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!]