Ahead of the Curve

Charles R. Earl, M.A., ABD
CEO, Communication Connections

The major portion of our discussions on these pages has focused on the impact of counterfeiting and adulteration on patient safety and supply chain reliability. This is where the primary consideration should be, but there are other important factors in play, too. Much of the recent news coverage has chronicled the challenges facing the national … and global economies. Corporations and businesses everywhere are belt-tightening, downsizing or closing. Some businesses will thrive in this environment by becoming leaner and more efficient while others will enter “panic mode” and never fully recover from these trying times.

From my experience as a business manager and as a corporate and business trainer, I have had the opportunity to witness how truly successful leaders cope with difficult circumstances. Although the “right now” requires intensely concentrated effort and resources, successful leaders never fail to look ahead to tomorrow. They do not abdicate their duties for visionary thinking and acting. They race ahead of the curve.

It is difficult for a corporate officer or manager to justify purchasing new technology when the market is uncharacteristically tough. Concentration is directed to monthly P&L’s, quarterly statements, and annual reports. Every nickel that can be saved and every penny pinched become important for day-to-day operations. “No major expenditures” and “no new commitments” become the rallying cries for weathering the economic storm. Count the pens! Inventory the paper clips! Use both sides of the printer paper! I could go on, but you get the idea.

While the market, the governments, customers and patients are clamoring for safer and more reliable pharmaceutical delivery, you cannot afford to retreat into a posture of preservation. You, as a leader, who wants to guide a leading company of the industry must seize the initiative. The old reliable aphorism “if you’re not moving forward, then you’re falling backward” is still true. Offer more for your customers—better service and safer product.

Imagine this scenario: A customer calls your office and asks you to submit an RFIP. This company is impressed with your innovative efforts to supply safe, trustworthy products as well as your obvious commitment to top-rate customer service. Another customer calls your competitor, and the receptionist responds,” I’m sorry, he can’t come to the phone right now. He’s in the supply closet counting paperclips.”

When, Not If, a Major Pharmaceutical Counterfeit Incident Will Impact the US Supply Chain In 2009

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

As I have traveled around the country speaking with many pharmaceutical industry and supply chain thought leaders in 2008, it seems apparent to me that all those in the know realize that the United States will shortly be facing a major health care crisis caused by the introduction of large amounts of counterfeit pharmaceuticals into the supply chain.

The question among these leaders is not if, but when.

I am predicting something in 2009. And it won’t be something as subtle as the counterfeit heparin which officially wasn’t a counterfeit, but poor manufacturing process caused by counterfeit raw materials. The number of casualties will go well beyond the 250 or so officially considered killed by the bad heparin. I am guessing we in the United States will be dealing with something that will affect thousands of lives this time. Unfortunately this incident or number of incidents, will force many within the industry and regulatory agencies to finally act aggressively and begin doing things that will actually solve the problem.

Just for the record, I consider counterfeit raw materials a counterfeit and officially labeling it otherwise does not make the consequences any less deadly. I don’t believe officials will be able to pass the next incident off as bad manufacturing practices, because likely it will not be quite as subtle.

I don’t like to predict doom and gloom, but my outlook for this healthcare issue is based on some pretty significant evidence that points me to this ultimate conclusion.

• The continued rise in the estimated counterfeit percentage of the supply chain globally. Most experts believe that globally, in third world and developing countries that up to 50% of the medication within their supply chain is counterfeit or adulterated.

• The rise in percentage of counterfeit and adulterated medications in the supply chain in non-third world countries. Some European countries estimate averages above and beyond 10% of the medications within their supply chain are counterfeit or adulterated.

• The fact that over 90% of the raw materials and 60% of the production of medication globally (including Europe and the United States) is now done in countries with some of the highest rates of counterfeit medications within their supply chain.

• High death rates in Africa and Asia based on either the consumption of counterfeit or adulterated medications or diseases like malaria which were not properly treated because of counterfeit or adulterated drugs.

• The FDA hastily opening three major field offices in China and the deployment of thousands of inspectors overseas in an overt but questionable effort to somehow police hundreds of thousands manufacturers and suppliers importing billions of tons products into the United States into hundreds of ports of entry.

• The fact that nearly every major pharmaceutical manufacturer and pharmaceutical distributor in the United States has had to deal with significant liability because of a counterfeit or adulterated medication within their brand or distributed through their companies. The reality is though even after spending millions in attorneys, court cases and settlements there is still not a significant deterrent or protection of their inventories, in fact now given the increased globalization these same entities are in fact more vulnerable now than they were ten years ago.

• The global economy as it continues its slide will continue to fuel individuals and well financed organizations to continue their harmful but profitable enterprises of counterfeiting medications.

• Finally and of most significance to me is the fact that when XStream deployed an XT250 system within a small secondary distributor in the Southeast United States, our system discovered four individual counterfeit medications within the first sixty days of authenticating their inventory.

There are many more “signs” or evidence that I could point to but I think that I have made my point. This is one of those "perfect storm" issues where all of the elements of a significant disaster seem headed for a major collision and the United States consumer is the tiny boat hoping to stay afloat and above water.

I hope I am wrong, but unfortunately, I know I am right. Maybe not about the exact date but now it is a matter of when, not if.

About the author: Alan Clock is a veteran of over 20 years within the pharmaceutical industry. He has served in senior positions with pharmaceutical distribution companies and disease management organizations. He is currently the Senior Vice President of XStream Systems, a high tech start up focused on a revolutionary solution to the authentication of pharmaceutical products within their sealed unit of sale. He can be reached at aclock@xstreamsystems.net. For more information on XStream visit their website at www.xstreamsystem.net.

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."