Download Counterfeit Drugs and the Safety of America`s Drug Supply Chain

Counterfeit Drugs and the Safety of America’s
Rx Drug Supply Chain
November 2007
Chris Ward
Components of U.S. Total Health Care Spending
2007 (Projected)
Prescription Drugs Account for Only 10 cents of every dollar spent on health care
Admin & Net
Cost of
Insurance
7%
Other
Healthcare
Spending
18%
Hospitals &
Nursing Homes
37%
Rx Drugs
10%
Physician &
Clinical Services
21%
Dental & Other
Health
Porfessionals
7%
* 2007 projected
Source: Center for Medicare and Medicaid Services : http://www.cms.hhs.gov/NationalHealthExpendData
Components of U.S. Personal Health Care Spending
Growth 2002 to 2007*
% of total personal health spndg growth '02 to'07
Increased Spending on Institutional Care and Physician Services is 5 times greater
the growth in Spending on Rx drugs
44%
* 2007 projected
25%
19%
12%
Hospitals &
Nursing Homes
Physician &
Clinical
Services
Other Personal
Healthcare
Rx Drugs
Source: Center for Medicare and Medicaid Services : http://www.cms.hhs.gov/NationalHealthExpendData
Drug Safety Matters
US citizens buying product on the internet, in fact, cannot be certain where
the product is coming from, if it is real, safe and effective or who and where
the drug was manufactured.
Late last year, 57-year-old Marcia Bergeron ordered a package of what
she thought was a generic form of a popular sleeping pill from an online
pharmacy. A few days after Christmas, she died from a heart arrhythmia in
her British Columbia home.
Her liver was contaminated with fatal doses of metals such as aluminum
and arsenic. Last month, the local coroner's office pronounced Bergeron a
casualty of counterfeit drugs purchased from the Web.
Forbes.com August 20, 2007
U.S. Consumers Can Not be Certain of the
Origins of Imported Drugs
As the value of the U.S. dollar has dropped relative to other countries
The price differential between American and foreign drugs has
dropped dramatically. Consequently fewer drugs entering the U.S. are
likely to be sourced from Canada or other developed countries.
Purchasing drugs by mail order has become LESS safe since supply
chains have become more stringently controlled.
There is also a growing recognition and acknowledgement that
organized crime is actively engaged in drug importation.
Importation & Counterfeit Drugs
• Puts patients at risk because U.S. citizens buying
drugs on the internet cannot be sure where the drug
are coming from and by whom it was manufactured
and if it is real, safe and effective
• Puts consumers at risk by evading supply chain
safeguards
• Requires Americans to waive their rights to
protection of U.S. law
Most foreign drug Ingredient manufacturers that export
to the U.S. have never been inspected by the FDA
China
Inspections (2007)
Inspections (2002-2007)
Total # of Establishments
13
88
714
65
India
200
410
All other
countries
217
1157
2125
Number of Establishments
Percentage of Un-inspected, Registered Foreign
Establishments Manufacturing Drugs for the U.S. Market
87.68%
China
India
51.22%
All other
countries
45.55%
0
20
40
60
80
100
GAO Subcommittee Testimony and Report: DRUG SAFETY - Preliminary Findings Suggest Weaknesses
in FDA’s Program for Inspecting Foreign Drug Manufacturers (November 1, 2007)
Importing Drugs : A Simplistic
Approaches to Complex Issues of Safety
As for FDA concerns that importation for personal
us is unsafe, Gov. Pawlenty of Minnesota said:
"Show me the dead Canadians.
Where are the dead Canadians?"
The reality is that, every day, all over the world, including
Canada, people are harmed by counterfeit or sub
standard medicines. Because of mail order importation
Canada has become an attractive portal for foreign drugs
to enter the U.S. market.
Although Most Internet Pharmacies in Canada sell Only to Americans,
Counterfeit Drugs Can Enter The Regular Supply Chain in Canada
Importation Makes Attractive Portal to the U.S. Market
for Foreign Drugs
Canadian Pharmaceutical Imports from Selected
Countries 2002 to 2006
108% Increase
China
Singapore
Taiwan
$26.2
$0.9
$37.2
$29.7
$0.4
$9.7
165% Increase
$48.5
$18.3
India
Argentina
$80.1
$38.4
42% Increase
8082% Increase
1099% Increase
$ millions
Industry Canada, Trade Data Online, www.strategis.ic.gc.ca,
accessed Apr18, 2007
2002
2006
Promoters of Drug importation Have made America
a Haven for Drugs from Developing Countries
Companies based in India were bit players in the American drug market
10 years ago, selling just eight generic drugs here. Today, almost 350
varieties and strengths of antidepressants, heart medicines, antibiotics
and other drugs purchased by American consumers are made by Indian
manufacturers.
Five years ago, Chinese drug-makers exported about $300 million worth
of products to the United States. Eager to meet Americans' demand for
lower-cost medicines, they, too, have expanded rapidly. Last year, they
sold more than $675 million in pharmaceutical ingredients and products in
the U.S. market.
THE WASHINGTON POST
JUNE 17, 2007
Americans' Confidence in Drugs Manufactured
in Developing Countries
Not Sure
7%
Not
Very/Not at
All
Confident
63%
Harris Online
Very/Some
what
Confident
30%
Growing Awareness among American
Consumers of the Dangers of Importation
Few people have participated in heavily promoted, politically driven
State sponsored or promoted importation schemes like I-Save-Rx
Minnesota’s importation plan was supposed to serve 700,000 consumers.
In 2005, only 10,054 prescriptions had been filled.
Over 2 years only 3,689 consumers used the Illinois importation program.
In Wisconsin only 321 used the program, In Vermont there were 217.
Undermining the Regulatory Protection of
Consumers
Importation schemes are politically driven efforts to circumvent
laws designed to protect patients and consumers.
This includes:
•
ignoring the regulation of the professional conduct of
physicians and pharmacists in prescribing and dispensing
medicines, and
•
circumventing American and Canadian laws that guarantee
the safety of the drug supply.
•
mail order importation usually involves the use of foreign
products that do not meet the requirements for FDA
approval.
Safeguards that Ensure the Safety & Efficacy of
the Drug Supply Chain
• Establishment licenses for legal importers
• Record retention and recall mechanisms
• Mutual recognition agreements for
pharmaceutical GMP requirements
• Packaging and labeling requirements.
• The submission review process for individual
products
Health Canada Warns Consumers of the Dangers of
Evading Drug Supply Chain Regulation
Importation of Human Use Drugs for Personal Use
Enforcement Directive
The personal use exemption unfortunately provides an opportunity for
these suppliers to conduct commercial activities, and to evade the
submission review process for individual products, and/or the
Establishment Licence requirements for importers, by supplying their drug
products primarily through the mail to individual Canadians. These
activities at times may include violative marketing and advertising activities
by means such as the Internet. This has ramifications related to safety
because large quantities of products, which have not been reviewed for
safety and/or efficacy, and which are of unknown quality, can enter the
country and be distributed. The lack of an importer also means no person is
responsible for meeting GMP requirements such as appropriate record
retention or recall mechanisms.
Drugs Exported to U.S. May Not be Subject to
Regulatory Oversight
37. (1) This Act does not apply to any packaged food, drug, cosmetic
or device, not manufactured for consumption in Canada and not sold
for consumption in Canada, if the package is marked in distinct
overprinting with the word "Export" or "Exportation" and a certificate
that the package and its contents do not contravene any known
requirement of the law of the country to which it is or is about to be
consigned has been issued in respect of the package and its
contents in prescribed form and manner.
Canada’s Food &Drug Act
“In documents filed in Federal Court late last month, CanadaRX
Corp. has asked a judge to prevent Health Canada inspectors from
visiting its facility, calling the proposed inspection "invalid and
unlawful" and a violation of the company's charter rights.”
Michelle MacAffee, Canadian Press, March 3, 2004
Importation & Liability
Mail order importers require patients to waive their rights of protection
under US law before filling a prescription.
Before a prescription can be filled in Canada it must be signed by a
Canadian doctor. Canadian doctors have been told by the agency that
insures them that they have no liability coverage for prescriptions they
write for US patients receiving imported drugs.
Additionally Canadian pharmacists have no requirement or obligation to
carry liability insurance
Americans Waive Rights to Consumer
Protection under U.S. Law
Americans are required by drug importers to sign a waiver
relinquishing protection under U.S. law.
THE UNDERSIGNED, BEING OVER THE AGE OF 21, HEREBY:
Agrees that any dispute that arises between him/her and Discount
Canada Drugs, and the Canadian Pharmacy its affiliates, related
companies, subsidiaries, parent company, officers, directors,
employees or agents shall be governed by the laws of the
Province of Manitoba and the laws of Canada applicable to
contracts formed in Manitoba and the undersigned agrees that
the Courts of the Province of Manitoba shall have sole and
exclusive jurisdiction over any such dispute.
Lower Value of Increase the Prices of
Legitimate Imports
U.S. $1 Conversion to Canadian Selected Yrs
2000
2001
2002
2003
2004
2005
2006
2007
$1.49 Cdn.
$1.57 Cdn.
$1.59 Cdn.
$1.35 Cdn.
$1.35 Cdn.
$1.17 Cdn.
$1.12 Cdn.
$0.95 Cdn.
Source: Bank of Canada, ww.bankofcanada.ca/en/rates/exchform.html
Internet Drug Sales from Canada have Dropped
80% Over the last 3 Years
Annual Drug Sales from Canada ($millions)
U.S. Internet Drug Sales from Canada
$595
$425
$112
2004
2005
2006