Prediction Nine of our 2013 Predictions for Global Supply Chains (research report available for free download within our Research Center) noted that higher and more expensive incidents of counterfeit products within and across supply chains will finally motivate industry to step-up mitigation efforts.

Last year, one of the more visible aspects of this problem were incidents of counterfeit versions of the cancer life-saving drug Avastin making their way across global supply chains. In a July 2012 commentary, Supply Chain Matters highlighted The Wall Street Journal’s investigative report that traced how fake versions of Avastin were procured and distributed through a network of international distributors. The global distribution scheme opened the door to sourcing of the drug from countries where regulatory controls are not as strict, and where introduction of fake medicines into the supply chain are more easily accomplished.

On Wednesday of this week, The Wall Street Journal once again reported that the U.S. Food and Drug Administration (FDA) had to once again alert physicians and healthcare providers to yet another counterfeit batch of Avastin. This latest warning involves distributor Pharmalogical, which also does business as Medical Device King and Taranis Medical, which shipped two batches of Altuzan, the Turkish branded version of Avastin, to U.S. based healthcare providers. It was reported that at least one batch contained no active ingredient.  According to the WSJ, the FDA was unable to identify which doctors purchased this batch of medicine. The article also makes note that U.S. law-enforcement agencies and drug manufacturers are aggressively pursuing drug distributors that sell unapproved foreign drugs, and that two new guilty pleas have come forward in recent weeks.  One was the case of a San Diego based oncologist who pleaded guilty to buying an unapproved foreign version of the cancer drug Rituxan from an overseas distributor, and then bill Medicare for the full price of the drug. In another case, a Florida based distributor pleaded guilty to conspiracy and mail fraud in the importation of $7 million worth of the cancer drugs Taxotere and Eloxatin.

In 2012, we called for all members of pharmaceutical and drug supply chains, industry regulators to bring serious attention on processes related to the sourcing, supplier monitoring and product authenticity of drug supplies. We neglected to specifically mention unscrupulous distributors’ healthcare providers who are pursuing business self-interests over the safety of patients.

The good news is that some progress is being made.  In 2012, U.S. enforcement efforts directed at suspected illegal drug trafficking involving prescription drug abuse, ensnarled supply chain players such as major distributor Cardinal Health, drug retailers CVS and Walgreens.  In the remaining months of 2013 we hope to be featuring more commentaries noting progress in these areas.

Bob Ferrari