XStream Systems Stories and News for the Week of November 21, 2008

Here are a few of stories that we at XStream Systems think are noteworthy as it relates to the ever growing issues of counterfeit and adulterated medications. As counterfeits become more prevalent globally and domestically, science will play a strong role in protecting our nation’s supply chain and molecular pharmaceutical authentication will be an important part of solving this global problem:

Israel joins world effort to halt counterfeit drug sales
Inspectors went to the Tel Aviv package warehouse of the Israel Postal Company and other facilities last week, seizing drugs prohibited in Israel and others suspected of being counterfeit that had been shipped from India and China.

FDA: FDA Hosts Its First Science Writers Symposium
Recently FDA experts met with more than 50 journalists and science writers at the FDA’s first Science Writers Symposium. At this day-long event, FDA’s scientists and physicians presented on such research as the science behind the Salmonella outbreaks, melamine adulteration of food substances, and nutrigenomics – an emerging field that has the potential to prevent disease and maximize health by using genetic profiles to tailor what we eat. FDA experts also presented their novel discoveries to prevent pandemic flu, identify contaminated heparin, and analyze the safety of drug-eluting stents down to the molecular level.

FDA Warns Public of Extortion Scam by FDA Impersonators
The U.S. Food and Drug Administration is warning consumers about a fraudulent scheme to extort money from consumers by callers who falsely identify themselves as "FDA special agents" or other FDA officials. Several instances have been reported to the FDA of calls enticing consumers to purchase discounted prescription drugs by wiring funds to one of several locations in the Dominican Republic.

Daschle Accepts HHS Cabinet Post
Former Senate Majority Leader Tom Daschle has accepted President-elect Barack Obama's offer to be Secretary of Health and Human Services.

Will the FDA’s China Office Protect US Consumers?

The Washington Post, New York Times, Bloomberg News and a variety of other media outlets all have stories today announcing the Food and Drug Administration (FDA) deploying staff and opening its first office in Beijing, China.

This is the FDA’s reaction to China’s increasing role as a major exporter to the United States in food, drug and consumer products. Unfortunately China is also the world leader in exporting counterfeit, adulterated and contaminated products and the FDA is attempting to slow down the dangerous impact to US consumers. Recent high profile examples of counterfeit, adulterated and contaminated products include the recent heparin contamination which resulted in over 250 deaths in the US, the pet food contamination with melamine and the huge issue over lead paint on children’s toys. Most experts agree that these examples of toxic products within our consumer supply chain represent only a fraction of the dangerous products that are reaching our shores on a daily basis.

Apparently the FDA has plans this year to open up other offices throughout China and certify third-party inspectors who can approve and qualify the safety of exports to the United States.

The question is when will the FDA deploy a materials analysis technology that can look inside product packaging to inspect and protect the US consumer instead of throwing bodies at a high expense to attempt to catch the problem before it gets into our supply chain?

Stay tuned, we at XStream Systems are trying our best to introduce our revolutionary technology as a solution to catching the problem before it impacts our nations health.

Weekend News Highlights International Epidemic of Counterfeit Medications

XStream Systems found an op-ed article in the New York Times regarding the health epidemic in the third world regarding poor quality and counterfeit medications and a story reported by Bloomberg News about the seizure of millions in counterfeit malaria, HIV and tuberculosis drugs in SE Asia.

The phenomenon of counterfeit, adulterated and contaminated pharmaceuticals continues to grow and flourish as our global economy declines.

Until technology solutions such as XStream’s XT250 become ubiquitous, this malady will continue to proliferate and impact those beyond the third world.

Op-ed: More needs to be done to ensure safety, quality of drugs in the developing world.

In an op-ed in the New York Times (11/15, A21), Roger Bate, author, director of the health advocacy group Africa Fighting Malaria, and resident fellow at the American Enterprise Institute, wrote that, "if aid organizations are serious about combating the spread of deadly diseases in the developing world, they must do more to ensure the safety and quality of drugs."

According to Bate, the importations of counterfeit medicines "are only part of the problem." Bate explained that in order "deal with the scarcity of drugs, many poor governments have turned to local production." Still, "local producers often make low-quality" medicines. "Many poor countries," he wrote, "lack the regulatory structure needed to monitor safety and effectiveness. Some do not even have laws against selling substandard drugs, and none have sophisticated agencies like the" Food and Drug Administration (FDA).

Bate concluded that aid organizations must first "give technical and financial support to governments' sincere efforts to maintain strict drug inspection standards." Second, they should "always refuse to subsidize any low-quality drugs." And finally, organizations need to "insist that only brand-name and generic products approved by stringent drug agencies like the FDA be distributed."


Interpol seizes more than $6.65 million of counterfeit medicines in Southeast Asia.

Bloomberg News (11/17, Bennett) reports, "Interpol seized more than $6.65 million of counterfeit medicines against malaria, HIV, and tuberculosis in Southeast Asia and made 27 arrests, disrupting the region's fake drug trade for the second time in three years."

According to Aline Plancon, an officer involved in the "five-month investigation called Operation Storm," officials "seized more than 16 million pills, including fake antibiotics for pneumonia and child-related illnesses." Operation Storm "involved almost 200 raids" conducted across "Cambodia, China, Laos, Myanmar, Singapore, Thailand, and Vietnam."

Health officials were particularly concerned by "copies of a class of malaria drugs called artemisinins." Fake "artemisinin-based treatments containing small amounts of the medicine are helping the parasite responsible for malaria to evade authentic drugs in patients near Cambodia's border with Thailand, a recent study showed."

Government Seizes Contaminated Heparin STILL in the US Supply Chain?

In a news report, the Federal Agents seized contaminated Heparin a full seven months following the recall. Read the full story.

It seems shocking that after confirmed deaths of over 250 people that this type of product would still be in the domestic supply chain. “I think that this is an illustration of how many gaps that remain in the process and the system that leaves the US consumer at risk,” stated Alan Clock, SVP of XStream Systems. “Those within the supply chain that believe that they are not vulnerable or that the burden of product safety lay elsewhere are in for a rude awakening when not if the next counterfeit or adulterated products hit their warehouse or store shelves.”

To learn more about XStream Systems revolutionary materials analysis solution to counterfeit, contaminated or adulterated products please visit us at www.xstreamsystems.net.

How do Recalls Affect Consumer Loyalty?

A new study release by Deloitte shows that safety issues costs companies millions of revenue dollars. The study shows that when consumers hear of product safety and/or quality issues, more than half of them switch products for nine months or more, increasing the likelihood that they would discontinue the brand use entirely.

Modern consumers are less tolerant of recalls and over 49 percent are extremely concerned with product safety. Those population segments with the greatest concern are women (53%) and seniors (56% of those over the age of 55).

In addition, recent recalls from China have left the public with a distrust of items manufactured there. Over 73 percent stated they were extremely apprehensive about items manufactured in China.

To see how loyalty is affected, just look at last year’s recall issue where thousands of pets died from tainted products resulting in the largest recall of pet food in US history. Today, pet owners, even in this economic downturn, are reluctant to change to a cheaper pet food. ….

A recent article by the associated press stated “That's because many pet owners, who upgraded their kibble after contaminated pet food killed or sickened thousands of animals last year are leery of switching back…..”

So what can companies do to assure their customers that their products are safe? Consumers want safety information on the package, on the company website, and from the government. Furthermore, testing materials for consumer safety is a necessity.

Build and they shall come – But, test and assure and they will stay.

Pharmaceutical Regulatory News Headlines - Week of October 31, 2008

In the United States, Halloween is the day for Tricks and Treats. But - Globally regulatory authorities have Penalties not Treats for would be counterfeiters.

Here are a few of stories that we at XStream Systems think are noteworthy as it relates to the ever growing issues of counterfeit and adulterated medications. Global regulatory authorities are now recognizing the increasing threat these fraudulent products place on their citizens and are taking legal actions to discourage it:

Saudi Arabia: Local Markets Flooded with Counterfeit Drugs
Agreements were made on Tuesday to step up legal action against counterfeiters in Saudi Arabia to ensure consumer safety. According to Abdullah Al-Abdelgader, a pharmaceutical manufacturing director, counterfeit drugs account for around 30-40 percent of medicines sold at local pharmacies and hospitals in Saudi Arabia and expose consumers to great risk. In the Gulf area, the counterfeiting economy accounts for $13 billion, with a share of $4 billion in the Saudi market. ("Some 30-40% of Medicines Sold Locally 'Are Counterfeit', Says Manufacturer," Saudi Gazette, October 22, 2008)

FDA Oversight of Foreign Drugs Lacking
The Food and Drug Administration is failing to keep accurate data about foreign drug facilities it is supposed to oversee and often doesn't follow up warning letters with inspections, according to a report by the Government Accountability Office. The House Energy and Commerce Committee introduced a bill that would mandate foreign inspections at a rate close to that of FDA inspections of U.S. plants. U.S. companies are inspected about every 2.7 years, but the rate for foreign inspections is roughly once every 13 years. ("FDA Is Faulted for Oversight of Foreign Drugs," Wall Street Journal, October 21, 2008)

Nigeria: Government Takes Steps to Block Counterfeit Drugs
The National Agency for Food and Drugs Administration and Control (NAFDAC) has blocked 22 Indian pharmaceutical companies from importing and distributing drugs in Nigeria. The agency has outlawed the use of about 40 imported drugs in the country, describing them as potentially dangerous for human consumption. As part of its efforts to curb drug counterfeits, NAFDAC is advocating for greater public education and awareness. ("Fake Drugs: NAFDAC Bans 22 Indian Firms," AllAfrica.com, October 22, 2008)

XStream Systems thinks that its penetrating authentication technology can be an integral part of the comprehensive solution to this global problem.

Economic Downturn Means Counterfeit Medications Likely to Increase

As the economies around the globe continue to teeter and decline, it seems apparent that those same dynamics will trigger an increase in the criminal enterprises that deal in counterfeit medications.

This next year, we anticipate a sharp increase in reported instances of counterfeit pharmaceuticals discovered within the pharmaceutical supply chain.

“All of the economics drivers that are driving the economy down, give counterfeiters the perfect environment to flourish, “stated Alan Clock, Senior Vice President at XStream Systems. “Consumers and healthcare providers that are looking for cheaper medications often look outside of the secure sources and can easily fall prey to unscrupulous suppliers who may be selling counterfeit or adulterated medications.”

As consumers look for value in purchasing medications, it is important to buy products from established, licensed drug stores. Only buy products on-line that are affiliated with a national chain drug store or licensed pharmacy benefit organization.

Most importantly, remember, if it sounds too good to be true…it probably is. Let the buyer beware, especially when you are buying your medications in a troubled economy.