Thieves Commandeer Pharmaceutical Delivery Truck and Abduct Driver

Police report of another pharmaceutical shipment hijacked by gunmen.

The Baltimore Sun reports on the story of a pharmaceutical delivery driver who was abducted December 13th while making his deliveries in Baltimore by thieves who made off with a truckload of drug products

Highlights from The Baltimore Sun article include:

• Police called the morning heist “incredibly thought-out,” and were looking for three suspects.

• The 55-year-old driver was forced at gunpoint into the back of his delivery truck and transported to an unknown location where the suspects unloaded about 80 crates of drug products.

• “The value of the drugs is significant,” said Baltimore Police spokesman Anthony Guglielmi, who said he could not place a dollar figure. “We believe the individuals responsible might have had knowledge about where and when the truck was going to be.”

• Guglielmi said police were in contact with the local FBI and DEA.

Clearly theft of prescription pharmaceuticals is proliferating given the high value and additional profitability of both the product and their packaging.

Organized criminal gangs are seizing the high profits and relative low risk in the criminal activity of pharmaceutical theft and drug counterfeiting.

The crime is has a double return to the criminal-prescription drugs are a valuable commodity and their packaging, used in the introduction of fraudulent, adulterated or counterfeit goods carries equal significance.

Members of the pharmaceutical supply chain must be on guard to protect their inventories from theft and fraudulent, adulterated, sub-standard and counterfeit drugs.

Consumers need to be made more aware of the prevalence and danger of bogus medications.

To read the entire Baltimore Sun article, visit: http://weblogs.baltimoresun.com/news/crime/blog/2010/12/thieves_commandeer_pharmaceuti.html

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

Health Minister: Proliferation of Counterfeit Drugs More Serious Than Drug Trafficking

The proliferation of counterfeit pharmaceutical drugs has become a global problem more serious than illegal drug trafficking.


The China Post is reporting on comments Taiwanese Health Minister Yang Chih-liang made during a press conference recently.

According to the story in the China Post:

-The government has been strongly cracking down on counterfeit drugs since March; as of September, the number of TV ads featuring fake medicine increased by 260 cases while the amount of the fake drugs confiscated is 4.1 that of the year before.

-Yang said in order to combat counterfeit drugs, authorities must tackle manufacturers, distribution, promotion channels and educate the public all at once.

-Pharmaceuticals are usually issued by doctors and pharmacists with prescriptions and proper doses, Yang said, adding that the public needs to develop the mindset that while drugs can cure illness, it can also become a poison.

-Aside from the DOH, the Ministry of Justice, Ministry of the Interior, Ministry of Finance, Coast Guard Administration, the National Communications Commission, the Government Information Office and Consumer Protection Commission have all come together to crack down on fake drugs.

-The total number of illegal fake pills confiscated from January to September is 7,341,958, 4.1 times that from last year.

Secure Pharma Chain encourages all regulatory agencies to take a more aggressive approach in cracking down on this dangerous criminal activity and in educating the general public.

It is important that members of the pharmaceutical supply chain take proactive measures in protecting their inventories and interdicting illicit, adulterated, fraudulent and counterfeit medications.

To read the story in the China Post, visit: http://www.chinapost.com.tw/taiwan/national/national-news/2010/11/01/278201/Proliferation-of.htm

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

Securing Pharma: California Task Force Will Tackle Online Fake Drugs Trade

A task force has been created by the US Attorney’s Office in San Francisco to combat counterfeit pharmaceuticals and money laundering on the Internet, according to a report from the Pharmaceutical Cargo Security Coalition.

Securing Pharma in their September 22nd post reports on a new Federal task force specifically set up to handle fake drugs.

According to the Securing Pharma:

• Working with Immigration and Customs Enforcement and the Internal Revenue Service, the first focus of the task force will be counterfeiting activities in the Northern Judicial District of California, but the intention is eventually to expand its focus nationwide and even overseas.

• The team’s location is considered to be strategic because of the high density of Internet financial service vendors on the west coast of the USA, including iOffer, eBay and PayPal.

• "Any transaction(s) through these companies technically give this group legal venue on future investigations outside of the Northern Judicial District of California, as well as abroad," commented PCSC.

This new task force is obviously a huge step forward as it relates to taking the fight to these criminals who have for too long been able to ply their deadly wares directly to the consumer.

Secure Pharma Chain endorses and encourages all regulatory oversight in combating fraudulent, adulterated and counterfeit drugs. Secure Pharma Chain encourages all members of the pharmaceutical supply chain to take proactive measures in securing their inventories from this criminal element and their deadly, bogus medications.

To read the entire Securing Pharma blog post, visit: http://www.securingpharma.com/40/articles/585.php.

To learn more about anti-counterfeiting technologies designed for pharmaceuticals, visit: http://www.xstreamsystems.net/.

Pharmaceutical Security Institute: Global Seizures Chart

The Pharmaceutical Security Institute has released a graph showing global seizures of counterfeit, illegally diverted and stolen pharmaceuticals from 2002 to 2009.

Additionally PSI charted the seizures of illegal pharmaceuticals in 2009.

Both charts were published in the September 2 issue of The Economist.

The statistics are somewhat troubling to those in the know, especially given what most consider fragmented regulatory and law enforcement world wide. In many countries there is little consideration or resources allocated to dealing with the criminal act of adulterated, fraudulent and counterfeit medications. Which is unfortunate given its deadly consequences.

Secure Pharma Chain believes that the pharmaceutical supply chain and it members must lead the way by deploying solutions and technologies to secure the supply chain and authenticate inventories to protect their industry and most importantly the consumer.

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

Counterfeiting, Adapt or Perish

By: Alan Clock, Senior Vice President, XStream Systems

"Adapt or perish, now as ever, is nature's inexorable imperative." - H.G. Wells

The following is a re-post of a Secure Pharma Chain commentary blog originally posted in February 2010.

For those of us knowledgeable about the issue of counterfeiting, we have long been aware of the huge growing menace that has seemingly lurked in the shadows of the collective consciousness of the public at large for some time now.

Even for those who have been at the forefront of this serious threat, which the FBI dubs “the crime of the 21st century”, currently there seems to be a heightened sense of concern about how quickly this criminal activity is proliferating. It would appear now that this threat is advancing well beyond even our own alarmist predictions.

To date, much of the death and destruction associated with counterfeiting activity has occurred off the radar screen from the populace of privileged, developed nations and instead in the isolated world of underdeveloped areas and their residents.

For some of us with the advantage of a prosperous free market system, we have been somewhat immune to the spectacle of the criminal poisoning of disadvantage populations, which happens routinely in Africa and Asia by the purveyors of this insidious transgression.

In 2010, the widely accepted World Health Organization’s estimate is that pharmaceutical counterfeits are a $75 billion industry with an annual growth percentage of 12-16%. The World Customs Institute estimates that food counterfeiting is a $49 billion annual enterprise.

According to the study of Counterfeiting Intelligence Bureau of the International Chamber of Commerce counterfeit goods make up conservatively 5 - 7% of World Trade which the International Anti-Counterfeiting Coalition calculates would make the current global counterfeit economy the world’s biggest single business.

We now find ourselves in a perfect storm that will expand counterfeit criminal activity well beyond our wildest estimates and make it far more deadly in scope and size. The primary elements feeding this calamity include:

· a worldwide economy in a downward spiral

· ineffective regulations and laws on the crime of counterfeiting

· spotty or careless enforcement of existing laws on counterfeiting

· disjointed supply chains that cross multiple governmental boundaries and jurisdictions

· huge taxes on critical commercial markets like health care that are squeezing both the business and the consumer to look for cheaper goods

· a collective lack of knowledge and leadership by governments around the globe to protect their constituents

· industries that choose to ignore the threat to their businesses instead of protecting their brand and customers

· a collective lack awareness of the deadly nature of the threat of counterfeits by consumers worldwide, most consider this a harmless act

Until now, this criminal activity, although grand in its size has really been driven by single individuals or disparate organized entities that realize how lucrative and safe this nefarious criminal activity has become. Criminals understand that counterfeiting is the perfect crime:

· there are few ways to get caught

· if they do get caught their activity carries almost no significant ramifications

· most often their crime will not be discovered for some time giving them plenty of time to cover their tracks and escape

· they have a global marketplace where they can carry out transactions anonymously in cyberspace

· the profit margin derived from counterfeiting transcends what most businesses make in a legitimate activity

Even as this perfect crime expands to educated and developed nations, we now seem at the precipice of something far more dangerous and deadly as this menace seems likely to evolve into something much larger in size and scope and far more insidious as a whole.

Many experts now fear the inevitable, when terror organizations, who are not driven by greed but rather destruction, realize the relative ease and deadly effectiveness that a purposeful counterfeiting event could trigger in a region or nation. Be it in a consumer good, food stuff, electronics or medication, one single, simple adulteration could literally harm millions with relative impunity.

Adapt or Perish. The time is now for governments, industry and consumers to understand the need for solutions to protect themselves from the various nefarious sources that threaten their health and well being.

Today there are many technologies and services available that can offer protection to industry and consumers from those who would seek to profit or cause destruction. Leaders in governments and industry around the globe need to act now to protect entire populations.

Although no one solution, to date provides a single, "iron clad" solution to this scourge, when appropriately layered, these existing solutions can and do create effective and efficient security to protect supply chains and consumers from fraudulent, adulterated and counterfeit products.

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

Counterfeit Pharmaceutical ROI

The following quote from Martin Van Triest, Interim Director of Rx-360, illustrates the high profitability of counterfeiting pharmaceuticals:

“If a counterfeiter invests $2,000 in faking a DVD, he may turn that into $20,000; if he invests $2,000 into faking cocaine, he may turn that into $200,000; but if he invests $2,000 into faking a pharmaceutical drug, he may turn that money into $2 million! At the same time, the punishment for getting caught counterfeiting pharmaceuticals is far less severe than for counterfeiting illegal recreational drugs such as cocaine. “

To learn more about solutions to fight counterfeit pharmaceuticals, visit: http://www.xstreamsystems.net/.

“Medicine Mafia” Supplies Fake Drugs to 50 Trade Union Hospitals

Lives at Risk – In the Name of Greed

Corruption, greed, and scandal have hit the headlines in Argentina. The crowds stand accusingly of those in charge of protecting them. The sense of betrayal can be heard in their voices as they scream “Assassin!” as the deputy director of a union health clinic is arrested by police for distributing fake medication to cancer, AIDS, hemophiliacs and other severe illnesses.

The majority of Argentina's workforce gets healthcare through schemes run by their respective trade unions. A group of pharmaceutical businessmen, now dubbed the 'medicine mafia' have been accused of distributing fake, expired, stolen, and counterfeit medication to union-run hospitals.

One union official, Hugo Dessal, who blew the whistle on the operation, asks why both union-run hospitals and regulatory officials did not question the hundreds of adverse reactions reported in the last five years. Doctors and cancer patients became suspicious when medications did not cause hair loss.

Investigators are now looking into a total of 50 trade unions suspected of purchasing the fake medication either knowingly or unknowingly. The scandal deepens as other union and government officials are investigated including the president of the Bank Clerk Union, the wife of a murdered pharmaceutical company owner, and even president Cristina Kirchner, whose election campaign funds may have benefited from the sale of these adulterated drugs. It impossible to say how long this has been going on, but tens of thousands are expected to have consumed fake drugs.

And the whole incident leaves many asking the question - How many have died in the name of GREED?

Counterfeit Drug Situation Like the Wild West

The counterfeit drug trade has changed over the last decade. Prominent Leaders in the pharma industry all agree, counterfeiters have become more sophisticated. This has presented challenges to manufacturers to protect the brand security and safety of their products.

As Pat Ford, Pfizer's Senior Director for Global Security, said the situation is "like the Wild West," which poses a particular problem for those dispensing the drugs. "It gets to the point that pharmacists can't tell the difference. That's why we educate them on features in the packaging that help distinguish the real from the fake. And it's not just an international problem, but one unfolding right here in the United States.

UPS Supply Chain Survey: Nearly Half Worry about Product Tampering and Counterfeiting

In UPS’s 2nd Annual Supply Chain Survey, conducted by Harris Interactive, there was a somewhat surprising discovery as it relates to fraudulent and counterfeit products in the supply chain.

The survey was reported in the June 2009 issue of Pharmaceutical Commerce.

In the survey, decision makers at bio-pharma and med device companies were asked a variety of questions to identify supply chain issues beyond simple transportation and delivery.

The somewhat surprising discovery was that 48% of the large company respondents (companies with revenues in excess of $1 billion annually) while 34% of smaller companies, listed product tampering and counterfeiting as one of their biggest supply chain concerns for the year.

Pharmaceutical Commerce is quoted in the June 2009 issue:

It is worth noting that nearly half (48%) of large-company respondents cited product tampering and counterfeiting as a concern, which belies the relatively quieter scene in drug pedigree, tracking and tracing as a result of the postponement of the pedigree rules in California.

This survey validates much of what XStream Systems is finding in the pharmaceutical supply chain as well. Although much of the pressure has been lifted from the delayed pedigree rules, there is a realization among decision makers that there remains a significant amount of stress with few solutions within the supply chain as it relates to fraudulent, tampered and counterfeit product. To date many key executives have seemingly ignored the threat of increased liability and brand erosion because they have few if any solutions to adequately meet the issue. Pedigree and track and trace technologies although mandated in specific states, provides minimal protection against diverted products but do nothing to decrease their liability and protect their inventories from counterfeiting or tampered products.

XStream Systems, with its revolutionary EDXRD technologies, has a technology solution that enhances the ability of the members of the supply chain to authenticate the product, within its sealed container, without destroying or degrading the medication. This solution, allows the user to authenticate and verify the contents of the product, not just the package and properly secure their inventories and overall liability.

To read the June 2009 article in Pharmaceutical Commerce, visit: http://www.pharmaceuticalcommerce.com/frontEnd/main.php?idSeccion=1239.

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

CRS Report for Congress: Intellectual Property Rights and International Trade

The Congressional Research Service (CRS) prepared a report on Intellectual Property Rights and International Trade. The report is authored by Shayerah Ilias and Ian F. Fergusson and was published in July 2008. There were many interesting pieces of information as it relates to the pharmaceutical supply chain and although somewhat dated the data points are very relevant as it relates to the size, scope and impact on commercial interests globally.

In the opening summary, Ilias and Fergusson wrote:

“This report provides background on intellectual property rights (IPR) and discusses the role of U.S. international trade policy in enhancing IPR protection and enforcement abroad. IPR are legal rights granted by governments to encourage innovation and creative output by ensuring that creators reap the benefits of their inventions or works and they may take the form of patents, trade secrets, copyrights, trademarks, or geographical indications. U.S. industries that rely on IPR contribute significantly to U.S. economic growth, employment, and trade with other countries. Counterfeiting and piracy in other countries may result in the loss of billions of dollars of revenue for U.S. firms as well as the loss of jobs. Responsibility for developing IPR policy, engaging in IPR-related international negotiations, and enforcing IPR laws cuts across several different U.S. Government agencies. The main structures for coordinating interagency efforts are the National Intellectual Property Law Enforcement Coordinating Council (NIPLECC) and the Strategy Targeting Organized Piracy (STOP!).”

Here are some of the interesting pieces of information contained within the CSR report as it relates to pharmaceuticals:

• Department of Homeland Security (DHS) provides data on counterfeit goods seized by category. Seizures of counterfeit pharmaceuticals increased significantly, from $2.3 million in 2006 (1% of total) to $11.1 million in 2007 (6%).


• According to U.S. customs data, pharmaceuticals accounted for only 1% of all goods seized in 2006, with a domestic value of $2.2 million. Still, there is growing concern about the vulnerability of the U.S. medicine supply and distribution chain, especially in light of recent high-profile cases about counterfeit drugs entering the United States.


• PhRMA provides annual estimates of U.S. pharmaceutical industry losses from foreign violations of data exclusivity and patent protection. In its 2007 Special 301 submission to the USTR (covering the period of October 2006 to September 2006), PhRMA contended that its member companies sustained damages totaling an estimated $21.7 million from data exclusivity and patent violations in 24 countries. Damages reported in the 2007 submission were nearly double those reported in the prior year’s submission (covering October 2005 to September 2005). While the total loss associated with IPR infringement grew, damages as a percentage of sales declined from the 2006 submission to the 2007 submission. At the time of reporting for 2008 Special 301 submissions, PhRMA was not able to provide damage estimates due to trade barriers associated with intellectual property protection and market access.


• U.S. CBP and L.A. Strategic Trade Center, “FY2006 Top IPR Commodities Seized,” November 7, 2006, [http://www.cbp.gov]. Because of the costs and resources required to conduct physical inspections, many counterfeit products escape inspection, making it difficult to determine the fraction of pirated goods caught. As a result, seizure statistics from the DHS agencies do not reflect on the overall size of the counterfeit market and total losses.

As we have said many times, XStream Systems believes in a comprehensive strategy to combat counterfeit and adulterated pharmaceuticals. XStream believes that this solution should include verification and screening of the materials inside their unit of sale containers. XStream’s XT250, using EDXRD, allows for the complete verification of the material, without opening the container or destroying/degrading the product being authenticated.

To view the CRS report, follow this link:
http://fpc.state.gov/documents/organization/109543.pdf

UK Associations Supporting MHRA Requirements to Combat Drug Counterfeits

Medical News Today reported that several prominent pharmacy associations within the UK are supporting proposals for the MHRA to strengthen the pharmaceutical supply chain and reduce the risk from counterfeit medications.

This endorsement, seemingly unprecedented within the US and EU, is another telltale sign that the impact of fake and counterfeit medications within this highly regulated and developed nation has reached a point where significant measures need to be in place to protect the pharmaceutical supply and its consumers. Hopefully other pharmacy organizations within the US and EU will follow suit to protect their populations.

Read the story below:

Pharmacy Bodies Response To Reducing The Risk From Counterfeit Medicine

(March 26, 2009) The Association of Independent Multiples (AIMp), Community Pharmacy Wales (CPW), Company Chemists Association (CCA), The National Pharmacy Association (NPA) and The Pharmaceutical Services Negotiating Committee (PSNC) have responded to the MHRA consultation on measures to strengthen the medicines supply chain and reduce the risk from counterfeit medicines.

The pharmacy bodies support the proposals for the MHRA to strengthen the requirements for holding a Wholesalers dealer licence (WDL) and also the new proposals for Responsible Persons with the establishment of a Code of Conduct against which Responsible Persons can be judged. The MHRA should also have the power to remove a Responsible Person from the register. The bodies also support the introduction of a due diligence obligation for the holder of a WDL.

Whilst supporting the proposals to ensuring that potential offences relating to counterfeit medicines are provided for in legislation the bodies oppose the introduction of an offence for failing to report a suspect counterfeit medicine. A criminal sanction is inappropriate for failure to report.

To view the article visit www.medicalnewstoday.com

Do counterfeiters have no shame?

Who would target innocent children in the pursuit of money? Fourteen babies have been hospitalized with kidney stones after drinking what is thought to be counterfeit baby formula. This recent scheme seems targeted toward the poorer rural areas of China where young families have turned to discounted milk powder to lower their household costs.

Why did they choose infant formula? – Well, just as in the case of the adulterated heparin, as demand exceeds supply so does the increased risk of susceptibility to counterfeiting. Over the past few years, increases in the cost of raw milk coupled with the decrease of dairy farming have further complicated this matter.

Sanlu, one of the four largest powdered milk companies in China, has stated that the product labeled as theirs is a fake and has sent their own personnel to investigate. This, however, is little consolation to the poor rural families whose babies are now suffering.

This is not the first case of deadly Chinese baby formula. In 2004, thirteen infants died and 170 were left malnutrition and underdeveloped by counterfeit formulas with little or no nutritional value which were sold under 45 different brands and manufactured in over 141 different factories.

The mere expanse of the operation is disheartening and its implications frightening in light of the fact that China is one of the largest exporters in pharmaceutical ingredients to the U.S.

We must fortify our inspection and authentication methods to ensure our brands integrity. Fool me once shame on you …. Fool me twice shame on me.

"Drug counterfeiting underestimated for too long..." states the Chairman of Sanofi-Aventis

As reported by the Dow Jones News Service, "Drug counterfeiting has been underestimated for too long, Sanofi-Aventis Chairman said Thursday, also calling for more action from the European Union."

At the annual meeting of the European Federation of Pharmaceutical Industries and Associations, Jean-Francois Dehecq said that "drug counterfeiting 'used to be marginal, it is now totally industrialized.'" Counterfeit pharmaceuticals "represented approximately EUR45 billion in sales in 2006, making up for almost 10 percent of the world pharmaceutical market the World Health Organization estimates.

Link to the full story at Dow Jones.

The Secret of CSI: Miami’s Lab

CSI:Miami draws its viewers to the edge of their seats by spinning out scenarios which catch a criminal and all involved during a day’s work. But how do they do it week after week?

First - you start with a crime lab that would make most real-life crime scene investigators green with envy. The lab boasts modern day tools like mass spectrometry and DNA analysis. The equipment portrayed on the series is very real, but at a cost prohibitive price for most crime labs’ budgets.

Add to the superior equipment, the almost super hero ability to complete tests before the end of day and sometimes within hours. One of these super technicians is Eva LaRue, who plays DNA expert Natalia Boa Vista on the show. She can even extract a single drop of perspiration from a leaf and tell you who was at the crime scene.


Please click the Play button

The reality is lab tests are not completed instantaneously. Once a sample is submitted, it could take weeks for the results to be returned. It is for this reason, screening tests are helpful. These are generally less expensive than outsourcing to an analytical lab and less time consuming.

One industry looking for more efficient screening methods is the pharmaceutical industry. Guarding itself against counterfeits and adulterated medicine is an ever increasing task. They use a variety of security measures currently, but most are focused on the packaging rather than the material itself; such as holograms or special inks.

A viable material screening solution is the XT250 System, which can identify the crystalline structure of a substance by matching it against its standard. By rapidly testing products such as pharmaceuticals in their sealed packages, wholesalers can quickly determine what “passes” and what “fails” industry standards.

CSI: Miami may have the best equipment on T.V., but in real life, the XT250 System is as close as we get to rapid drug authentication.

Tip of the Iceberg

When giving presentations across the country, there is one slide in particular that seems to stand out and really hit hard on the counterfeit pharma issue and what is really out there. This image contains a quote which says it all. It states, “Most of the counterfeits are detected largely by accident. It means that we are just seeing the tip of the iceberg...We presume there is an iceberg to be found somewhere under the tip, but no one has been able to put their head under the water.” By Valerio Reggi, World Health Organization (WHO) 2007.