Government Agencies and Pharmaceutical Industry Must Take Action to Thwart Sales of Counterfeit Drug Products

September 1, 2006

With the lure of large profits, low arrest risk, and relatively light sentences, it is no wonder that criminals are trafficking in counterfeit pharmaceuticals.

With the lure of large profits, low arrest risk, and relatively light sentences, it is no wonder that criminals are trafficking in counterfeit pharmaceuticals. Counterfeit drugs are broadly defined and include packages that may contain smaller amounts of active ingredients, counterfeit labels affixed to real pharmaceutical vials ("uplabeling"), labels with fake expiration dates, or even vials with bacterial contaminants. Since 2000, federal investigations of counterfeit drugs have increased fivefold, with counterfeiters targeting high-volume, expensive, and parenterally administered drugs.

The Prescription Drug Marketing Act of 1988 (PDMA) first addressed the problem of counterfeit drugs. However, the statute has had little practical effect on protecting the pharmaceutical supply chain. A requirement that all pharmaceutical transactions be accompanied by pedigrees outlining the routing history of the product was included in the PDMA and codified as a Federal regulation in 1999, but a stay on implementing this regulation has been in effect since then. In June 2006, the FDA indicated that it will vacate this stay in December 2006.

Criminal activities may intersect with the pharmaceutical distribution system at numerous points because the system is so extensive and convoluted. Drugs are sold by manufacturers to one of three large national wholesalers (Cardinal, AmerisourceBergan, and McKesson), who sell them to regional wholesalers, who may sell them to a maze of secondary distributors (a so-called gray market), where counterfeiters have excellent opportunities to intercept the drug. At this point, counterfeiters can dilute, re-label, and repackage the drugs and then resell counterfeit products back to national wholesalers.

Reports and Investigations

The FDA reports that the annual number of investigations of suspected criminal pharmaceuticals has increased from 8 to 54 in the past 7 years. During that same time period, the FDA's MedWatch program received adverse event reports for only 45 patients who may have received counterfeit drugs. The largest number of reports (nine) concerned suspected counterfeit Epogen or Procrit (epoetin alfa). The MedWatch database included a small but increasing number of reports of loss of epoetin efficacy: 7 in 2000, 45 in 2001, and 139 in 2002 (when distribution of counterfeit Epogen and Procrit was at its peak).

Prompted by concerns over counterfeit Epogen and Procrit distribution in Florida, an investigative group called Operation Stone Cold was created in 2002 to coordinate the investigation of these counterfeit products.[1] Tipped off by an owner of a Miami pharmacy, Operation Stone Cold investigated a wholesaler selling boxes of Epogen at $100 less than the wholesale price. The boxes contained 2,000 U/mL vials instead of the advertised 40,000 U/mL vials.

Amgen and Johnson & Johnson, manufacturers of Epogen and Procrit, respectively, issued warning letters to health care professionals describing counterfeit "uplabeled" vials and included the suspected lot numbers for the counterfeit vials it had located, pictures of the counterfeit labels, and descriptions of how the counterfeit products' labeling and packaging differed from those of the real product (see Table).

After receiving numerous calls from pharmacies, hospitals, and patients who received uplabeled Epogen and Procrit vials, federal investigators confiscated 13,000 vials from wholesalers in Texas, Michigan, Illinois, and Florida. Unfortunately, 97,000 counterfeit vials were not recovered and most likely were distributed to patients.

Clinical Cases

Clinical findings for two patients treated with counterfeit Epogen and Procrit illustrate the difficulties in identifying individuals who receive counterfeit pharmaceuticals. The patients had life-threatening illnesses and were receiving numerous other medications, including chemotherapy in one case and antirejection medications following a liver transplant in the other.

The first patient, a 16-year-old male with cryptogenic cirrhosis, received a liver transplant in 2002 and afterwards developed anemia. He was prescribed 10,000 U/mL of Epogen per week, which was increased to 40,000 U/mL weekly using Epogen obtained from CVS Procare, a mail-order pharmacy. After each injection, the patient reported muscle spasms. Hemoglobin levels were about 8 g/dL, and fatigue persisted, despite weekly injection of what the patient believed was 40,000 U/mL of Epogen. Two months later, the patient's mother received notice from CVS that Amgen had released a warning letter describing counterfeit 40,000 U/mL vials of Epogen—the vials were uplabeled 2,000 U/mL vials.

In 2002, a 62-year-old woman with recurrent breast cancer received chemotherapy complicated by mild anemia. Initially, the anemia resolved with weekly 40,000 U/mL injections of Procrit. However, mild anemia that was unresponsive to Procrit and severe fatigue developed over an 8-week period. A nurse, having read a Dear Healthcare Professional Warning Letter from Johnson & Johnson describing counterfeit Procrit vials, noted that the suspect lot number and the lot number on the patient's Procrit vial were the same.

In 2003, both patients filed lawsuits against the local pharmacy, the wholesale and national distributors, and the manufacturers for continuing anemia, pain and suffering, and fear of pharmaceuticals. In 2006, financial settlements of undisclosed amounts were negotiated with the liver transplant recipient and the husband of the breast cancer patient, who had died in 2003 of her disease.

It should be noted that when cancer patients in Kansas City received vials of gemcitabine (Gemzar) and paclitaxel (Taxol) that had been diluted by their pharmacist, the patients and their families sued the manufacturers (Eli Lilly and Bristol-Myers Squibb) for failing to disclose the details of this counterfeit scheme to the public. The companies responded in court filings that they had no obligation to protect the patients from the criminal actions of a pharmacist. A financial settlement was also reached in these cases, reportedly for $72 million, avoiding a legal precedent that would hold pharmaceutical manufacturers liable for failing to disclose to the public downstream counterfeit activities.[2]

Policy Responses

A number of state, federal, and industry actions are aimed at preventing further counterfeit trade. In 2001, Florida's Bureau of Statewide Pharmaceutical Services informed wholesalers it would enforce an existing state law requiring complete pedigrees for all pharmaceutical products. The wholesaler's trade group argued that the enforcement of the law would increase cost and hinder efficiency. The state law did not become effective until 2003, when a grand jury report criticized the lax enforcement of pedigree laws and supported state requirements that wholesalers maintain pedigree papers, be subject to criminal background checks and fingerprint records, and post $100,000 security deposits.

Florida currently has the most stringent state licensing requirements of pharmaceutical wholesalers. Most other states continue to allow wholesalers to post small security deposits and do not conduct extensive background checks. Consequently, many wholesalers have moved from Florida to less regulated states.

At the federal level, the previously mentioned stay on the PDMA of 1988 will be lifted in December 2006, although only a small number of drugs will be included in the initial rollout of the pedigree requirement. FDA is hoping that this will encourage manufacturers to add radiofrequency identification detection (RFID) tags to pharmaceutical packages to facilitate tracking of accurate pedigrees of pharmaceutical products. RFID tags can store more information than bar codes and can be scanned in batches and from relatively long distances.[3]

Several pharmaceutical companies have begun implementing RFID tags. Pfizer has been tagging Viagra (sildenafil) made from its plant in France. Purdue Pharma has been tagging its painkiller Oxycontin (oxycodone), and GlaxoSmithKline has been tagging Trizivir (abcavir/lamivudine/zidovudine), an anti-AIDS drug.[4-6]

FDA will focus its initial enforcement efforts on drugs most susceptible to counterfeiting—those that are highly priced, in high demand, and have a previous history of counterfeiting. Examples include Lipitor (atorvastatin), Epogen and Procrit, Neupogen (G-CSF), Viagra, and Zyprexa (olanzapine). FDA has indicated that the fully enacted PDMA will be accompanied by criminal prosecutions of violators. The agency also added a category "suspected counterfeit drug use" to the MedWatch form to facilitate identification of counterfeit products.

Potential future improvements suggested by a Counterfeit Task Force convened by FDA include establishing a Product Safety Task Force, strengthening Federal penalties for trafficking in counterfeit pharmaceuticals, and advising states to adopt strict rules for licensing of wholesale distributors.

As counterfeit drugs continue to threaten patient safety, FDA should make patients and health care providers aware of the most commonly counterfeited drugs. Health care providers should report diminished efficacy and questionable shapes, taste, side effects, or labels, using the new MedWatch forms. FDA should also sample drugs susceptible to counterfeiting, as is done for imported drugs. States should apply strict licensing standards for wholesalers, including background checks and large security deposits. National distributors have recently discontinued purchasing pharmaceuticals from secondary markets and will sell only to large wholesale companies.

Combating the counterfeit drug problem requires assistance from government, policy makers, and the private sector. There cannot be a delay in responding to counterfeit drugs. Most importantly, unless there is active enforcement of the PDMA's pedigree requirements for all pharmaceuticals, patients will continue to suffer as the market for counterfeit drugs grows and difficulties in identification of these products persist.

The authors would like to thank the Pattis Family Foundation for its support of this research.


1. Eban K: Dangerous Doses: How Counterfeiters Are Contaminating America's Drug Supply. New York, Harcourt, Inc., 2005.

2. Margolies D: "Payments set for Courtney victims." Kansas City Star Section A, page 1, February 9, 2003.

3. Roark D, Miguel K: RFID: Bar coding's replacement? Nursing Management 37(2):28-31, 2006.

4. Pfizer: "Letter to Pharmacists Regarding Pfizer Shipping Viagra With RFID Technology in the Packaging." viagra_rfid.jsp (Accessed 6/15/06).

5. Purdue Pharma: "Purdue Pharma L.P. Implements Radio Frequency ID System for Drug Packaging to Deter Counterfeiting and Diversion." (Accessed 6/15/06).

6. GlaxoSmithKline: "GlaxoSmithKline begins testing new technology." (Accessed 6/15/06).

Mr. Mai was a research intern in Dr. Bennett's office at Northwestern University. Mr. Buffie is a project coordinator in Dr. Bennett's office. Dr. Bennett is professor of medicine, Division of

Hematology/Oncology, Northwestern University Feinberg School of Medicine; co-leader,

Cancer Control Program, Robert H. Lurie Comprehensive Cancer Center of Northwestern

University; and associate director, Midwest Center for Health Services & Policy Research, Jesse Brown VA Medical Center-Lakeside CBOC.