This commentary is a continuing update to our ongoing Supply Chain Matters series related to the rather troubling trend of counterfeit life-saving drugs entering U.S. and global based supply chains. Our commentary update in late-February noted the disturbing trend in global based chain of custody adding more points of vulnerability to potentially fake drugs. The supply chain gaining the most visibility has been that of the cancer drug Avastin, where fake versions of this life-saving cancer drug began showing up in U.S. supply chains late last year.

Last Friday, The Wall Street Journal published a rather comprehensive but disturbing special report: How Fake Cancer Drugs Entered the U.S. (paid subscription or free metered view). This article provides a sobering perspective of how the crackdown of pharmaceutical and life sciences companies on a particular Canadian based drug wholesaler led to a cascading series of events leading to increased sourcing of drugs, outside the controls of U.S. regulatory agencies and the increased likelihood of counterfeit drugs entering the supply chain.  In our view, this WSJ article needs to be mandatory reading for those residing in pharmaceutical supply chains, healthcare organizations securing these drugs and legislators who oversee industry controls. We urge the WSJ to make this article more visible since the events portrayed provide ample evidence of the dysfunctional nature of the cascading events that a highly regulated supply chain can incur when the participants focus on self-interests.

It portrays how online distributor Canada Drugs became a vital link to U.S. consumer needs for more affordable drugs, and to be subsequently targeted as a powerful enemy by large drug companies for cutoff in supplies in 2003. That led to a series of interlocking initiatives where Canada Drugs initiated a web of international subsidiaries to secure needed supply from other internationally based sources. In the specific case of Avastin distribution, the WSJ reports that the maze of subsidiaries included Clinical Care, Bridgewater Medical, Montana Healthcare Solutions, River East Supplies Ltd., Quality Specialty Products and Volunteer Distribution. These subsidiaries opened the door to sourcing of suspect drugs from cheaper countries, such as Turkey, where regulatory controls are not as strict.  Drugs were purchased in bulk from foreign souces and then re-packaged for U.S. customers, which is a break in the chain of traceability. Buyers assumed valid wholesaler licenses from U.S. state regulators.

In our February commentary we called for increasing the timetables for “track and trace” processes and that consideration should be made for global supply chain distribution channels. We called for all members of pharmaceutical and drug supply chains, industry, regulators, and buying groups to bring serious attention and resources to bear on processes related to sourcing, supplier monitoring and product authenticity. After reading last week’s WSJ report, we wonder aloud whether certain drug manufacturers and distributors are more concerned about individual business interests rather than the safety of drug supplies

Bob Ferrari