What does contaminated heparin in our drug supply chain have in common with Memorial Day BBQ?

Scientific Protein Laboratories, the company that brought us contaminated, deadly heparin made from pig intestines was founded by Oscar Mayer, the company that likely will be providing the hot dogs you grill on the barbee this holiday weekend (see the story in the News Times: “Financier Stands by a Firm Tainted by Heparin“).

Mr. Mayer was “apparently interested in profiting from the whole pig, and he started [Scientific Protein Laboratories] to make use of the animal byproducts of his food empire,” says Jacob Goldstein over at the WSJ Health Blog.

I call this the “snout-to-anus” food-drug supply chain, which is best depicted in this illustration:

Scientific Protein Laboratories is owned by American Capital, an investment firm that clearly is interested more in financial gain than it is in the nation’s drug supply. American Capital owns about 170 other companies that make up what I am sure is a diverse portfolio of holdings.

Is any one else disturbed that there are such companies determining which end of the pig we end up with? I think some in Congress might be concerned.

A May 17 article in the Economist Quagmire to goldmine? describes the impending entry of global pharmaceutical companies into developing world markets. Traditionally the big companies like Pfizer and GSK have avoided the third world, preferring to sell blockbuster drugs at high prices in the US, Western Europe, and Japan. Sales in poor countries have typically been low or negative margin, typified by HIV drug giveaways in Africa.

That’s changing now:
• TPG, a big US private equity group, has backed Moksha8, which licenses branded drugs from big pharma to sell to rich customers in poor countries
• GSK is reorganizing to sell into poorer countries directly
• Novartis and Merck are doing research in places like China and India, which represent a new pool of talent but also opportunities to combat diseases that are rare in the rich world

As high-end pharmaceutical products reach the market in significant numbers, supply chain security becomes a major challenge — or opportunity, depending on where you sit:
• Counterfeiting is a problem and will become a bigger one. Moksha8 customers, for example will want guarantees that they are getting the real deal
• Business models that contemplate vastly different prices among countries and even within countries will be irresistible targets for arbitragers

Companies are using different colored pills, different packaging and audits in order to keep things straight. That’s not such a robust solution. It does little to address counterfeiting and diversion is likely to occur anyway. More promising will be technologies such as package-level and even dosage-level identification and tracking, in some cases through covert means. It will be interesting to see whether these technologies catch on first in the developing world and then spread to wealthier countries.

Yesterday Jamie Love e-mailed Bruce Sterling (the science fiction) and asked him to help come up with a new term for counterfeiting because, “ There are significant problems with overusing the term.” Science Fiction? Give me a break.

In any event, it’s a moot point because there is already a word that accurately describes international prescription drug counterfeiting – that word is “crime.” And it translates accurately into most languages.

(As far as Jamie’s “significant problems” are concerned, that’s another issue for another time.)