K-V Pharmaceutical May Not Resume Sales Until 4th Quarter

K-V Pharmaceuticals announced last week that it will not resume sales until October 2010 at the earliest and may have to cut operations to stay in business.

K-V stopped all manufacturing and shipping in January 2009 after a series of product recalls and has closed its generic drug unit Ethex.

K-V pleaded guilty in February to charges it failed to inform regulators about manufacturing problems that caused some of its pills to be too large, which could have lead to accidental overdoses.

The K-V saga is a cautionary tale of a company who has suffered from a lack of product quality control, testing and verification. Had authentication technologies been in place at the point of manufacture, distribution or dispense the issue of manufacturing difficulties would have been discovered prior to the dispensing of the drug to any consumer.

XStream Systems encourages the entire pharmaceutical supply chain to employ authentication and verification technologies from end to end to protect inventories and consumers.

Hartford Courant: Rx Warehouse and Cargo Thefts on the Rise

In the March 28th issue of the Hartford Courant, Janice Posada reports in excellent detail about the rising trend of prescription drugs thefts and the rapid emergence of the lucrative criminal activity of cargo and warehouse theft of prescription drugs.

Presumably the break-in of the Eli Lilly & Company warehouse in Enfield, Connecticut, where over $75 million dollars of prescription drugs (without taking any narcotics and painkillers) was the impetus behind this story. In this act, the thieves made off with pallets of anti-cancer, schizophrenia, depression and prescription drugs to sell in foreign or black markets.

Until this most recent incident, many were not aware of this entire subset of criminal activity. The black market for stolen brand name prescription drugs has become one of the more lucrative parts of the illegal drug trade, once the stolen product is secured it can be shipped to a foreign country, re-sold into the legitimate supply chain or re-packaged for sale directly to consumers for extraordinary profit.

In the article, Ms. Posada details the financial motivation, sophistication, health risk to consumers and the easy money to be made in the theft and resale of prescription drugs. There were some great quotes in article from several industry and regulatory experts.

Marvin D. Shepherd a Professor at the University of Texas College Of Pharmacy at Austin and an expert in prescription drug theft and diversion:

• The theft of prescription drugs, from blood thinners to insulin, "has exploded in the last five years," The types of drugs thieves go after also has changed. Until recently, the most sought-after drugs were narcotics and prescription painkillers,”


• "It used to be small-scale stuff where some guy walked into a pharmacy with a gun looking for OxyContin. Now they're looking for brand-name prescription drugs.”


• "A couple years ago in Florida, they were stealing Procrit. From the records they found, police estimated the thieves made $40 million."


• "We haven't found a lot of these stolen drugs, which leads me to believe they're either going out of the country or they're being cleverly relabeled."

John Burke, President of the National Association of Drug Diversion Investigators, a nonprofit group that coordinates drug theft investigations comments on the Lilly theft:

• "These are very expensive drugs, it’s likely these thieves didn't just drop in and start grabbing stuff. It's almost as though they had an order for it. It's too well-planned. This is the biggest heist I can think of in many, many years.”


• "They'll make at least $20 million on the black market with these drugs. That's my guess. If a pill sells for $10, they'll get $3 or $4 for it."


• "It's all about the money. These drugs won't be peddled on the street in the same way you would peddle addictive drugs.


• "There are lots of options. They could go to a foreign market. They may be distributed by an unscrupulous wholesaler to U.S. pharmacies, in particular, independent pharmacies."


• "If you're a wholesaler and you get these drugs for an extraordinarily lower price than what you normally pay for it, and re-sell it to a pharmacy, you can make a lot of money. In fact, thieves are likely to make more money from the sale of stolen cancer drugs and antidepressants than from a similar cache of narcotics, such as OxyContin or Vicodin.

Ilisa Bernstein, the FDA's Director of Pharmacy Affairs, comments in the article about the theft of prescription medicines, over-the-counter drugs and medical devices:

• "Cargo and warehouse theft is an increasing problem that threatens the public health. And is one that the "FDA and law enforcement cannot solve ... alone. Participants in the supply chain must step to the plate and ensure that their security practices are as solid as they can be."


• Stolen drugs can deteriorate or lose their medicinal properties if they're improperly stored, creating a public health threat. And thieves do not abide by the storage recommendations for drug products.”


• "Patients can be harmed if these products are not stored or handled properly, or have been tampered with. We have received adverse reports of patients taking stolen insulin who could not control their blood sugar. The insulin probably was not stored and handled properly and lost its potency.”

This is an excellent article for those not in-the-know as it relates to this major criminal issue within the pharmaceutical supply chain. XStream Systems endorses the concept of verification and authentication at each step of the pharmaceutical supply chain to combat theft, fraud, adulteration and counterfeit medications and protect the healthcare consumer.


To read the article in the Hartford Courant, visit: http://www.courant.com/news/health/hc-stolen-drugs-0328.artmar28,0,5569692,full.story.

Two Men Charged for Illegally Importing Counterfeit Medications

The U.S. Department of Justice (DOJ) announced the arrest of two people for illegally importing counterfeit weight loss products including GlaxoSmithKline’s alli.

According to the DOJ, the two Chinese born men, imported weight loss products they claimed were cheaper versions of FDA approved medications.

Sengyang Zhou, a Chinese national was arrested in Hawaii last week. Zhou, during the course of the investigation implicated himself as the maker of the counterfeit Alli.

Qin Ming Hu, a U.S. citizen, born in China was arrested in Plano; Texas last week. According to the DOJ the charges could result in nearly 20 years of prison time and hundreds of thousands in fines for Zhou and several years in prison and fines of nearly $250,000 for Hu.

"The Food and Drug Administration will work together with other government entities to aggressively target those individuals who put the public's health at risk by selling counterfeit drugs," FDA Commissioner Margaret Hamburg said recently in a published statement.

The two men were apparently successful in marketing their bogus products over the Internet to consumers seeking less expensive medications online. The counterfeit medications, identical to the packaging of the branded medications, reportedly contained dangerous levels of the active ingredient used in the authentic drugs.

XStream Systems encourages all members of the pharmaceutical supply chain to use an authentication process to verify their inventories and protect healthcare consumers from dangerous adulterated, fraudulent, sub potent and counterfeit medications.

To learn more about an anti-counterfeiting technology which is being used to discover fraudulent, adulterated and counterfeit drugs in the pharmaceutical supply chain, visit: http://www.xstreamsystems.net/.

Re-Packaged Drug Scare: Diabetes and AIDs Drugs Switched During Packaging

An Indian pharmaceutical company announced a recall in South Africa on products mis-labeled during its repackaging process.

Be-Tabs Pharmaceutical, a division of Ranbaxy, announced an urgent recall of Diacare tablets for diabetics and Cozole an anti-biotic for HIV positive patients.

Be-Tabs company spokespeople say that the Diacare tablets had been packed into boxes labeled as Cozole.

According to medical experts, the side effects for patients that take the mis-labeled products could range from mild to death however the most extreme impact only happening if the patient takes excessive amounts of the Diacare products. The largest impact is considered for HIV patients that are not compliant with their clinical regimens and suffer the effects of being off their medications.

It is not immediately known how many products were incorrectly labeled or how many patients are impacted.

This story is a cautionary tale that is happening all to often for all manufacturers, re-packagers and dispensers. Professional entities are encouraged to include Quality Controls in their processes to protect their supply chain partners and healthcare consumers from mis-labeled, sub-potent, adulterated and counterfeit medications.

FDA Asks Physicians To Suspend Use Of Rotarix Due To Contamination

The FDA has asked the nation’s physicians to stop giving their patients Rotarix, a vaccine used to protect against rotavirus.

The recommendation came after the FDA became aware of an independent U.S. research team finding an unauthorized substance, porcine cirovirus 1, or PCB-1 DNA, in multiple samples of Rotarix.

According to CNN: "Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health, said 'a substantial amount' of the DNA was found in the vaccine. But, he stressed, 'there is no evidence that it causes any disease. ... There is no evidence that it ever does anything.”

According to the New York Times: “For now, the decision is unlikely to disrupt routine immunizations in children since a second vaccine, this one made by Merck and called RotaTeq, remains available. RotaTeq was approved for use in the United States in 2006 and is still the more popular vaccine. Rotarix was approved in 2008 and has been used to vaccinate about one million children.”

The discovery of this virus, hastens the need for more robust Quality Control testing at all lengths of the supply chain, raw materials, manufacturer, distribution and the point of dispense to properly protect the healthcare of the global consumer.

A variety of news sources are reporting on the story including the New York Times, CNN, Wall Street Journal, Washington Post and USA Today.

To view the New York Times story, link to: http://www.nytimes.com/2010/03/23/health/policy/23fda.html.

To learn more about supply chain protections against contamination, adulteration, fraud or counterfeiting, visit: http://www.xstreamsystems.net/.

WHO: Drug-resistant TB at record levels worldwide

Substandard and Counterfeit Drugs Play a Part in the Resistance

According to the World Health Organization(WHO) an estimated 440,000 people had multi-drug resistant tuberculosis (TB) in 2008 and a third of them died as the new variant of the TB mycobacterium continues to spread. Globablly, the drug-resistant forms remain a relatively small portion of the overall estimated 9.4 million cases of TB. However, experts fear that drug-resistant TB is on the rise.

Multidrug-resistant TB (MDR-TB) is caused by bacteria that are resistant to at least isoniazid and rifampicin, the anti-TB drugs most commonly used. It can be contracted by exposure to a resistant form or the resistance can be acquired during treatment.

The most common cause is the failure to complete the six-month treatment or the use of substandard or counterfeit drugs.

A potentially more serious problem is extensively drug-resistant TB or XDR-TB, in which the bacteria are resistant not only to isoniazid and rifampicin, but also to a fluoroquinolone and any of the second-line injectable drugs, such as amikacin, kanamycin and capreomycin.

No good numbers are available for the incidence of XDR-TB, but the WHO estimates there were about 25,000 cases in 2008 and that nearly all its victims died. Since XDR-TB was first reported in 2006, 58 countries have reported at least one case.

The first case of XDR-TB in the United States was reported by Associated Press (AP) in December 2009. He was treated at a sanitarium for nearly two years before being discharged.

This issue of counterfeit, fraudulent and adulterated medications, is causing a deadly healthcare crisis around the globe, energizes the need for material screening of products within the supply chain, from raw materials to dispensing, to properly protect consumers everywhere.

To view LA Times article on TB resistance visit: latimes.com

To view the WHO report visit: who.int

To view AP story visit: http://www.msnbc.msn.com/id/34516639/ns/health-infectious_diseases/%20

Eli Lilly Loses $75M in Warehouse Burglary

In an update to a blog posted to Securing Pharma Chain Blog, more details are becoming public in the reported burglary of a drug warehouse in Enfield, Connecticut on early Sunday morning.

The warehouse, operated by Eli Lilly & Company, lost approximately $75 million dollars in prescription drugs after thieves scaled a wall onto the roof of the building and rappelled inside.

The thieves made off with enough drugs to fill at least one tractor trailer and apparently were loading pallets of product into waiting vehicles at the site's loading dock for over an hour.

The suspects disabled phone lines, back up security systems and access programs as they made their way into the building. Apparently they were aided in their efforts by a strong rainstorm, the leading edge of a nor’easter, which help conceal much of their activity.

The stolen drugs are described by a Lilly spokesperson as “a mixture of pharmaceutical products” including Prozac, Cymbalta and Zyprexa. No narcotics or pain medications were stored in this warehouse.

Federal authorities have been brought into the investigation to assist State and Local law enforcement.

The theft is being described as the work of a well planned, sophisticated and organized criminal group.

The issue of pharmaceutical theft energizes the need for material screening of products within the supply chain, from manufacturer to dispenser, to properly protect consumers everywhere.

To learn more about solutions to protect the pharmaceutical supply chain, visit: http://www.xstreamsystems.net/.

Pharmaceutical Warehouse Burglary

Freightwatch International reported this morning in an email message about a pharmaceutical warehouse burglary which occurred early Saturday morning (March 13th).

An unknown number of suspects entered into pharmaceutical warehouse in Enfield, Connecticut by cutting phone lines and going through the roof of the warehouse entering into the telecommunications room of the facility. The suspects then disabled the backup alarm and access control systems.

The initial loss estimate is $76 million dollars.

According to Freightwatch:

· The M.O. of this burglary is consistent with the pharmaceutical warehouse burglary that occurred last year in Richmond, Virginia.
· FreightWatch recommends that all companies with warehousing operations ensure redundant communication systems are in place, including motion detection and immediate response protocols around the communications, alarms and access control systems.

The issue of pharmaceutical theft energizes the need for material screening of products within the supply chain, from manufacturer to dispenser, to properly protect consumers everywhere.

FreightWatch International is an industry leader in providing cargo theft intelligence through data collection, analysis, and customized reporting

You can view this report and other cargo theft intelligence by visiting the FreightWatch Intelligence Portal: http://www.freightwatchintl.com/intelligence_portal.

FreightWatch International: February 2010 Cargo Theft Report

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 February 2010.

FreightWatch recorded 75 theft incidents for last month; an increase of 15% from January to February.

By commodity, the electronic and the food/drink industries experienced the highest losses recording 14 incidents each. Auto/parts thefts continued high with 11 incidents. Finally the Building/industrial, Clothing/shoes and Pharmaceutical industry, each reported five incidents.

The five pharmaceutical thefts included two incidents in Monroe, Ohio on February 6th and 7th, both from a truck stop. One theft had a value of $320,000, while the other theft value was unavailable.

There were also two reported thefts in West Palm Beach, Florida on February 22nd. One incident valued their loss at $1,000,000 while the other value was unavailable.

The fifth reported incident occurred in Cape Girardeau, Missouri which was the theft of an entire trailer on a roadside, with the value of $36,485.

The issue of pharmaceutical cargo theft energizes the need for material screening of products within the supply chain, from manufacturer to dispenser, to properly protect consumers everywhere.


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/.

GAO: FDA Criminal Investigations Unit Lacks Oversight

As posted online in Securing Pharma, according to a report from the General Accounting Office (GAO) the U.S. Food and Drug Administration’s (FDA) unit responsible for investigating counterfeit drugs, contaminated food and other criminal activities lacks sufficient oversight and operational review.

The GAO report on the FDA was initiated based on a request from Senator Charles Grassley (R-Iowa).

The GAO found that the FDA’s Office for Criminal Investigations (OCI) needs to be more closely monitored by the FDA and have appropriate performance measures in place for proper assessment.

The OCI operates semi-autonomously within the FDA and is not mandated to provide any information on its investigations. According to the study, the 2008 the budget for the OCI was $41M. The OCI as a unit within the FDA employed 230 people and instigated approximately 400 prosecutions.

Securing Pharma reports:

· The GAO notes that out of the 24 total office assessments that should have been completed on the OCI's six field offices by August 2009, "only seven, or about 30 per cent, were completed, and one office had not been assessed in over 10 years."
· Another FDA unit which investigates cases of potential misconduct, criminal activity and other transgressions by FDA employees - the Office of Internal Affairs (OIA) - also needs to measures put in place to improve oversight and accountability says the GAO.

Secure Pharma Chain endorses an enhanced oversight of the regulatory agencies and the continued growth of their enforcement tools to adequately protect vital supply chains and consumers.

To read the entire Securing Pharma story, visit: http://www.securingpharma.com/40/articles/399.php.

Pharmaceutical Cargo Security Coalition: Perrigo Cargo Theft in Texas

The Pharmaceutical Cargo Security Coalition (PCSC) issued an alert on a recent cargo theft of an entire shipment from the private label-over the counter generic drug company, Perrigo, near Dallas, Texas.

The theft included the entire shipment which was valued at approximately $400,000. The incident occurred while the cargo was en route from Perrigo’s Michigan distribution center to a San Marcos, Texas warehouse operated by HE Butt Grocery Company.

The shipment included generic over the counter products of minoxidil, nicotine gum, nicotine lozenges, nutritional supplements and vitamins.

This particular incident, based on stolen consumer healthcare products, energizes the need for routine material screening of products within the supply chain, from manufacturing to dispensing, to properly protect consumers from theft, fraud, adulteration, contamination and counterfeiting.

The criminals will likely attempt to sell and re-introduce this product back into the legitimate supply chain via gray marketeers. The danger to the consumer revolves around the product being outside the legitimate chain of custody and the criminals ability to adulterate, counterfeit or otherwise impact the product so that it is unsafe for consumption.

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