Are Counterfeit Drugs in the U.S. Supply Chain?

The general consensus has always been that only a small amount of counterfeit drugs are in the domestic supply chain. True relatively speaking, the percentage of counterfeits found in the United States is lower (estimated at around 1%) than some underdeveloped countries (estimated as high as 50%).

However, this does not paint the whole picture… The U.S. has almost 43% of the market share, which means there are still thousands of counterfeit pills in our distribution cycle. To the consumer that is a victim, it matters not whether he is in the company of many fellow victims or only a few.

Furthermore, the frequency of counterfeits is increasing in more developed countries such as the U.K and the U.S. Now, incidents are showing up in the regular supply chain as you can see from the following news items:

First Foreign National Extradicted For Importing And Distributing Counterfeit Pharmaceuticals Drugs In U. S. Sentenced To Prison
Randy Gonzales, 40, a citizen of the Republic of the Philippines, was sentenced to prison for his role in a scheme to manufacture, import and distribute counterfeit pharmaceutical drugs in the United States.

Gonzales was extradited to the United States from Bangkok, Thailand on March 26, 2008 and indicted four days later. Special agents of the Immigration and Customs Enforcement (ICE) and the Food and Drug Administration Office of Criminal Investigations (FDA)seized more than 60,000 counterfeit Viagra pills and 15,000 counterfeit Cialis pills. The counterfeit drugs were valued at more than $776,000.


Miami Man Sentenced To 20 Years For Massive Drug Diversion Operation
A Miami man has been sentenced to 20 years in prison for running a massive drug diversion operation that made millions of dollars in illegal profit. Jose Luis Perez, 52, had illegally bought expired, counterfeit or adulterated medicines, relabeled them and shipped them through a series of his own pharmaceutical firms in order to sell them to mainstream suppliers.

Investigators were tipped off by a Cincinnati pharmaceutical wholesaler who, while filling a prescription, noticed that the wrong pills were inside and the accompanying paperwork was for a different drug.

At Perez’ Hialeah warehouse, law enforcement officers found $500,000 of prescription pills used for the treatment of HIV-related illnesses, Schizophrenia and erectile dysfunction. Law enforcement also found counterfeit labels and prescription paperwork for more that $8 million-worth of pharmaceuticals.


Local pharmacist, businesses disciplined by state
(Nov. 30, 2008; The Telegraph) In 2006, Hudson resident Richard Minasian, owner of Nashua-based Armin Medical LLC, pleaded no contest in a Florida court that he and a Miami man had sold drugs with fake pedigrees.

That same year, the New Hampshire Board of Pharmacy revoked Minasian's license to sell drugs for at least 10 years, and he was assessed a $29,000 fine, but $20,000 of it was stayed for two years pending good behavior.


As these stories indicate, government intervention is gearing up and we at XStream Systems applaud the increased authority given to FDA and law officials to seize products and prosecute criminals. But the reality is that these undercover operations often take a year or more to complete. During this time consumers, wholesalers, and repackagers are exposed.

Now is time for businesses to protect themselves and their customers by effectively securing their on-site inventories. It is too late to hide our heads in the sand and deny that counterfeits exist – they do and what are the implications for you if they unknowingly pass through your hands!