Counterfeit Drugs and the "Secondary Market"

James C. McAllister III, MS, FASHP, Pharmacy Times Editor, Health-Systems Pharmacy Section
Published Online: Thursday, July 1, 2004
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Over the last several years, the growing number of high-profile occurrences in which counterfeit drugs have been discovered on the shelves of hospitals and community pharmacies has made the topic of counterfeit drugs a great concern. Pharmacists, pharmaceutical manufacturers, distributors, and patients are all asking the question, how could these occurrences ever happen? The solution to the problem will be challenging, but the answer to the question is simple. Opportunity, technology, and greed are involved.

The traditional supply chain—manufacturer to distributor to pharmacy to patient—is now complicated by drug availability from secondary distributors and traders, Internet sites, reimportation entities, and compounding pharmacies. Almost all of these nontraditional sources are legitimate and make wholehearted attempts to guarantee their products' quality and origin. These sources, however, have technological capabilities that are associated with high-quality label production—including bar codes, repackaging, and acquisition by telephone or the Internet. These capabilities have enabled unethical individuals and businesses to capitalize on the opportunity to make an enormous amount of money with little risk.

Greed also drives some of our own colleagues to contribute to the counterfeit problem. Drugs are being diverted from the legitimate supply chain and resold at discounted prices (but at a sizable profit). Instances have been reported in which expired drugs have been relabeled and resold. The problem is compounded when these legitimate drugs are adulterated, repackaged, and resold.

Admittedly, there are many laws on the books that should deter counterfeiting, but the bureaucratic judicial and legislative processes already have been overwhelmed by the frequency and complexity of the fraud. One can only hope that criminals, including pharmacists, who are engaged in counterfeiting activities will receive severe penalties. If the national news media highlight successful prosecution and penalties, the deterrent will be even more effective. Additional technology—in the form of an enhanced bar code or a radio frequency identification tag—is being considered as a supplemental strategy to deter counterfeiting.

The wholesale drug distributors and the pharmaceutical industry are developing strategies to eliminate counterfeiting, but we may not warmly embrace the changes that occur. I recently received a letter from Abbott's Pharmaceutical Products Division, announcing its intent not to distribute its products through wholesalers or distributors that "participate in secondary market purchasing/trading activities." Although I applaud this bold decision, I do not look forward to a return to the 1970s, when we had to purchase directly from almost all manufacturers. Without a doubt, having to do so will add more cost to the system and will be a definite step backwards in supply-chain management.

We as pharmacists can take many steps to minimize, if not eliminate, the counterfeit-drug problem. First, we must ensure that no drugs are diverted from our places of business. We must strive to eliminate purchases from secondary-market purveyors, regardless of the temptation to improve operating margins. When legitimate supply-chain distributors acquire drugs from the secondary market, they must agree to be held accountable for the quality and integrity of the products they ship. Finally, we must hold each other accountable for guaranteeing the quality and integrity of our drug supply, and, when fraud created by greedy and unethical pharmacists is discovered, we must insist that they never again have the opportunity to practice pharmacy—ever!



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