Bloomberg: Interpol Investigation Leads to Drug Seizures, Arrests in Asia

Bloomberg News has posted an online story reporting on a huge seizure of millions of counterfeit unit of sale packs of counterfeit medications. The operation coded named Operation Storm II was coordinated by Interpol and included counterfeit medications from the branded manufacturers Pfizer, Bristol-Meyers Squibb and Teva.

The entire Bloomberg News story appears below:

Police seized more than 20 million packs of counterfeit medicines, arrested at least 33 people and closed more than 100 illegal pharmacies in a series of raids in eight Southeast Asian nations coordinated by Interpol.

Counterfeit versions of Pfizer Inc.’s Viagra for erectile dysfunction, Bristol-Myers Squibb Co.’s blood thinner Plavix and Teva Pharmaceutical Industries Ltd.’s morning-after pill Plan B were among the products seized, Aline Plancon, an Interpol officer who coordinated the raids, said Jan. 26 in an e-mail from Jakarta. The haul also included fake aspirin, antibiotics, malaria treatments and hair-loss medicines, she said.

The seizures and arrests, part of an investigation called Operation Storm II, are the second round of raids in two years in Asia as international and local police crackdown on widening sales of fake medicines.

Asia is the world’s biggest producer of all counterfeit products, the Organization for Economic Cooperation and Development said in 2007 report. About 40 percent of 1,047 arrests related to fake drugs worldwide in 2008 were made in Asia, according to the Washington-based Pharmaceutical Security Institute.

In raids between July and November, police in Cambodia, China, Laos, Indonesia, Myanmar, Singapore, Thailand and Vietnam seized more than 12.2 million packs of fake drugs, Plancon said. An additional 8 million packs of medicines that had passed their expiry dates, were unregistered, or had been diverted from their intended destinations were also confiscated, she said.

Authorities from the eight countries involved plan to form a network to exchange information; coordinate enforcement and forensic investigations; and raise awareness in the region, Plancon said. Interpol is also creating a unit focused on fighting fake drugs, she said.
The new unit will help “dismantle the transnational criminals who threaten lives,” Plancon said. “This crime is a plague that needs to be addressed seriously and consistently in each and every country and region of the world.”

In 2008, police seized more than $6.7 million of counterfeit medicines and made 27 arrests in 200 raids across the region as part of Operation Storm I.

To read learn more about anti-counterfeiting technologies that protect the pharmaceutical supply chain, visit: www.xstreamsystems.net.

To read the entire Bloomberg post, follow this link: http://www.bloomberg.com/apps/news?pid=20601080&sid=aktGpE2o.ohM

IJCP: Counterfeit Internet Drugs Pose Significant Risks and Discourage Vital Health Checks

A story posted online at redOrbit.com on January 20th explores a recently published review of online internet drugs posted by the International Journal of Clinical Practice (IJCP).

One of the major warnings from the IJCP report is that men who buy fake internet drugs for erection problems can face significant risks from potentially hazardous contents and bypassing healthcare systems could leave associated problems like diabetes and high blood pressure undiagnosed.

The IJCP review, which looks at more than fifty studies published between 1995 and 2009 and provides a valuable overview of the scale of counterfeit internet drugs, with a specific focus on erectile dysfunction (ED) drugs.

Here are some interesting statements from the story:

• Medical and pharmaceutical experts from the UK, Sweden and USA carried out a detailed review of the growing problem of counterfeit drugs. Estimates suggest that up to 90 per cent of these illegal preparations are now sold on the internet.


• These have played a key role in driving the growth of counterfeit drugs, with studies suggesting that as many as 2.3 million ED drugs are sold a month, mostly without prescription, and that 44 per cent of the Viagra offered on the internet is counterfeit.


• The presence of unknown pharmaceutically active ingredients and/or impurities may lead to undesirable and serious adverse events, even death" warns lead author and journal editor Graham Jackson, a London-based cardiologist.


• Pfizer, which manufactures Viagra, analyzed 2,383 suspected counterfeit samples forwarded to the company by law enforcement agencies between 2005 and 2009. It found that that a Hungarian sample contained amphetamine, a UK sample contained caffeine and bulk lactose and that printer ink had been used to color some samples blue. Other samples contained metronidazole, which can have significant adverse effects when combined with alcohol."


• And a study of 370 seized "Viagra" samples carried out by the Dutch National Institute for Public Health found that only 10 were genuine, with a range of other drugs present in the samples.


• "In some cases producing counterfeit medicine can be ten times as profitable per kilogram as heroin, yet in the UK someone can face greater legal sanctions if they produce a counterfeit T-shirt.


• "What is clear is that we need much greater public awareness of the risks of buying counterfeit drugs, as lives are at risk.

To learn more about pharmaceutical anti-counterfeiting solutions, visit: http://www.xstreamsystems.net/.

To read the entire redOrbit.com story: http://www.redorbit.com/news/health/1811733/counterfeit_internet_drugs_pose_significant_risks_and_discourage_vital_health/index.html

Latin Business Chronicle: Mexico’s Shadow Pharma Market

Mexico’s counterfeiting, theft and illegal sales of samples cost drug-makers nearly $2 billion USD a year.

An article written by Guillaume Corpart, Manuela D’Andrea and Enrique Orellana for Kroll’s company newsletter, Tendicias and republished in the January 11 edition of the Latin Business Chronicle, details the size and scope of the illicit side of Mexico’s underground pharmaceutical market.

This excellent piece contains many examples and specific statistics relative to counterfeiting, fraud and adulteration of medications within Mexico. Here are some outstanding excerpts:

Mexico’s pharmaceutical industry faces unique challenges. The $15.5 billion USD market is plagued by counterfeit goods, theft on a massive scale and irregular sales practices. Illicit activity in Mexico’s pharmaceutical industry is estimated at $1.9 billion USD per year – 12 percent of the formal market.

Counterfeiting is the primary problem, accounting for 80 percent of the illicit market. Theft -- including assaults on pharmacies and warehouses, cargo robbery, and pilferage inside health institutions -- represents an additional 12 percent, while the illegal sale of drug samples accounts for 5 percent.

Sales of counterfeit drugs in Mexico in 2008 are estimated at $1.5 billion USD. Counterfeit medications are the product of a sophisticated and lucrative shadow industry, with global reach. Well organized counterfeiting rings slip fake medications into Mexico’s legitimate drug supply. The operations of the legitimate industry are replicated by shadow players who engage in importing, manufacturing, packaging and distributing of their false merchandise.

Two types of counterfeiting practices are rampant in the Mexican market:
- Partial or total product substitution: It is common practice for counterfeit medication to include the original active ingredient but in smaller dosage, thus creating a sub-potent drug. Although the active ingredient is present, the medications may be laced with potentially hazardous material. In one case, counterfeit medication for erectile dysfunction was found to have traces of LSD, a psychedelic drug.
- Counterfeiting of expired drugs: Organized crime rings acquire expired medicines in order to repackage and reinsert them into the distribution channels. The absence of a formal waste management system for expired drugs encourages the “recycling” of drugs back into the formal distribution system.

Pharmaceutical companies operating in Mexico realize that this illicit activity erode their market position and long-term competitiveness. It is no longer possible to rationalize that these risks represent sunken costs that companies have to live with. The profitability of pharmaceutical manufacturers and distributors in the long run requires the implementation of preventive measures, anti-counterfeiting technologies in the form of monitoring systems, as well as product authentification methods.

To learn more about pharmaceutical anti-counterfeiting technologies, visit:
www. xstreamsystems.net.

Read the entire Latin Business Chronicle article at: http://www.latinbusinesschronicle.com/app/article.aspx?id=3905

FDA News Release: Counterfeit Alli

As reported earlier in Secure Pharma Chain Blog, the FDA Warns Consumers via a press release about Counterfeit Alli.

The counterfeit products contain controlled substance sibutramine. The following is the press release from the FDA.

The U.S. Food and Drug Administration is warning consumers about a counterfeit and potentially harmful version of Alli 60 mg capsules (120 count refill kit).

Preliminary laboratory tests conducted by GlaxoSmithKline (GSK)—the maker of the FDA approved over-the-counter weight-loss product— revealed that the counterfeit version did not contain orlistat, the active ingredient in its product. Instead, the counterfeit product contained the controlled substance sibutramine. Sibutramine is a drug that should not be used in certain patient populations or without physician oversight. Sibutramine can also interact in a harmful way with other medications the consumer may be taking.

Consumers began reporting suspected counterfeit Alli to GSK in early December 2009. GSK has determined that the counterfeit product has been sold over the internet. However, there is no evidence at this time that the counterfeit Alli product has been sold through other channels, such as retail stores.

The counterfeit Alli product looks similar to the authentic product, with a few notable differences. The counterfeit Alli has:

• Outer cardboard packaging missing a “Lot” code;
  
• Expiration date that includes the month, day, and year (e.g., 06162010); authentic Alli expiration date includes only the month and year (e.g.,: 05/12);


• Packaging in a plastic bottle that has a slightly taller and wider cap with coarser ribbing than the genuine product;


• Plain foil inner safety seal under the plastic cap without any printed words; the authentic product seal is printed with “SEALED for YOUR PROTECTION”;


• Contains larger capsules with a white powder, instead of small white pellets.
  

Consumers who believe they have received counterfeit Alli are asked to contact the FDA's Office of Criminal Investigations (OCI) by calling 800-551-3989 or by visiting the OCI Web site (http://www.fda.gov/OCI).

Health care professionals and consumers are encouraged to report adverse events that may be related to the use of these counterfeit products to the FDA's MedWatch Program by phone at 1-800-FDA-1088, by fax at 1-800-FDA-0178, or by mail at: MedWatch, HF-2, FDA, 5600 Fishers Lane, Rockville, MD 20852-9787.

Pictures of counterfeit Alli samples of the packaging and product provided by GSK can be found at: http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm197857.htm

To learn more about technologies that can verify drugs in their unit of sale container without degradation or destruction, visit: http://www.xstreamsystems.net/.

The Decade of the Counterfeit-Part Two

The is the second and final installment of a two part opinion blog by Alan Clock, Senior Vice President at XStream Systems, Inc.

How do we as a society both domestically and globally solve this growing threat and eliminate the danger that looms as its deadly consequence to us all?

We now live in a worldwide, global economy. Trade and industry superpowers have emerged beyond the traditional European and North American developed nations. Comprehensively all industries have had enormous movement of production into underdeveloped nations, even those that have a tradition of trade riddled with fraud, counterfeiting and corruption. These countries with well know nefarious sources of supply, now find themselves as a primary producers of everyday consumer products that are in foodstuffs, household goods and medications on the retail shelves of Main Street USA.

The reality, unknown by many, is that this counterfeit phenomenon is growing and going well beyond the borders of the undeveloped world. Today, not one product, not one place, not one person is immune from the impact of counterfeit and fraudulent products. It is likely that we will continue to see this counterfeit boom continue unabated indefinitely.

How this phenomenon is happening is both complex and simple. This is a global event which adds to its complexity, but it is driven by easy money which is very straightforward to understand.

As such, some of the major factors driving the unprecedented proliferation of counterfeit products around the globe decade include:

• Global economies and worldwide supply chains. As companies become more global and procure raw materials and contract production overseas due to lower costs and expense, the supply chains become much more difficult to control and monitor. Companies lose control over their production, intellectual property and quality control. Regulatory processes and enforcement in third world countries lag behind the developed world and institutional control. Nefarious vendors can contaminate for quick profit a product by providing poor quality or adulterated raw materials prior to production. Without adequate controls manufacturers, distributors, retailers and consumers find themselves vulnerable to poor quality, contaminated or fraudulent materials. Often by the time an issue is discovered the product is well within distribution, its source difficult to pinpoint with the perpetrators long gone. Unfortunately by that time the impact of the bogus product has been borne by thousands.


• Ineffective laws and regulations. As a global economy expands, products move across multiple borders making them increasingly vulnerable and allowing for organizations to take advantage of legal loopholes, breaks in regulatory authority and the ability for law enforcement to adequately monitor movement of goods and services. Penalties for criminal activities also exacerbate the situation. A criminal organization can make more profit with less risk of being caught or with any significant legal ramifications by counterfeiting than almost any other criminal activity. Basically it is easier to counterfeit products, with much less risk and much more profit than in any other legitimate or illegitimate activity.


• Growth of the internet and unrestricted, instant access to millions of consumers. In the 21st century, counterfeit organizations can directly or indirectly market and sell their wares online, 24 hours a day in relative anonymity. These organizations can set up websites and fulfill transactions with only a few key strokes and completely camouflage their operation. By the time a regulatory body, law enforcement agency or consumer finds a fake product the marketing source or website and operation is long gone into a hazy cyber world.


• The global financial meltdown that occurred in the last half of the decade has caused many retailers and consumers to look at the price of materials, focusing less on quality and authenticity. As incomes and profits fall, so do the standards of the producer or consumer as they scramble to find the products and materials that they rely on. This is a dangerous environment where counterfeit organizations thrive. A perfect scenario for fraudulent activity occurs when members of the supply chain focus on price over cost and fraud. The criminals know that by the time their crime is discovered they have little chance of being held accountable.


• The lack of brand protection and security by members of the supply chain. Many manufacturers, distributors and retailers have been slow to realize the huge impact that counterfeit products have and could have to their businesses. Many have had and continue to show a lack of strategy in dealing with this issue, ostensibly because they have not educated themselves on the problem or they do not have the necessary solution to effectively deal with it. Regrettably until most of these organizations face the liability or brand erosion of a catastrophic event caused by fraudulent activity they simply ignore the issue altogether.


• The lack of implementation or acceptance of comprehensive solutions to combat counterfeiting. There have been scores of regulatory bodies, legislation and industry groups make attempts to implement comprehensive solutions to counterfeit activities. Most initiatives prove to be ineffective, based on their lack of acceptance, expense and their complicated approach. Functionally most of these solutions are based on a transactional approach. A transactional approach relies on the supply chain to continually interact and exchange data. This constant information exchange in real time is difficult at best and extraordinarily expensive at worst especially when you are dealing with a far reaching, global supply chain.
  
  Additionally transactional methods only deal with the product package and not the material or product itself. Some of the largest and most egregious fraud and counterfeit events of the past several years were products that had pristine transactional pedigrees but the product on the inside of the package was adulterated or fraudulent, causing harm to thousands of end use consumers and millions in losses to the brand.
  
  To date, most industries seem to have taken a wait-and-see approach driven by the cost of current solutions, which ultimately means that the initiatives die as the events which caused the activity loses momentum over time. The reality is that eventually business leaders within the supply chain have a “hear-no-evil, see-no-evil” attitude as it relates to this issue because they posses few answers and have little to no government or industry leadership to the mandate or guide them.

The dilemma of the next decade is how to marshal our resolve as a society globally and properly respond to the multiple factors which have driven this decade of fraudulent, adulterated and counterfeit products that have proliferated in the 21st century.

First and foremost, to win this battle, there needs to be a universal awareness of how prevalent and how dangerous this issue actually has become. Consumer’s awareness and their rejection of products that are not vetted and authenticated is critical.

Additionally, regulatory authorities across the globe need to be motivated, synchronized and resourced appropriately so as to eliminate the shadows and safe havens that allow counterfeiters to thrive.

Finally, industry and supply chains need to understand and realize the profit, loss and liability that exist if they do not deal with counterfeits head on. Each of the stakeholders of the consumer supply chain, from corporations to consumer, need to push for sophisticated solutions and eliminate this potentially deadly threat.

Vital to these three primary steps is the realization from all; manufacturer to consumer, is the understanding what this counterfeiting is currently, but what it can become if not properly addressed.

Most ominous is the potential for counterfeiting to evolve beyond the simple criminal act to becoming a massive terror threat is very real. As it stands today, millions die each year from individual criminal counterfeit acts, if done with a coordinated murderous intent; a terrorist element could comprehensively impact the health and mortality of an entire country or society.

Fortunately the solutions are at hand, today there are technologies that can be comprehensively layered to protect the various members of the supply chain, within individual channels to follow transactions, screen materials and authenticate the validity of products at each step of the sequence as it makes its way to the consumer.

One such solution is a technology known as EDXRD. This innovative technology allows the user to molecularly screen the product inside its original container without destroying or degrading the product, thus minimizing the need for Track and Trace or transactional solutions. Basically this solution adds functionality from the transactional and looking at the outside of the container to looking inside the container with Molecular Screening. Ultimately, this type of solution provides each member of the supply chain the confidence to know that their inventories safe and efficacious.

In the end, layered deployment of technology solutions, consumer awareness and a coordinated regulatory/law enforcement process will be the most effective strategy to lessen this very dangerous, criminal activity. When the criminal elements realize that there is little profit and a realistic chance that they will be held accountable for their actions, the deadly issue of counterfeit and fraudulent products will drastically decline and the Decade of the Counterfeit will become a brief historical story of how technology and public awareness save the day.

Alan Clock, Senior Vice-President of XStream Systems has over 20 years of pharmaceutical, healthcare and sales distribution experience. Mr. Clock has an impressive track record of promoting comprehensive solutions to healthcare providers, distributors, large corporate entities, group purchasing organizations, employer groups and managed care organizations. He has held senior sales executive and national account roles for major Fortune 100 healthcare industry leaders and has successfully negotiated and sold billions of dollars in multi-year pharmaceutical service, software, equipment, packaging and consulting agreements.

The Decade of the Counterfeit-Part One

This is the first installment of a two part opinion blog by Alan Clock, Senior Vice President at XStream Systems, Inc.

The first decade of the 21st century could carry many labels given the rise of global terrorism, a bursting housing bubble and a worldwide financial meltdown. However one very appropriate label, albeit lesser known by the masses, would be the Decade of the Counterfeit.

Although counterfeit materials and fraudulent supplies have been around for centuries, with the emergence of far reaching global supply chains and an expanding worldwide economy, the criminal activity of producing counterfeit goods have propagated and is impacting a greater number of consumers more than ever before.

In modern times counterfeit products go well beyond the conventional bogus purses and knock off apparel that we traditionally associate with this fraudulent activity. The scope and audacity of the contemporary counterfeiter goes well beyond what has traditionally been considered to be a victimless crime.

Today’s counterfeit products include every product that is used today. This runs the gamut from commercial aircraft parts to sophisticated electronics, and from consumer goods to food and life saving healthcare products. Counterfeited products include all of the goods that consumers rely upon for their safety and well being. At best, these bogus products fall short of their consumer’s expectation while at worst they threaten a population’s safety and overall health.

An insidious example of how counterfeit activity can create a deadly consequence and cause thousands to die is documented by the issue of counterfeit drugs causing drug resistant disease strains in underdeveloped countries in Africa and Asia.

With medical science producing drugs that can effectively cure or curb diseases such as tuberculosis, malaria and HIV/AIDS, unscrupulous counterfeiters are producing fake drugs with only a trace of the real drug’s active ingredient. The counterfeiters put only enough of the real ingredients in to fool rudimentary testing processes. The unfortunate side effect of these bogus treatments is that not only do they not provide any therapeutic cure, they actually create more dangerous strains of the disease that are impervious and resistant to the known drug regimens used to treat the illness.

The World Health Organization estimates that upwards of 2,000 children per day die as a result of taking counterfeits medications in Africa alone.

Well over 1 million children die in Africa and Asia die each year because of counterfeit drug medications.

A few global statistics from the World Health Organization regarding pharmaceuticals, even further energizes the debate regarding the label Decade of the Counterfeit:

• In 2010, the World Health Organization (WHO) conservatively estimates that counterfeit medications will be a $75 billion industry worldwide.


• The WHO projects growth of counterfeit medications to be over 12-16% annually, worldwide.


• The WHO Reports that globally 10% of Pharmaceuticals are counterfeit, fraudulent or adulterated.

How do we as a society both domestically and globally solve this growing threat and eliminate the danger that looms as its deadly consequence to us all?

View Part Two of the opinion blog tomorrow on Secure Pharma Chain Blog.

New York Times: In Recall, a Role Model Stumbles

Natasha Singer writes an excellent article in the January 17th issue of the New York Times regarding the recent management of a sweeping product recall by McNeil Consumer Healthcare, a division of Johnson & Johnson.

In this article, Ms. Singer explores how a company with the reputation of Johnson & Johnson, who is seen as the “gold standard” of crisis management, seemingly botches this most recent issue of product contamination within the supply chain.

Secure Chain Pharma Chain Blog has reported extensively on this particular recall and believes that this incident, which is based on onsite product contamination, energizes the need for material screening of products within the supply chain to protect consumers from fraud, adulteration, contamination and counterfeit products.

The following is an excerpt of the Ms. Singer’s article:

The Harvard Business School teaches future executives the gold standard in brand crisis management. The model dictates that a company should communicate clearly with the public about a crisis, cooperate with government officials, swiftly begin its own investigation of a problem and, if necessary, quickly institute a product recall.

The template is based on Johnson & Johnson’s conduct in 1982, when several people died after taking tainted Tylenol pills. The company’s reaction to the crisis is widely regarded as exemplary.

But last week, Johnson & Johnson appeared to abandon its own template, stunning a few business school professors. Its conduct also drew harsh criticism from federal officials.
On Friday, McNeil Consumer Healthcare, a division of Johnson & Johnson, announced the recall of several hundred batches of popular over-the-counter medicines, including Benadryl, Motrin, Rolaids, Simply Sleep, St. Joseph Aspirin and Tylenol.

According to a federal inspection report, the response was anything but swift. The recall came 20 months after McNeil first began receiving consumer complaints about moldy-smelling bottles of Tylenol Arthritis Relief caplets, according to a warning letter sent by the Food and Drug Administration to the company on Friday. Since then, a few people have also reported temporary digestive problems like nausea, vomiting and stomach pain, the agency said.

To read the entire article, visit:

http://www.nytimes.com/2010/01/18/business/18drug.html?th&emc=th

To learn more about technologies which will protect inventories within the supply chain, visit:

http://www.xstreamsystems.net/.

FDA: Counterfeit Version of Alli May Harm Consumers

Three separate media outlets are reporting the Food and Drug Administration’s announcement about a counterfeit version of the GlaxoSmithKline OTC drug Alli.

The following are web links to stories from CNNMoney.com, the Wall Street Journal and MedPage Today.

CNNMoney.com reported, "A counterfeit version of the over-the-counter weight-loss product Alli being marketed online could be harmful to dieters, the US Food and Drug Administration warned." The agency "said the counterfeit Alli was sold in 60 mg capsules as part of a 120 count refill kit." Alli manufacturer GlaxoSmithKline "said tests showed the falsely packaged and labeled products contained a controlled substance called sibutramine."

The Wall Street Journal reports that sibutramine is the active ingredient in Abbott Laboratories' prescription weight-loss treatment Meridia. The FDA said that "sibutramine...should not be used in certain patient populations or without physician oversight." Glaxo noted that while patients should take Alli three times a day, Meridia should only be taken once daily.

The agency said the fake products are missing a "'Lot' code on its cardboard packaging," MedPage Today reported. In addition, the counterfeit has "an expiration date that includes month, day, and year...instead of month and year," and contains "plain foil inner seals as opposed to the genuine articles printed, 'SEALED for YOUR PROTECTION.'"

To learn more about technologies used to detect counterfeit medications, visit: http://www.xstreamsystems.net/.

Coming This Week a Two Part Blog Series: The Decade of the Counterfeit

Coming later this week, Secure Pharma Chain Blog will be presenting in a two part blog series a recent opinion paper written by Alan Clock, Senior Vice President at XStream Systems, Inc.

The paper, titled The Decade of the Counterfeit, discusses how the first decade of the 21st century has emerged due to the globalization of the world's economy as a time where counterfeit, fraudulent and adulterated products have proliferated and touch each and every product, brand and consumer around the globe.

The following is an exerpt from The Decade of the Counterfeit:

The first decade of the 21st century could carry many labels given the rise of global terrorism, housing bubble and a worldwide financial meltdown. However one very appropriate label, albeit lesser known by the masses, would be the Decade of the Counterfeit.

Although counterfeit materials and fraudulent supplies have been around for centuries, with the emergence of far reaching global supply chains and an expanding worldwide economy, the criminal activity of producing counterfeit goods have propagated and are impacting a greater number of consumers universally more than ever before.

In modern times counterfeit products go well beyond the conventional bogus purses and knock off apparel that we traditionally associate with this fraudulent activity. The scope and audacity of contemporary counterfeiters goes well beyond what has traditionally been considered to be a victimless crime.

Today’s counterfeit products include every product that is used today, running the gamut from commercial aircraft parts to sophisticated electronics, and from consumer goods to food and life saving healthcare products. These include all of the products that consumers rely upon for their safety and well being. At best, these bogus products fall short of their consumer’s expectation while at worst they threaten a population’s safety and overall health.

To learn more about XStream Systems, Inc. visit our website at: http://www.xstreamsystems.net/.

2010, the Year That Counterfeit Drugs Becomes a $75B Global Business

Alan Clock, SVP, XStream Systems, Inc.

In 2005, the Center for Medicines in the Public Interest (CMPI), released a report projecting global counterfeit drug sales to reach $75 billion in 2010. At the publication of the report, this projection was a 92% increase from the 2005 estimate of $39 billion of worldwide counterfeit drug sales.

Most global experts then and now do not dispute this estimate. In fact, many would not argue the point that today, this estimate may be entirely too conservative and the real financial impact and overall number is much higher.

In 2010, we as a society face a global health catastrophe that will impact people of all countries, race, religion and economic strata.

What will be the key factor that will turn this issue around in the new decade?

"The business of selling fake prescription drugs to unsuspecting consumers is burgeoning, and is a global industry," stated Peter Pitts in 2005, senior fellow for health care studies at the Pacific Research Institute and director of the CMPI. "Nearly $39 billion, or 11 per cent of global pharmaceutical commerce will be counterfeit this year (2005)," added Mr. Pitts. "By 2010, that number will nearly double. We must enact controls to strengthen the security of our health care system from outside threats."

At the time that this report was published, Dr. Scott Gottlieb, Deputy Commissioner for Medical and Scientific Affairs at the U.S. Food and Drug Administration stated. "The increasing flow of counterfeit drugs represents a significant public health threat. We must step up our efforts to safeguard the drug supply -- we certainly should not weaken those controls."

Even with these dire predictions and public support for action in 2005, there has been little appreciable progress in the domestic and international efforts to stem the flow of this worldwide health care crisis. Regulatory, law enforcement and industry efforts to date have been inconsistent overall and seemingly lack an overall perspective of the severity and impact of this issue.

One of the most startling examples of the deadly impact of the global counterfeit medication epidemic is the World Health Organization’s (WHO) estimate that nearly 2,000 children die each day in Africa as a result of bogus drugs. Counterfeit medications in underdeveloped countries not only do not treat illness and disease but are now a major factor in creating drug resistant strains of deadly diseases such as malaria, tuberculosis and HIV/AIDS.

With the proliferation of counterfeit medications and the impact to people all over the world, the issue, in its extreme, is only now beginning to garner important public awareness.

The public awakening to this deadly scourge is the first critically important step in motivating public and industry leadership to move forward and take action.

With a motivated and aware public, elected and industry leaders will be encouraged to step up their efforts to protect their constituents, businesses and customers.

When properly inspired, these leaders will look to strengthening regulatory authority and in expanding their technology/ processes to thwart these nefarious sources of a deadly criminal act.

To learn more about technologies that are used to combat counterfeit medications, visit: www.xstreamsystems.net.

Johnson & Johnson: Massive Expansion of Recall

As an update to an earlier Secure Pharma Chain Blog report, Johnson & Johnson has massively expanded a recall of their OTC medications. This is the second expansion of a recall due to a moldy smell of these particular products that are making consumers ill.

The recall now includes specific lots of Tylenol caplets, gel tabs, arthritis treatments, rapid release and extend release Tylenol as well as Motrin IB, regular and extra strength Rolaids antacids, Benadryl allergy tablets, St. Joseph aspirin and Simply Sleep caplets.

McNeil Consumer Products, a division of Johnson & Johnson, is publicly stating that the expanded recall includes product lots that could be affected by the same problems of consumers experiencing nausea and vomiting that were the reason for the original recall, even though it has not received any reports from consumers.

The latest update recall applies to Johnson & Johnson/McNeil products sold in the North America, Central and South America, the UAE and Fiji.

A full list of the recalled products is online at http://www.mcneilproductrecall.com/.

Previously Johnson & Johnson recalled some Tylenol Arthritis Caplets in November and December due to the moldy smell, which caused nausea, stomach pain, vomiting and diarrhea to some consumers.

Johnson & Johnson says the smell is caused by small amounts of a chemical associated with the treatment of wooden pallets.

This recall, based on onsite product contamination, energizes the need for material screening of products within the supply chain to protect consumers from fraud, adulteration, contamination and counterfeit products.

To learn more about onsite pharmaceutical material screening solutions, visit: www.xstreamsystems.net.

FreightWatch International: December 2009, The Highest Month Ever for Cargo Theft in the US

FreightWatch International, an industry leader in providing cargo theft intelligence through data collection, analysis, and customized reporting, released their monthly report on cargo theft for December 2009.

According to Freightwatch, in the month of December there were over 82 reported cargo thefts. This is the highest number of cargo thefts ever reported by Freightwatch in the United States in a single month.

California, Florida and Texas accounted the highest number of cargo theft incidents. There were 23 theft incidents in California, 13 in Texas and 10 in Florida.

By commodity, the food and drink industry suffered the highest volume of losses with 19. electronics and auto parts continue to remain high with 15 and 11 thefts respectively. FreightWatch also recorded three thefts in the pharmaceutical sector.

The reported pharmaceutical thefts were a December 5th incident in Pennsylvania where over $266,000 of OTC medications were stolen and several separate incidents that occurred on December 13th which occurred in North Carolina and Virginia. These incidents involved the theft of pharmaceutical products, cosmetics and contact lens solution.

This monthly report essentially reinforces many points of the the Secure Pharma Chain Blog of January 1st which commented on Nick Basta’s excellent article in Pharmaceutical Commerce. In this particular article Mr. Basta reported that pharmaceutical cargo theft was becoming a largely organized criminal activity.

To read the entire report from Freightwatch International, visit: http://www.freightwatchintl.com/.

To learn more about supply chain security solutions, visit: http://www.xstreamsystems.net/.

FDA Sets Up Shop in Mexico

The US Food and Drug Administration (FDA) has continued its expansion outside of the United States with the opening of an office in Mexico. This is now the third FDA office in Latin America after Costa Rica and Chile.

The move is the latest in an effort by the FDA to influence foreign markets, and in particular in areas which serve as important importation partners into the US supply chains including pharmaceuticals, medical devices and food.

The new office which is based in the capital, Mexico City, "represents an important step as we re-design our product safety strategy," commented FDA Commissioner Margaret Hamburg.

Mexico is the largest pharmaceutical market in Central America, with 2009 sales estimated to reach around $9bn and expected to grow to nearly $15bn over the next five years, according to Business Monitor International. It is the second-largest pharmaceutical market in Latin America as a whole.

XStream Systems encourages the continued expansion of the FDA into countries that are important trading partners but also suggest that regulatory bodies and supply chains, internationally and domestically, utilize technologies like EDXRD to protect itself from fraudulent, adulterated and counterfeit materials.

To learn more about supply chain protection technologies, visit: www.xstreamsystems.net.

Smithsonian.com: The Fatal Consequences of Counterfeit Drugs

In an excellent article written by Andrew Marshall, which appeared in the October 2009 issue of Smithsonian magazine, he discusses the very real and deadly impact that counterfeit drugs are making on the underdeveloped countries of Asia.

In his article, Marshall chronicles the issue, its causes and ways that officials are working to identify the perpetrators of this crime that is killing hundreds of thousands each year.

Various forensic technologies are currently being used in these areas but there are seemingly few interdiction solutions available to those in underdeveloped countries to catch these scurrilous fakes.

Currently there are various authentication technologies available which allow regulatory agencies, government officials and private industry to effectively identify and interdict fraudulent, adulterated, sub potent and counterfeit medications including EDXRD which allows the testing inside a products unit-of-sale container.

To view Andrew Marshall’s article, visit: www.smithsonianmag.com.

To learn more about EDXRD as a solution to counterfeit medications, visit: www.xstreamsystems.net.

Teva Expands Nationwide Recall of Ketamine

Teva Animal Health Inc. is expanding a nationwide recall of its Ketamine Hydrochloride Injection which effect products under seven manufacturer’s labels because of adverse events including the death of some animal patients. The labels include specific lots of Ketamine products from Fort Dodge Animal Health, Vedco, AmTech Group, Butler, Phoenix Pharmaceuticals, Rx Veterinary Products and Lloyd Laboratories. This enhanced recall energizes the need for material screening of products within the supply chain to protect consumers from fraud, adulteration, contamination and counterfeit products. The following press releases include details on the recall:

Teva Animal Health, Inc. Expands a Voluntary Nationwide Recall of Ketamine Hydrochloride Injection, USP CIII 100mg/mL in 10mL vials

December 21, 2009 - Teva Animal Health, Inc. is expanding a nationwide voluntary recall of Ketamine Hydrochloride Injection, USP CIII 100mg/mL in 10mL vials for all lot numbers within their expiration dates to the Veterinary Level. This product had previously been recalled to the distributor level and is being expanded as a result of an increased trend in serious adverse events associated with this product.

Veterinarians who have this product in their possession are instructed to cease using the product immediately and return it to their distributor.

Ketamine Hydrochloride is a rapid acting, non-narcotic, non-barbiturate agent for anesthetic use in cats and for restraint in subhuman primates. This recall is being conducted as a result of an increased trend in serious adverse events associated with this product, including lack of effect, prolonged effect, and death and involves all lot numbers within expiration.

Teva Animal Health, Inc is voluntarily recalling the aforementioned product. The FDA has been apprised of this action.

Consumers with questions may contact 800-759-3664 from 8:00am – 5:00pm CST Monday-Friday. http://www.fda.gov/Safety/Recalls/ucm195118.htm

Seven Labels Tied to Teva Ketamine Recall, FDA says

In the wake of Teva Animal Health’s massive ketamine recall, the U.S. Food and Drug Administration (FDA) reports that the action extends to lot numbers of Fort Dodge Animal Health’s Ketaset, Vedco’s Ketaved and five other private labels.

An e-mail to the VIN News Services (VNS) from the FDA’s Center for Veterinary Medicine (CVM) confirms that the labels include:

• AmTech Group Inc. Ketamine Hydrochloride Injection, USP, manufactured by IVX Animal Health Inc..
• Butler KetaThesia, distributed exclusively by Butler Animal Health Supply, Dublin, Ohio
• Fort Dodge Ketaset, manufactured for Fort Dodge Animal Health, Fort Dodge, Iowa
• VEDCO KetaVed, distributed by Vedco Inc., St. Joseph, Mo.
• Phoenix Ketaject, manufactured for Phoenix Pharmaceutical Inc., St. Joseph, Mo.
• LLOYD Laboratories VetaKet, manufactured for Lloyd Laboratories in
• Shenandoah, Iowa
• RXV Keta-Sthetic, manufactured for RXVeterinary Products, Westlake, Texas

This latest recall stems from the reported death of five cats, inconclusively linked to the drug's use. But troubles within Teva Animal Health surfaced last July, when the FDA shut down the company via a permanent injunction and filed a lawsuit, alleging that regulatory inspectors had uncovered adulterated animal drugs at Teva’s main facilities in St. Joseph, Mo. The generics manufacturer agreed to cease production of its drugs and its DVM Pharmaceuticals line of products following FDA's much-publicized crackdown on the company’s quality control practices.

http://news.vin.com/VINNews.aspx?articleId=14720

To learn more about onsite pharmaceutical material screening solutions, visit: www.xstreamsystems.net.

Fake FDA Agents Pursue Consumers for Bogus Drugs

The FDA is warning the public about an international extortion scam by criminals posing as FDA special agents and “fining” consumers who purchased drug online or via telepharmacies. The FDA press release appears below:

FDA Warns Public of Continued Extortion Scam by FDA Impersonators

The U.S. Food and Drug Administration is warning the public about criminals posing as FDA special agents and other law enforcement personnel as part of an international extortion scam.

The criminals call the victims -- who in most cases previously purchased drugs over the Internet or via "telepharmacies" -- and identify themselves as FDA special agents or other law enforcement officials. The criminals inform the victims that purchasing drugs over the Internet or the telephone is illegal, and that law enforcement action will be pursued unless a fine or fee ranging from $100 to $250,000 is paid. Victims often also have fraudulent transactions placed against their credit cards.

The criminals always request the money be sent by wire transfer to a designated location, usually in the Dominican Republic. If victims refuse to send money, they are often threatened with a search of their property, arrest, deportation, physical harm, and or incarceration.

"Impersonating an FDA official is a violation of federal law," said Michael Chappell, the FDA's acting associate commissioner for regulatory affairs. "The public should note that no FDA official will ever contact a consumer by phone demanding money or any other form of payment.”

FDA special agents and other law enforcement officials are not authorized to impose or collect criminal fines. Only a court can take such action, with fines payable to the U.S. Treasury.

Anyone receiving a telephone call from a person purporting to be an FDA or other law enforcement official who is seeking money to settle a law enforcement action for the illegal purchase of drugs over the Internet should refuse the demand and call the FDA’s Office of Criminal Investigations Metro Washington Field Office at (800) 521-5783 to report the crime.

In addition to posing as FDA officials, criminals have posed as special agents of the DEA, FBI, U.S. Secret Service, U.S. Customs Service, as well as U.S. and Dominican prosecutors and judges. In response, the FDA, in conjunction with various federal, state, and local agencies, is actively pursing criminal charges.

The FDA also reminds consumers to use caution when purchasing prescription drugs over the telephone or the Internet. In addition to the increased risk of purchasing unsafe and ineffective drugs from Web sites operating outside the law, there is the danger that personal data can be compromised.

For more on FDA’s concerns about unlawful drug sales on the Internet, see http://www.fda.gov/ForConsumers/ProtectYourself/default.htm.

Drug Resistant Diseases Fueled by Counterfeit Medications Impact Developed Nations

As has been repeatedly discussed on this blog, drug resistant strains of diseases have evolved in underdeveloped countries by counterfeit medications that contain just enough of the active ingredient of the drug used to treat the disease to fool rudimentary analytical testing used to verify the drugs authenticity. Unfortunately these fake medications, with minor amounts of the real drug add injury to insult by not only not treating the disease but in creating drug resistant strains of the disease itself.

Until lately this issue has largely impact underdeveloped nations in Africa and Asia but as you can see by recent media reports and this article which appears in the Minneapolis Star Tribune, this phenomenon is now hitting US shores with drug resistant strains of Tuberculosis.

This problem of drug resistant strains in Africa kills thousands every day.
Developed and underdeveloped nations need to take action and utilize a variety of solutions to put an end to this issue which makes deadly diseases more sophisticated and deadlier.

Solutions such as XStream System’s, XT250 are able to do on-site, molecular screening of pharmaceuticals that can verify active ingredients, excipients and packaging to authenticate and verify medications inside their sealed, unit-of-sale container would drastically curtail the ability of counterfeiters to sell and distribute substandard medications in developed and underdeveloped nations.

To read the Star Tribune story visit: http://www.startribune.com/lifestyle/health/80160622.html?elr=KArks7PYDiaK7DUvDE7aL_V_BD77:DiiUiacyKUnciaec8O7EyUr.

To learn more about XStream Systems and its XT250, visit: http://www.xstreamsystems.net/.

Pharmaceutical Cargo Theft Emerges as a Organized Criminal Activity in 2009

In an excellent online article written by Nick Basta in Pharmaceutical Commerce, he explores the expanding issue of pharmaceutical cargo theft and the ongoing efforts to fight against this problem which poses a serious threat to US healthcare consumers. This issue has become more public in 2009.

Basta writes an overview of the issue and covers various Pharma companies, transportation industry solutions and interviews various industry experts.

Highlighting the article were some of the more significant pharmaceutical cargo thefts in 2009:

• Almost 36,000 cartons of albuterol sulfate vials from Dey L.P. (Napa, CA) stolen in early August in McKinney, TX. Dey sent out an announcement advising that “pharmacists are encouraged to verify pedigree documentation for all purchases of Dey-labeled” albuterol.

• Teva Pharmaceuticals lost almost 1,000 cartons of Copaxone (glatiramer acetate) in a theft in April; Copaxone is a temperature-controlled product that must be stored below 74° F and out of sunlight; Teva had to recall the remainder of that lot.


• Novo Nordisk lost 129,000 vials of Levemir (recombinant-DNA insulin) in a North Carolina robbery in the spring. In June, it and FDA announced that the product—which requires refrigerated storage—had shown up in a medical center in Houston; subsequently FDA reported that it “has received multiple reports of patients who suffered an adverse event due to poor control of glucose levels after using a vial from one of the stolen lots.” An August followup reported that the stolen insulin was still showing up and that only 2% of the vials had been accounted for.


• The biggest-value recent theft—which didn’t produce an FDA alert because the product was recovered within minutes of being stolen, occurred along the PA Turnpike in May. An Eli Lilly shipment of insulin valued at $37 million was stolen (along with the truck) at a turnpike rest stop, but the truck was located a few miles down the road by quick-acting state troopers; the shipment was intact and allowed to proceed, according to industry sources.

To read the entire online story, Cargo Theft Emerges as New Biopharm Worry, in Pharmaceutical Commerce, visit: http://www.pharmaceuticalcommerce.com/frontEnd/1345-pharmaceutical_logistics_theft_in_transit_cargo_security_coalition.html.

To learn more about XStream Systems, onsite supply chain material screening solutions, visit: http://www.xstreamsystems.net/.