Our STAT Op-Ed: Drug Importation Can’t Coexist with U.S. Track-and-Trace Law

STAT recently published our op-ed: State drug importation laws undermine the process that keeps our supply chain safe.

I co-authored this op-ed with Dirk Rodgers, an independent consultant and author of the excellent RxTrace blog.

As we see it, there is no legal or operational way of transforming a drug packaged for a foreign market into a drug that meets the U.S. requirements of our in-progress track-and-trace system. What’s more, there is no way to alter the law to enable importation without undermining the law’s purpose and value.

States can't wish away the requirements of a significant federal law. Either we have a secure drug supply chain or we don’t.

Note that our op-ed was published before Canada announced that it would resist drug exportation.

Full text below. Read on and let us know what you think.

Drug Channels News Roundup: September 2013

Wow, Sunday was the first day of autumn. Time to buy a rake, gather up some acorns, make fantasy football trades, and read these acquisition-related news stories from the Drug Channels universe.

In this issue:

• Harvest Time—Express Scripts rescues Walgreens-backed Part D plan
• Chinese Acorns—Alliance Boots plans a major China pharmacy expansion
• Raking Up—Magellan buys PartnersRx

Plus, watch my latest TV interview, in which I discuss anti-counterfeiting technology and the folly of sketchy online pharmacies. Will Mainers listen?

Drug Channels News Roundup: July 2013

Ah, summer! Stay cool with these stories from the wonderful world of Drug Channels. In this issue:

• Top Dollar—Why Humira will be bigger than Lipitor
• Top Jobs—Pharmacists win again
• Top Sleazeball—No jail time for Avastin counterfeit wholesaler?!?

Plus, a cute, yet highly misleading, cartoon explaining healthcare reform. Top spin?

Drug Channels News Roundup: January 2013

Baltimore vs. San Francisco! Brother vs. Brother! Buffalo wings vs. Nachos! Yup, it’s time for a weekend of blow-out commercials, occasionally interrupted by a football game. Hope you’ve been training all season to gorge at the Super Bowl-party level. But before you indulge, check out this month’s notable news stories from around the Drug Channels universe.

• Trick play: Walmart will offer primary care…or not?
• Sacking the bad guys: How Pfizer pfights pfakes
• Ask Manti Te’o: Are generics really the same as brands?

Plus, the White House responds to a Death Star petition, while an anti-preferred pharmacy network petition flops.

The Seedy, Greedy Underbelly of U.S. Drug Channels

Happy new year! Let’s kick off 2013 with a look at newly-uncovered unethical behavior by physicians and pharmacists.

In late December, the FDA sent warning letters to 350 (yes, 3-5-0) physician practices that knowingly purchased gray market Botox, which turned out to be counterfeit. The next day, the LA Times profiled two independent pharmacy owners that profited on the prescription opioid abuse.

Taken together, these stories illustrate why manufacturers need to keep a close eye on channels to the patient. Greed is not always good. Too bad that these providers didn't know which shoulder to follow.

Drug Channels News Roundup: October 2012

It’s time for my Halloween roundup of spooky Drug Channels news. Here are today’s terrifying stories:

• Dawn of the DEA: The never-ending battle against wholesalers
• No Fangs: Pharmacy lawsuit against preferred Part D networks is dismissed
• Stake through the Heart: People trust the Internet more than pharmacists
• Frankenbill: New potential legislation on distribution security

Plus, a funny video trick-or-treating lesson … for pharmaceutical sales reps!

Drug Channels News Roundup: June 2012

Summer is just around the corner. Time to clean the barbecue, buy a new bathing suit, and pack the kids for camp. In the meantime, enjoy my latest selection of noteworthy news stories from the Drug Channels universe.

In this issue:

• Rethinking health care jobs—More is not better?
• Trust No One—The FDA’s useful primer on supply chain vulnerabilities
• Pharmacist T-1000—Meet your new robot overlords

Plus, Paula Deen sponsors an important .05k walk for diabetes research. You go, girl!

Drug Channels News Roundup: May 2012

It’s May! The trees are blooming, the sun is shining, and the birds are singing. But you’d rather stay inside and enjoy my monthly look at noteworthy news stories from the Drug Channels universe, right?

News stories...Assemble!

• A new benefit design for Stark Industries? Humana and Walmart launch a preferred pharmacy network for the commercial market.

• Loki would be proud. The FDA reminds 108 physician practices not to buy from dubious sources. Really?!?

• Hulk Smash Buy-and-Bill! UnitedHealth’s Lee Newcomer makes the case against current reimbursement models. Just don't make Dr. Newcomer angry. You wouldn't like him when he's angry.

Plus, The Onion reports on Walgreen's unusual new social media tool. I wonder if it's the same technology used by the Strategic Homeland Intervention, Enforcement and Logistics Division?

Drug Channels News Roundup: February 2012

Time for my monthly look at noteworthy news stories from hither and yonder throughout the Drug Channels universe. I hope these articles keep you busy during your extra leap day tomorrow.

In this issue:

• More Dirty Docs—A new diversion cancer drug story
• AARP vs. PBMs—A new target?
• Specialty Pharmacy—A worthwhile roundtable discussion

Plus, the British Medical Journal publishes a peer-reviewed scientific research paper that analyzes "whether the acute consumption of cannabis (cannabinoids) by drivers increases the risk of a motor vehicle collision." Can you guess the shocking answer?

To Limit Counterfeits, Build a Solid Channel Strategy

Over the past week, I've looked critically at the counterfeit Avastin situation. See Greedy Physicians Invite Fake Avastin Into the Supply Chain and What's Behind Counterfeit Drug Demand.

Today, I take a more normative approach by describing elements of commercial channel strategy that support product security and reduce the risk of counterfeit infiltration. In my experience, a good channel strategy complements such traditional anti-counterfeiting tools as package design, security features, pedigree, track-and-trace, and aggressively prosecuting the bad guys.

Below, I discuss the rationale for limited networks for specialty drugs and provide 6 channel strategy guidelines that manufacturers can use to improve product security. Please add your own suggestions below.

What's Behind Counterfeit Drug Demand

The trail of counterfeit Avastin is becoming clearer, with Egypt emerging as the likely origin point. See Fake Avastin's path to U.S. traced to Egypt.

Unfortunately, the latest information supports my contention about the economics behind the counterfeit purchases. The fake product entered the U.S. supply chain through good ol' fashioned, financially-motivated diversion. I stand by my initial observation: Greedy Physicians Invite Fake Avastin Into the Supply Chain.

Today, we'll take a deeper look at what went wrong. Tomorrow, I'll explain how a manufacturer's commercial channel strategy can support product security and reduce the risk of counterfeit infiltration.

Greedy Physicians Invite Fake Avastin Into the Supply Chain

Here’s some very scary news. Counterfeit versions of Genentech’s Avastin (bevacizumab) were discovered at 19 physician practices. See the FDA’s notice and Roche’s official statement.

The real crime? This situation was completely avoidable.

From what we know so far, these 19 medical practices knowingly purchased the fake product from a non-authorized distributor. By looking for a "good deal" outside of the legitimate channel, the physicians in charge of these practices were foolish, irresponsible, and unethical. Patiens caveo. (Patients Beware.)

Read on and see if you agree.

Congress Asks Where Gray Market Drugs Come From

Rep. Elijah E. Cummings of Maryland, the ranking Democrat on the House Oversight and Government Reform Committee, just launched an investigation into the gray market with a “document request” to five distributors regarding five drugs. See Cummings Investigates “Drug Speculation” and “Gray Market” Sales of Drugs in Critically Short Supply, complete with anonymous Tip Line.

In Drug Shortages and Gray Market Profiteering, I wondered: “How do these mysterious vendors get access to drugs in short supply?” This led to some very entertaining back-and-forth in the comments below my article with (anonymous) secondary distributors. I hope Rep. Cummings learns something more useful from his official inquiries.

The Counterfeit Counterfeit Drug Count (rerun)

I’m taking a break from blogging this week and rerunning some of my favorite posts from 2010. Click here to see the original post and comments from September 2010.

Have you ever wondered about the statement that "10% of all drugs worldwide are counterfeit"?

The 10% figure has been cited by the World Health Organization (WHO), which has become the de facto source for the statistic. Just about every technology vendor involved in pharmaceutical supply chain security still touts the 10% figure as often as possible.

Alas, it turns out that the 10% figure has no factual basis in reality. Carl Bialik, the Wall Street Journal's Numbers Guy, published a fantastic piece of journalism this weekend entitled Counterfeit Drug Count Is Tough to Swallow. You should also read Dubious Origins for Drugs, and Stats About Them from The Number Guy's blog for some additional background.

The lesson? Always check the references. And don't believe everything you hear from technology vendors.

Drug Shortages and Gray Market Profiteering

Premier Healthcare Alliance just released Buyer beware: Drug shortages and the gray market, a fascinating but disheartening report on the secondary market for drugs facing shortage.

The report gathers innovative data about the financial underbelly of the gray market. The results aren’t pretty, with mark-ups on key generic oncology and critical care drugs averaging 650%.

It’s really depressing to see the illegitimate secondary market thriving. Someone out there must be buying drugs with questionable heritages and sky-high price tags. Otherwise, the gray market would vanish.

Fans of irony will appreciate the FDA’s July 14 decision to back away from full pedigree information due in part to a lawsuit by secondary wholesalers. Really?!?

Read on for some reflections on this crisis.

Drug Channels News Roundup: August 2011

Here is my monthly look at noteworthy news stories for your reading pleasure. Perfect for a lazy afternoon in August! In this issue:

• The PBM Roll-Up Begins: SXCI makes a move

• After Heparin: A worthwhile study on the pharmaceutical supply chain

• Et Tu, NACDS? A surprising attack on PBMs

Plus, The Onion asks some average Americans for their thoughts on the upcoming generic pipeline.

Drug Theft + Diversion Gets Bigger :(

Drug distribution muckraker Katherine Eban, author of Dangerous Doses, is back with another must-read piece of investigative journalism in Fortune magazine: Drug Theft Goes Big.

The article highlights the increasingly-sophisticated criminal gangs who are targeting pharmaceutical products. Ms. Eban also tells the fascinating and scary story of how stolen Novo Norvisk products were dispensed by Kroger (NYSE:KR), which allegedly bought product with a forged pedigree from a secondary wholesaler. Yikes!

Alas, Ms. Eban falls short when it comes to solutions, falling into the standard journalist’s trope of blaming manufacturers for not tagging more products. A noble sentiment, but e-pedigree and track-and-trace technologies only work if pharmacy buyers agree to authenticate (scan) an electronic tag. Note that chain pharmacies still officially oppose national track-and-trace legislation—as recently as March 17, 2011!

As you can imagine, "Don't ask, don't tell" is the mantra of people who buy diverted products from unsavory secondary resellers. If the price is too good to be true, then pharmacy buyer beware.

Read on for more details.

The Fight Against Counterfeit Drugs (video)

Last night, 60 minutes ran a 13 minute story called "The Fight Against Counterfeit Drugs," narrated by America's favorite medi-journalist Dr. Sanjay Gupta. The video is embedded below.

The story is reasonably well told, with examples of counterfeit drugs from Pfizer, Lilly, and others. Dr. Gupta cites the fact that an estimated 36 million people from the U.S. have purchased medicines from "rogue" online pharmacies, many of which claim (falsely) to be from Canada. As one U.S. customs officer says, fake drugs are "a big threat and an exploding threat."

The last third of the story gets a bit muddled because it intermingles the dangers of knock-offs with the risks of contamination in the legitimate supply chain. As a result, offshore production looks more dangerous than it really is.

Nevertheless, the video is worth watching. Check it out below and let me know what you think.

Importation is back? Really?!?

Yes, you read the headline correctly. U.S. Senator Olympia Snowe (R-ME) has just re-re-re-re-re-introduced the misnamed Pharmaceutical Market Access and Drug Safety Act (S.319). It has 18 co-sponsors.

There must be some bizarre advanced political calculus behind this move, because it makes no logical economic or public safety sense. A weak dollar and a high generic dispensing rate imply that even the theoretical financial benefits are minuscule, so the diversion dangers from this bill would never justify the risk. The chart below tells the story.

I don’t see this legislation moving forward, but then again, drug importation has been declared dead more times than an orange parka clad Kenny McCormick. So here’s a brief review of the economic and safety issues. You can also revisit previous Drug Channels articles tagged with Importation.

Is Track-and-Trace a priority for the FDA?

The U.S. Food and Drug Administration (FDA) recently released its draft Strategic Priorities for 2011-2015. I recommend that you read the document for a useful glimpse into the FDA’s perspectives and the breadth of its responsibilities. You can also submit a public comment at www.regulations.gov.

But there’s a notable omission from these priorities. I searched and searched through the document, but was unable to find any mention of perennial supply-chain security topics such as pedigree, track-and-trace, RFID, or serialization.

True, there is a section called "Strengthen the Safety and Integrity of the Global Supply Chain", but it deals primarily with globalization and imports.

Some Drug Channels readers may be attending the Healthcare Distribution Management Association’s (HDMA) Track-and-Trace Technology Seminar next week. If so, please ask Ilisa Bernstein, who has been on the forefront of the FDA’s efforts on supply chain security over the years, about this unexpected omission.