Drug makers fight back against counterfeiters

Feb. 3, 2004
Drug makers fight back against counterfeiters Facing heightened public concern about the growing number of counterfeit drugs entering the U.S. supply

Drug makers fight back against counterfeiters

Facing heightened public concern about the growing number of counterfeit drugs entering the U.S. supply chain (see cover story, January 2004 LT), a number of prominent pharmaceutical manufacturers have unleashed their own offensive measures designed to protect their products and the patients that use them.

Recent actions by a handful of manufacturers — including Johnson & Johnson, Pfizer Inc., Eli Lilly & Co. and GlaxoSmithKline Plc — preempted the release of long-awaited federal guidelines by the U.S. Food and Drug Administration (www.fda.gov) and snatched headlines away from distributors and wholesaler organizations that have been campaigning heavily for industry-wide solutions. Those solutions include stricter internal purchasing practices, tighter controls over product through better tracking, improved scrutiny of business partners and the adoption and implementing of rather expensive technologies, which many view as the long-term and ultimate goal.

First out of the gate with a broadly sweeping initiative was Johnson & Johnson (www.jnj.com), which had its selected distributors sign a contract that prevents them from buying the company's drugs and medical devices from any source other than J&J. It also grants J&J investigators the right to perform random audits and warehouse inspections in order to root out unauthorized purchases. Those that don't adhere to the policy stop receiving shipments. The company also sent letters to hospitals and other healthcare providers instructing them to buy only from authorized sellers of J&J products.

Within a week, Pfizer (www.pfizer.com) notified its distributors that they must purchase the company's drugs only from Pfizer or from a list of authorized resellers and sell them only to pharmacies, hospitals, physicians or other properly licensed and company- authorized distributors. Like J&J, Pfizer says it won't work with non-compliant companies.

Eli Lilly (www.elililly.com) implemented similar restrictions and went so far as to terminate distribution agreements with five drug wholesalers that were not following the new policy. In fact, Lilly notes that it found some counterfeit drugs among the lots, further justifying its decision.

These companies are trying to prevent their distributors from turning to the so-called “secondary” market to buy drugs to quickly fill spot inventory shortages or glean significant price breaks. Many of the counterfeit drugs reported to authorities were traced to these loosely regulated secondary supplier outlets.

Critics contend that these efforts aren't designed to just combat counterfeit drugs and ensure product safety. Instead, they say manufacturers really are trying to prevent consumers from gaining access to a surplus of less expensive drugs reimported from Canada, effectively limiting supply rather than addressing burgeoning price increases fueled by increased domestic demand.

But drugs aren't the only medical product category infected with counterfeit threats. The FDA has warned healthcare providers of a counterfeit synthetic mesh implant typically used in hernia- repair surgeries. Johnson & Johnson's Ethicon Inc. unit makes the authentic polypropylene product. LT

More details are on our website www.logisticstoday.com: click “Industry Verticals: Healthcare/Pharmaceuticals.

February, 2004

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