saying that it was an issue that should be brought up with the wholesalers.

Heinz – you can’t have 57 flavors of “know your customer,” choosing to “know them” only when it’s convenient is a policy that is neither sound nor honest.

As to parallel trade enhancing safety and security, here’s how Heinz spins that one.

During his presentation he pointed out (correctly) that the recent spate of counterfeit drugs that had infiltrated legitimate UK pharmacies had been discovered by a parallel trader. And that’s true. But what he didn’t mention is that those same products had already passed through three other parallel traders without being found.

Some victory for drug safety and parallel trade.

Something else that Heinz didn’t share was that, when the parallel trader found the counterfeits, rather than calling the UK authorities as required (the MHRA in this instance), he called the company whose drug had been counterfeited – so that he could get his supplies replaced.

Parallel trade and altruistic commitment to drug safety? Sure.

Chinese regulators accused Baxter of failing to co-operate in an investigation over deaths linked to impurities in blood thinner heparin.

The charge, swiftly denied by Baxter, marked a fresh escalation in Sino-US trade tensions since reports of at least 81 deaths linked to contaminated heparin in the US have triggered withdrawals in 11 countries.

The State Food and Drug Administration, China’s drugs regulator, said on Tuesday that Baxter had not provided all samples and information requested during a visit last month to its New Jersey plant. The SFDA reiterated its position that there was no proven link between the deaths in the US of patients and “a heparin-like substance” found in the drug.

Baxter replied: “We have been co-operating with all parties in the heparin situation including SFDA and the Chinese government. We plan to continue co-operating with them to help move the investigation forward. We will seek to understand any concerns to the contrary.”

Here’s the rest of the story, courtesy of the Financial Times:

http://www.ft.com/cms/s/0/3587b9b0-1ba7-11dd-9e58-0000779fd2ac.html

Per the larger issue of “tainted” vs. “counterfeit” ingredients, consider the comments of Robert Parkinson, Baxter’s chief executive, who said that the issue in question “appears to be the target of a deliberate adulteration scheme.”

Translation:  Counterfeiting.

There are a lot of issues here that need to be addressed – most notably criminal opportunism.

Consider the Chinese proverb, “Flies never visit an egg that has no crack.”

We must seal the cracks.

An entirely new criminal enterprise has emerged – counterfeit ingredients.  While counterfeit API (active pharmaceutical ingredient) isn’t a new issue, there is a new and frightening manifestation.  In the past, counterfeit API was purchased by criminals making counterfeit drugs.  Today a new, significantly more dangerous and difficult to fight enterprise is underway – the sale of counterfeit (“tainted”) ingredients to legitimate pharmaceutical manufacturers.  The most high profile example of this is the deadly case of Heparin.It is impossible to believe that the case of Heparin was an unfortunate mistake – a quality lapse, a one-time and unique circumstance. The facts speak otherwise.  This was a case of fraud.  Criminal fraud.  So let’s call it by its proper name — counterfeiting.

Counterfeit medicines, according to the WHO are “deliberately and fraudulently mislabeled with respect to identity or source. Counterfeiting occurs both with branded and generic products and counterfeit medicines may include products with the correct ingredients but fake packaging, with the wrong ingredients, without active ingredients or with insufficient active ingredients.”

It’s time to rethink and broaden that definition to include the potential for fake ingredients (“tainted” is both too polite and too inaccurate a term) that insidiously find their way into legitimate pharmaceutical manufacturing.

And, unfortunately, it means that CMPI must recalculate its global estimates for counterfeit medicines and their profits upwards.

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McKesson (MCK) announced a settlement with the Drug Enforcement Administration (DEA) that temporarily suspends distribution of two controlled substances from two of its distribution centers. This latest settlement reflects the DEA’s aggressive strategy for controlling diversion by pursuing actions against wholesalers. However, I presume that McKesson has learned some lessons from Cardinal Health’s (CAH) troubles so the marketplace impact should be less severe.

A DEA press release describes McKesson’s alleged interactions with online pharmacies:

“Three McKesson distribution centers received and filled hundreds of suspicious orders placed by pharmacies participating in illicit Internet schemes, but failed to report the orders to DEA. They did so even after a Sept.1, 2005, meeting at which DEA officials met with and warned McKesson officials about excessive sales of their products to pharmacies filling illegal online prescriptions…As a result, millions of dosage units of controlled substances were diverted from legitimate channels of distribution.”

McKesson resolved its claim with the DEA for $13.25 million, an expected outcome given the company’s previous disclosures. For the record, I will remind you that “the settlement agreement is neither an admission of liability by McKesson nor a concession by the United States that its claims are not well founded.” Florida got $7.5 million of the $13.25 million in civil penalties, ensuring that the state retains its infamous reputation.

This Reuters story notes that McKesson must also temporarily suspend distribution of two drugs from two of its distribution centers. Competitor Cardinal Health (CAH) has struggled with the customer service issues associated with similar suspensions, but the impact should be smaller for McKesson. (See Cardinal Health’s Customer Problems Deepen from my Drug Channels blog).

According to the World Health Organization, adherence refers to “the extent to which patient behavior corresponds to the recommendations of a Health Professional.” When patients fail to take their medicine as prescribed, the financial impact on the pharmaceutical industry is substantial. Even more distressing is the damage that is done to a patient’s health and well being.

IMS statistics indicate that for every 100 prescriptions, only 50-70% actually make it to the pharmacy to begin with. From there, adherence may be lost at any point, from picking up the first prescription to picking up refills. Only an estimated 15-20% of patients take their medicines correctly, and for as long as they should.

Drug safety concerns are among the many reasons why patients neglect to fill prescriptions or continue taking their medications as prescribed. I know this from personal experience. Recently, my physician recommended that I take Crestor for my high cholesterol. I have heard some troubling things about Crestor’s side effects from people I consider professionals and who should know about these things. Consequently, when I was first prescribed Crestor I did not fill the prescription.

How might I have acted if Crestor marketers focused squarely on the safety concerns of Crestor rather than touting the benefits to better compete with Vytorin (or rather to take advantage of Vytorin’s recent bad publicity)?

An example I like to point to is the ongoing 150-second Celebrex TV ad — and the 2-page print ad (see figure below) — that proclaims “Understand the risks. See the Benefits.” This ad is an example of what has been called a “risk-first” DTC advertising.

Although the Celebrex ad has been criticized for mentioning “death” several times, an article in Pharmaceutical Executive Magazine suggested that this “risk-first DTC” appears to be a new tactic—”to persuade the public about a drug’s usefulness … acknowledging the negative allows the product to gain credibility, mitigates resistance and counterarguing, and permits information that would normally ‘hit a brick wall’ to be viewed in a credible context.”

The idea that being up front about communicating risk to consumers can actually increase credibility in a troubled brand is fascinating. Even more fascinating is the suggestion that better communication of drug risks can achieve greater adherence.

I first heard this idea expressed by Hugo Stephenson, President, iGUARD.org (listen to a Pharma Marketing Talk audio interview with Stephenson) during a panel discussion I hosted last month at the 2nd Annual Pharmaceutical Sales & Marketing Executive Congress, held in Rockville, MD.

“One of the things we are exploring is whether or not better communication about risk can improve compliance,” said Stephenson. “Communicating risk should not be just about avoiding liability, but it could actually give patients a better experience with the product and result in better compliance. For example, if you know certain patients are more at risk to get nausea when taking a drug, you can communicate that risk along with tips on how to avoid the problem. This can reduce side effect dropouts. This can be supplemented by the sharing of patient information, which can help other patients put their risk in perspective.” (See “DTC Risk Communication” in the April 2008 issue of Pharma Marketing News.)

Pfizer began airing it’s “risk-first” Celebrex ads over a year ago and continues to do so today. That must mean that the ads are effective, considering the price of running them on TV. And they may be effective because putting risk first AND in perspective not only helps patients “understand the risks” but also see the benefits of adherence.

As for me, without any upfront discussion about the risks of Crestor from AstraZeneca to comfort me, I am sticking with Pravachol — a tried and true brand I have been taking for years! [Actually, I hope to switch to the generic pravastatin and save some money as well!]

If you like used Soviet nuclear warheads, you’re going to love this …

According to Mikhail Zurabov, the Russian Health and Social Protection Minister, the number of counterfeit drugs has “significantly” decreased, and now amounts to 3-4% of the Russian drug market.

Most international organizations put the rate of counterfeits in the Russian health care system at 12%. Reducing this exposure to 3-4% is an exaggeration of truly Soviet agitprop proportions.

How did the Comrade Minister accomplish such a feat? Why he changed the law! (And we all know how much the Russian Mafia believes in the rule of law.)

Mr. Zurbov commented, “The penalties for such drugs has been defined and the decision was made to revoke the license of a company producing counterfeit drugs.”

That’s right, they reduced counterfeit medicines almost entirely by threatening to “revoke” the license of counterfeiters.

Surprisingly, the Minister neglected to mention the number of “licenses revoked,” people arrested, or counterfeit medicines seized (and to reduce the Russion national volume from 12% to 3% there must have been quite a lot.) Maybe he’s just really modest.

In any event, now that Russian drugs are so safe, maybe we should introduce legislation to allow importation into the US market.

The Center for Medicine in the Public Interest (www.cmpi.org), estimates that counterfeit drug commerce will grow 13& annually through 2010.  The CMPI study is cited by the WHO on its updated counterfeit pharmaceuticals fact sheet.

Counterfeit sales are increasing at nearly twice the rate of legitimate pharmaceutical sales and they are a money machine.  In 2010 CMPI estimates that fake drugs will geneate $75 billion in revenues — a 92% increase from 2005.  And the risks of detection and prosecution are low.