Sunday, January 14, 2007

Real News about Fake Drugs

Last week brought an unprecedented motherload of counterfeit-related press releases and news stories. Line them up side by side and you’ll understand why most companies will be forced into DIY Supply Chain Security.

Let’s start with the bad news from last Wednesday: Significant Bipartisan Drug Importation Legislation Introduced in the Senate. I’ve written about the supply chains dangers of reimportation (See A Big Win for ... Counterfeiters and Politicians), so I find it highly ironic that the proposed legislation includes “drug safety” in its title. More irony: Wholesalers and importers/exporters absorb 80% or more of the price differences between European countries, so the savings will be minimal. (See London Calling: Fake Drugs Get Real from last August.)

The next day, EPCglobal ratified an international standard format for an electronic pedigree document. (Did anyone else besides me attend a celebratory pedigree bash this weekend?) The theoretical benefit of an ePedigree standard will be interoperability across the supply chain, most importantly (in my view) from wholesalers to retailers. SupplyScape, which now claims to be the “inventor of the electronic pedigree solution for the pharmaceutical supply chain” (can that be true?), issued follow-on press releases on both Thursday and Friday.

RxUSA (of PDMA-injunction fame) also jumped into the fray last week with its own 24-point plan for supply chain security, including their call for a "standardized Federal form for pedigree papers." This quixotic wish list is unlikely to get serious consideration, but I no longer doubt RxUSA's tenacity on these issues.

Unfortunately, we have to get retail pharmacies to buy only from wholesalers that supply pedigree in the very few states that have bothered to implement pedigree laws. (See Thank You for Buying Counterfeits.) SupplyScape claims that an impressive “200 million drug bottles” have electronic pedigrees already, but it’s not clear if a meaningful number are being read by dispensing pharmacies.

Curiously, The National Association of Boards of Pharmacy Warns About the Continued Dangers of Counterfeit Prescription Drugs on Thursday, but somehow neglected to mention EPCglobal’s ePedigree standard. Instead, the NABP chose to focus almost exclusively on non-U.S. cases of counterfeiting, apparently viewing consumers and Internet pharmacies as the problem.
While true, the NABP deftly sidesteps the culpability of retail pharmacies that buy outside the legitimate supply chain.

Savor the spin by comparing the NABP’s first bullet point about the Detroit indictment with the actual indictment, which focused primarily on cigarette diversion to avoid state taxes. (Thank you, Google!) Better yet, check out Doug Albers’ guilty plea on the DOJ website, which states: “Beginning in 2000, the Missouri Board of Pharmacy had advised Albers that he could not purchase pharmaceuticals from out-of-state distributors unless the distributor was licensed in Missouri. Albers admitted today that, despite those warnings, he had not taken any investigatory or prohibitory steps to confirm OTS Sales was only purchasing from Missouri licensed brokers.

Looks to me like Boards of Pharmacy have been asleep at the wheel. Perhaps that’s why Eliot Spitzer deputized Cardinal Health Inc (NYSE:CAH) to spy on its pharmacy customers. (See Cardinal's Sins.) Feel free to insert your own fox-and-the-henhouse joke here.

P.S. Last week’s rash of counterfeit-related news was overshadowed by the Medicare Part D debate. Many pundits, analysts, and bloggers have already commented on the Democrat’s legislative posturing, so I’ll refrain since I’ve already written about the issue previously on this blog. Check out Kaiser’s Daily Health Policy Report for a summary as of last Friday.


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