How the Current Economy Will Drive Counterfeit and Fraudulent Medications

By: Alan Clock, Senior Vice President, XStream Systems, Inc.

The World Health Organization (WHO) has estimated that in 2010 the value of counterfeit medications worldwide will be approximately $75 billion. This is an increase from $35b in 2006 and it is now estimated that 10% of the global pharmaceutical supply chain is or will be counterfeit or fraudulent.

Although this estimate is dramatic in its size and growth, the WHO came up with this estimate prior to the true realization of the global financial meltdown and its impact on the world’s economies. As the impact of the financial meltdown continues to trickle through the populations of the developed countries it is anticipated by many that the worldwide estimates of counterfeit and fraudulent drugs may in fact grow beyond the $75b and begin to mirror the growth to those of emerging and non-developed countries.

Several factors will drive this growth beyond the 2010 WHO estimates:

• The rising costs of pharmaceuticals will simply become too much for many consumers to afford, especially when coupled with job loss, loss of health benefits or underemployment. Affordability will drive many to nefarious sources like the internet and many will fall prey to unscrupulous deals for bogus medications.


• The lack of comprehensive laws or the ability to catch those who counterfeit, adulterate or fraudulent deal in bogus pharmaceuticals. Simply put it is very unlikely that those who perpetrate the crime will be caught or suffer any real consequence for their deeds.


• The high profitability of the crime of counterfeit and fraudulent medications. It is widely accepted that anyone dealing in this crime will likely profit many times more than others dealing illicit street drugs.


• Lack of regulatory oversight of the legitimate pharmaceutical supply chain which allows for systematic gaps in the supply chain that can be exploited by those with criminal intent.


• The globalization of the manufacturing and raw materials process. Most medications consumed in developed countries have been outsourced to non-developed countries for economic reasons. This creates huge gaps in the quality of the product and lack of regulatory oversight which is critical and necessary for the protection of the supply chain from criminal enterprises.

Solutions to this issue within the pharmaceutical supply chain are also heavily impacted by the global economy. Track and Trace, Taggants, Serialization, Pedigree and Authentication solutions are all very effective in dealing with counterfeit, fraudulent and adulterated drugs but diminishing capital expenditures budgets and tight margins by manufacturers, repackagers, distributors and dispensers are hampering the deployment of the tools needed to eradicate this very dangerous threat to public health. Without regulatory mandates or incentives, businesses cannot easily justify the expense of solutions until or unless their business is or has been affected by counterfeit and fraudulent medications.

The initial WHO estimates were terrifying enough but it would appear that based on the current economic conditions their predictions may prove to be more optimistic than what we may ultimately realize in our global pharmaceutical supply chain.

To learn more about solutions to combat counterfeit, fraudulent and adulterated medication, visit: http://www.xstreamsystems.net/.

Baltimore Pharmacist Charged with Fraud in Counterfeit Drug Case

1,700 pounds of suspected counterfeit drugs was found in two Medicine Shoppes in Maryland last year - In addition, the owner is being charged with Medicare and Medicaid fraud.

A year ago we wrote regarding two Medicine Shoppes in the Maryland area that had been cited for having expired drugs on their shelves. This, however, does not even begin to tell the true story of expired drugs, counterfeit drugs, Medicare and Medicaid fraud, and the exportation of these drugs to Africa.

Pamela Arrey, a Maryland pharmacist, has most recently been charged with Medicare and Medicaid fraud. She is accused of charging about $350,000 to the federal insurance programs for drugs she never dispensed. In fact in some cases she billed for prescriptions the patients did not even request.

Last July, she was charged with mislabeling and selling counterfeit drugs when nearly 1,700 pounds of suspected counterefeit drugs were found at one of Arrey’s two Medicine Shoppes in Maryland. The durgs valued at $749,000, were medications to help epilepsy patients control seizures. Mislabeled, expired and suspected counterfeit drugs, including those designed to help fight breast cancer, were also found at Arrey’s second Baltimore Medicine Shoppe.

In August of last year, the Food and Drug Administration(FDA) issued a press release warning to consumers who purchased prescriptions from Arrey’s pharmacies that the following drugs could be expired or counterfeit:

* Lisinopril (20 milligrams)
* Guaifenesin/Dextromethorphan (600 mg and 1000 mg)
* Gabapentin (100 mg, 300 mg and 400 mg)
* Metoprolol (50 mg)
* Nifedipine (30 mg)
* Diclofenac Sodium (30 mg)
* Glucophage (500 mg Extended Release)
* Glucovance (125 mg and 500 mg)
* Glipizide/Metformin (2.50 mg/250 mg)
* Furosemide (20 mg)
* Tamoxifen Citrate (10 mg)
* Metformin HCl ER (500 mg)
* Calcitrol (0.25 micrograms)

“The health and safety of Arrey’s pharmacy customers has been put in danger as Arrey, through her pharmacies, dispensed misbranded and expired drugs,” FDA Special Agent Matthew Rosenberg wrote in a sworn statement.

For more on this story....