Industry and regulators enjoyed a
very brief collective sigh of relief near the end of 2013 with the passage of
the Drug Quality and Security Act (DQSA h.r. 3204). Throughout 2014 we can
expect to see renewed activity as supply chain stakeholders re-engage to move
to federal compliance with the preemption of state pedigree laws, namely
California. Expect a flurry of activity as 2014 closes with the first milestone
of the DQSA Transaction History taking effect January 2015.
What will this mean for patient safety?
No doubt over time we should
expect supply chain security to improve and patient safety will experience
positive effects. Regulations like the EU FMD, US DQSA, China eCoding and
Turkish ITS will prove most effective at detecting and mitigating systemic
counterfeit supply chain breaches. Unfortunately there is a diversity of
fraudulent activity with pharmaceuticals and no ceiling on agility and
innovation employed by the counterfeiters.
Concerns
One trend that I believe is
growing based on personal experience is the small yet immensely profitable
practice of Instance Counterfeits. I use instance to refer to the occasional or
extremely low volume falsified product, in this case medicine. Counterfeiters and
rogue parallel traders have learned that exploiting therapeutic areas, other than
the more common erectile dysfunction therapies, is highly profitable even with
very little market penetration. That is, they are focusing on very small
volumes of moderate to high priced medications.
Why?
Opportunity coupled with
attractive profitability. Some oncology medications can cost several thousand
dollars for a 30 day supply. Due to low volumes and difficult forecasting specialty
drugs might also not be on hand for immediate dispensing due to the high
carrying cost for pharmacies and distributors, in effect creating an artificial
scarcity. A counterfeiter can fabricate a convincing looking package and drug
for a few dollars. Some counterfeiters even re-use legitimate packaging making
their profitability even better and the fake that much more convincing. Buying
medications from questionable sources because of the price is dangerous for
those of us familiar with the risks. Unfortunately there is a real demand[i].
Brand owners should consider these instance events as more than a nuisance.
Additional Concern
Proposed US Federal Legislation
such as The Personal Drug Importation Fairness Act (h.r.
3715) will be a boon for counterfeiters looking for growth. This act would
permit them to move their falsified products into the lucrative US market
virtually unchecked.
Result & Recommendation
How likely then is this type of
consumer to be saved from a counterfeit by Rx Product Serialization and
enhanced traceability? Not likely in my opinion as evidenced by recent
counterfeit cases such as the Avastin case in the US and the Sunitinib recalls
for Germany and Romania in 2013[ii].
Both are good cases of opportunity and a network of legitimate and
semi-legitimate suppliers willing to assume risk and pass it along to patients
in the interest of profit. Serialization would not have prevented these
instances. Thus, serialization is not a silver bullet solution to the problem
of counterfeits in the legitimate supply chain.
Should h.r. 3715 pass, brand
owners would be wise to implement technologies and supply chain security
programs targeted at protecting unsuspecting patients. It may be time to
seriously consider putting product authentication capabilities directly into
the hands of US patients, in particular for small volume – high priced specialty
medications. This is an aspect of brand protection and anti-counterfeiting most
US pharmaceutical brand owners have been unwilling to consider for fear of
alarming the patients and potentially loosing share.
Faced
with the fact that agile and innovative counterfeiters will continue to exploit
supply chain weaknesses in this manner, the industry and regulators need to
manage expectations of the patient population. Furthermore, the need for brand
owners to employ anti-counterfeiting and brand protection technologies still
remains even in a serialized pharmaceutical world.
