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Where Good and Bad Drugs Mix
Why drug importation poses real risks for American consumers

Katherine Eban
Medical Progress Today
March 16, 2006

In the ideal global marketplace, importing pharmaceuticals should be no more complicated or dangerous than importing beef or wheat. At least, that is what Newt Gingrich told an audience of pharmaceutical executives last September in a speech advocating reimportation. So long as the medicine we import travels through “secured corridors of distribution,” as he put it, current restrictions on commercial importation should be eased.

This argument sounds perfectly reasonable, but there is very little that is real about it.

When it comes to pharmaceuticals, most people in the First World enjoy a comfortable illusion: that medicine flows through the global marketplace in two entirely segregated streams. One is a pristine supply that moves through secured corridors of distribution, guaranteed to be pure and effective, if overpriced. The other is a black-market stream of potential counterfeits from third-world countries, hawked on rogue internet sites that only the most reckless bargain-seekers would patronize.

But the truth is that adulterated medicine routinely infuses the world’s legitimate supply, here and abroad. Counterfeits are not just relegated to bargain internet sites or to tin shacks in some distant Nigerian marketplace. They are everywhere, including our own trusted pharmacies, and those who produce them run increasingly sophisticated operations that seek to maximize profits and minimize detection.

While reliable numbers are hard to come by, the Center for Medicines in the Public Interest recently predicted that by 2010, counterfeit drug sales will reach $75 billion worldwide, almost doubling from estimated 2005 sales. The World Health Organization, which estimates that ten percent of the world’s medicine is counterfeit, recently noted that in wealthy countries, counterfeiters are no longer just targeting expensive lifestyle medicines such as steroids and hormones, but also lifesaving medicines to treat cancer and AIDS.

Are there any secured corridors? Consider Canada, our preferred destination for safe, less costly medicine. Last June, a brick-and-mortar pharmacy in Hamilton, Ontario dispensed counterfeit Norvasc, a life-saving heart medicine that was made entirely of talc. The coroner investigated patient deaths and determined that four were inconclusive and may have resulted from the counterfeits.[1]

Though the Royal Canadian Mounted Police arrested the pharmacy owner, months later investigators still don’t know exactly where the counterfeits came from or who made them. The medicine being dispensed was a mixture of real Norvasc, unapproved Norvasc from Turkey, and outright counterfeits; the admixture a typical strategy counterfeiters use to make detection difficult.

In the European Union, England has recently been hit with a wave of pharmaceutical counterfeiting. Within the last year, counterfeit versions of three popular drugs--Lipitor for cholesterol, Cialis for erectile dysfunction and Reductil for obesity--surfaced in the supply chain. Counterfeit Lipitor of a similar composition also showed up in the Netherlands. One British expert, Graham Satchwell, estimates that each year, 100,000 counterfeit drug imports enter Britain’s National Health Service.

Our safeguards are no better. From 2000 to 2004, the FDA’s investigations of counterfeit medicine increased by almost ten fold. Over a dozen counterfeit pharmaceuticals, from lifesaving cancer medicine to popular maintenance drugs, have landed on the nation’s pharmacy and hospital shelves and reached unsuspecting patients. Even the FDA’s most conservative estimate - that approximately one percent of our nation’s drug supply is counterfeit – amounts to some 35 million prescriptions a year. Some of the counterfeits discovered here have contained potentially deadly substitutions and dangerous relabeling: an injectable AIDS drug, Serostim, contained a fertility hormone instead; an injectable cancer drug, Procrit, was relabeled to appear twenty times the strength.

Conditions for drug counterfeiters have never been more favorable. They enjoy weak laws, minimal regulation, easy access to sophisticated pill-making and printing technology, soaring drug prices in First World markets and, most importantly, porous supply chains filled with middlemen whose trading and repackaging activities further obscure drugs’ already hard-to-trace origins.

In the United States, an exploding number of middlemen have opened the door to counterfeits. Some of these secondary wholesalers are little more than arbitrageurs, buying on the cheap from one another and reselling for a profit, often resorting to fraud or misrepresentation to obtain discounted and diverted medicine of unknown origin or purity. When resold to national wholesalers, this medicine winds up in our pharmacies and hospitals, its bargain-basement source obscured.

The nation’s three largest drug wholesalers, AmerisourceBergen, Cardinal Health and McKesson, recently pledged to stop buying pharmaceuticals from the secondary market and to only buy directly from drug manufacturers. While a step in the right direction, comprehensive federal legislation is needed to halt the flow of substandard medicine into our pharmacies.

The problem is exacerbated in the European Union, which encourages parallel trade, the selling of medicine from a lower-priced market into a higher-priced one. This parallel-imported medicine is then repackaged along the way to comply with the laws and language of the country it enters – a practice that invites counterfeiters to slip in fakes.

This practice means that we can’t selectively import drugs from one country and not another, opting for France while ruling out Estonia. Much of Europe’s medicine is now sifted up from cheaper markets like Portugal or the Baltic states, with fewer controls and greater risk of counterfeits. Every single security executive and investigator I have spoken to thinks that reimportation will open the floodgates to counterfeits. Already they are overwhelmed trying to control the expired, adulterated, counterfeit medicine pouring into the country every day, under the current nebulous “personal use” clause that allows individual Americans to purchase medicine from abroad, as well as the tide of bad medicine within our supply chain, spread by our own counterfeiters and diverters.

To be fair, Gingrich is hardly the only supporter of reimportation. America’s counterfeiters and diverters love the idea. It’s an opportunity to import substandard medicine from the world’s cheapest markets on a vast scale and resell it into the world’s most expensive one: ours.


  1. Editor’s Note: It can be very difficult to detect adverse events from counterfeit or substandard drugs. When seriously ill patients experience declining health, or die, a physicians' first instinct will be to suspect the natural course of the disease, not the medicine used to treat it. In addition, regulators like the FDA are primarily focused on ensuring the efficacy, safety, and manufacturing of the drug itself, not it’s secondary supply chain.

Katherine Eban, an investigative reporter and Rhodes Scholar, has worked for the New York Times, New York, the New York Observer, and ABC News. Her work has been featured on 60 Minutes, 20/20 and other national news programs. She is also the author of Dangerous Doses, which chronicles how stolen, compromised, and counterfeit medicines increasingly make their way into a poorly regulated U.S. distribution system, reaching unsuspecting patients whose lives depend on its effectiveness.

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