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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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.

Two cheers for Congresswoman Rosa L. DeLauro for holding an FDA oversight hearing.

Throughout her career, Representative DeLauro has expressed a brazen disregard for drug safety, continually calling on policymakers to open our borders to an uncontrollable influx of untested, impure, expired, and counterfeit drugs from around the world.

Surprisingly, drug importation was noticeably absent from her agenda. Perhaps importation was omitted because of the recent report that contaminated heparin, manufactured in China, is responsible for at least four deaths. Or perhaps she ignored importation because her hearing comes just one year after dozens of cats and dogs died of kidney failure after ingesting contaminated pet food — and only one year after counterfeit Colgate toothpaste containing diethylene glycol infiltrated the market.

Regardless of her reasoning, it seems grossly irresponsible to grandstand for drug safety on one day and call for the importation of foreign drugs on another.

Let’s look at the facts. The World Health Organization estimates that eight to 10 percent of today’s global medicine supply chain is counterfeit. According to the Food and Drug Administration, that figure jumps to 50 percent or higher in some countries.

Without legalized prescription drug importation, the number of counterfeit drug investigations has increased four-fold since the late 1990s. Just imagine what will happen if such a thoughtless policy were codified.

Perhaps Representative DeLauro will take this opportunity to publicly denounce drug importation and take action to keep counterfeit drugs out of the medicine supply.

From the Moscow Times …

“The State Duma will examine plans to stiffen penalties for manufacturers and distributors of counterfeit pharmaceuticals.

‘It will be the first reading of a bill to create a new statute in the legal code covering the manufacture, intent to supply, supply, storage, transportation and importation of counterfeit pharmaceuticals,’ said Pyotr Shelishch, a member of the Duma’s Legislation Committee.

Counterfeit medicine is a serious problem on the Russian market, Shelishch said.

‘It’s difficult to say what the amount of counterfeit drugs is, but estimates range from fractions of a percentage up to 10 percent,’ he said. The country’s pharmaceutical market is worth around $10.7 billion, according to estimates by industry consultant Pharmexpert

According to the new proposals, the minimum penalty would rise to 500,000 rubles ($20,000) and the maximum penalty would be a 15-year prison term, Shelishch said.

‘The maximum sentence would be applicable if it led to the deaths of two or more people,’ he said.

The new measures come as a result of glaring shortcomings in existing legislation, lawmakers and analysts said.

‘I welcome this new move, as we still do not have any law to punish those people that produce counterfeit drugs in Russia,’ said Nikolai Demidov, general director of Pharmexpert.

In November, pharmaceuticals firm Bryntsalov-A was handed a 40,000 ruble fine after being found guilty of offenses including the improper storage of drugs.

Manufacturers welcomed the proposed legislation but said new laws needed to be backed up by tougher action. “Any changes in legislation should be followed by relevant enforcement measures. Legislative amendments are meaningless without strong support of control activities from executive authorities,” a GlaxoSmithKline Russia spokesman said.

‘We would like to see examples being made where those found to knowingly trade in counterfeit medicines are prosecuted and receive meaningful penalties,’ the spokesman said. ‘We would also like to see an increase in checks on pharmacies and warehouses.’

With international standards such as the good manufacturing practices code as yet not obligatory in Russia, Demidov said overall production control needed to be sharpened.

The prevalence of counterfeit medicine in the country has consistently been one of the major factors hampering Russia’s entry into the World Trade Organization.

“Of course we are thinking first of all about our citizens, but if these measures help facilitate Russia’s entry into the WTO, then that is also positive,’ Shelishch said.

The urgency of these requirements makes it likely that the legislative changes will be passed by the end of the year, Demidov said.

‘I hope that this law will be adopted not later than September. I am linking this with the WTO membership bid,’ he said.”

It’s a good start, but the Russian government can still Duma. (Get it.)

No matter how you say it, prescription drug counterfeiting is international health care terrorism

(And so much for certain politicians who claim that Europe has no problem with counterfeiting)

An increasing amount of fake drugs is being sold over the Internet in Europe, the European Union warned. The European Commission said a recent survey conducted by E.U. member states identified 170 fake medicines that were being distributed illegally, mostly through Websites offering fake or unauthorized lifestyle drugs, growth hormones and sleeping drugs … ‘I am alarmed at the ever increasing number of counterfeit medicines sold via the Internet. This represents a real danger to the health of patients,’ said E.U. Enterprise Commissioner Guenther Verheugen. Lifestyle drugs, such as Viagra, and essential medicines such as antibiotics and insulin are particularly popular with counterfeiters, but there’s also an increasing number of fake contact lenses and even materials such as surgical mesh. Experts warned buying health products over the Internet can be a major health risk.

I’m sorry, did somebody say that counterfeit drugs are a “red herring” of the global pharmaceutical industry? The only comment I can make is, WHO’s on first.

LONDON - Worldwide, the WHO believes counterfeits make up between 5 and 8 percent of the $550 billion of medicines sold each year. But WHO spokeswoman Daniela Bagozzi said this was based on incomplete information and the actual amount could be higher.

“It represents a huge number of people who are suffering and in some case dying,” she said. “A lot of deaths could be avoided if the drugs being taken were not substandard counterfeits.”