Tag Archives: illegitimate pharmaceutical supply chain

The Partnership For Safe Medicines Interchange 2014

PSM Interchange 2014The 2014 Partnership for Safe Medicines (PSM) Interchange event was held on September 18 in Washington DC.  This was the fifth year of the event and every year it gets better.  That’s why RxTrace has been a media sponsor of the event for the last four years.  This year, I found every speaker to be compelling.  Next year I am elevating this event to my “highly recommended” short list.

Attendance at the event has grown each year and this time they reached the capacity of the venue and were forced to cut off registrations some time before the day of the event.  A number of RxTrace readers were present at the this year’s event but more ought to attend going forward.

The PSM interchange is a different kind of event.  It’s not a “how to” event.  Over the years, the speaker lineup has included State and Federal pharma regulators, criminal justice professionals (investigators and prosecutors), academics, politicians, pharmaceutical industry associations, medical professionals and occasionally, victims of counterfeit drugs.  The audience includes all of the above, plus Continue reading The Partnership For Safe Medicines Interchange 2014

Some People Actually WANT To Buy Counterfeit Drugs

It’s hard to imagine why people would actually prefer to buy drugs from internet websites that are obviously not licensed legitimate pharmacies.  That is, those that do not require proof of a valid prescription from a legitimate prescriber, and/or do not carry an online pharmacy certification (especially from the National Association of Boards of Pharmacy, NAPB, VIIPS program).  In an earlier essay I said this about people who would buy drugs from these illegitimate sources:

“Most of the criminal activity has moved out of the legitimate supply chain, mostly onto the internet.  You know, the internet, where criminals can sell drugs directly to the few consumers who are dumb enough to think that someone will sell them legitimate prescription drugs, but do so illegally by not requiring a prescription.  That is, they think that some faceless company would be willing to knowingly break one law, but could then be trusted to provide real pharmaceuticals at below market prices.  In the age of the internet, how do you protect people who are that gullible?”

A few weeks after writing that rather disparaging passage I met one of those gullible people Continue reading Some People Actually WANT To Buy Counterfeit Drugs

What If RxTEC Isn’t Adopted?

I did not participate in the development of the Pharmaceutical Traceability Enhancement Code (RxTEC), a proposed Congressional bill that was created by the industry lobbying group known as the Pharmaceutical Distribution Security Alliance (PDSA).  In fact, while I was aware that a group had been formed last year I wasn’t aware that they were working on drafting an actual proposed bill until their discussion draft (dated February 27, 2012) appeared on the internet about 10 days ago.  I first saw it on Ed Silverman’s Pharmalot blog.

I also saw a presentation by one of the members of the PDSA last week that touched on the RxTEC proposal.  It was characterized as a “stepping-stone” to full traceability in the U.S. supply chain someday down the road.  In other words, the PDSA apparently means that their RxTEC proposal isn’t the final destination but it is only the first step toward that ideal.  At least, that’s how I interpreted that “stepping-stone” comment.


Now this is a concept that is familiar to me.  In fact, as an idea stripped of all of the RxTEC-specific details, it is identical to the idea beneath the approach I proposed in a pair of RxTrace essays last May and June called “Plateaus of Pharma Supply Chain Security” and “SNI’s Are Not Enough In a Plateau-Based Supply Chain Security Approach”.

This single underlying idea originates, on both accounts, from the fact that the amount of illegitimate activities within the U.S. supply chain is really quite small compared with the rest of the world (see my essay, “Illegitimate Drugs In The U.S. Supply Chain: Needle In A Haystack”), and to reduce it further will take Continue reading What If RxTEC Isn’t Adopted?

Illegitimate Drugs In The U.S. Supply Chain: Needle In A Haystack

West-African countries have been under attack by drug counterfeiting criminals for decades with little resistance until the last one.  The result, in 2002 Mohammed Yaro Budah, then president of the Pharmaceutical Society of Nigeria, estimated that 70% of the drugs in Nigeria were fake or substandard.  That’s an incredible figure, but starting around that time the Nigerian National Agency for Food and Drug Administration and Control (NAFDAC) under the direction of Professor Dora Akunyili began fighting back.

Initially they focused on inspecting drug imports at the Nigerian ports and airports and they were able to bring the percentage of fake or substandard drugs to come down considerably.  More recently they have begun employing a number of Raman Spectroscopy-based devices called TruScan (recently acquired by Thermo Scientific) to inspect drugs and anti-viral medicines being sold in pharmacies during “unscheduled” visits.

Even more recently, a number of pharma manufacturers have begun to add low cost scratch-off stickers to the drugs sold in Nigeria that cover a random number that can be scratched off and checked for authenticity by patients and healthcare professionals using SMS text message-based technology from Sproxil.  The service was launched in 2010 on a single product but that number is growing quickly as a number of large U.S.-based drug companies add the scratch-off stickers to their productsThe service is sponsored by NAFDAC.


That is, would these technologies help to reduce the number of illegitimate drugs in the U.S. supply chain? I believe that the answer is Continue reading Illegitimate Drugs In The U.S. Supply Chain: Needle In A Haystack

Do We Even Need To Mandate Drug Pedigrees Anymore?

  Important Notice To Readers of This Essay On November 27, 2013, President Barack Obama signed the Drug Quality and Security Act of 2013 into law. That act has many provisions, but one is to pre-empt all existing and future state serialization and pedigree laws like those that previously existed in California and Florida. Some or all of the information contained in this essay is about some aspect of one or more of those state laws and so that information is now obsolete. It is left here only for historical purposes for those wishing to understand those old laws and the industry’s response to them.


Drawing by Zsuzsanna Kilian



Currently well over half of the U.S. states have a drug pedigree law of some kind either on the books, in the process of being enacted or proposed in their legislature.  No two laws are exactly the same.  That fact is quite painful for the national participants in the supply chain and it gets a little worse every time a new law is enacted or a change is made to an existing law.  For this reason, the conventional wisdom among many supply chain participants, industry organizations, solution providers, and even the regulators themselves is that a nationwide pedigree law would be better than 50 different local laws.

Many of these entities are in favor of replacing those state laws with one administered by the U.S. Food and Drug Administration (FDA).  I don’t challenge that.  In this essay, I’m challenging the very need for any U.S. pedigree requirement at all.  Let me explain. Continue reading Do We Even Need To Mandate Drug Pedigrees Anymore?

Master Data, Supply Chain Master Data and Instance Data

We need to make a clear distinction between traditional Master Data (MD), Supply Chain Master Data (SCMD), and Instance Data (IData). This will help us understand some important differences in various supply chain track and trace technologies.

Master Data

Wikipedia defines “Master Data” like this today:

“…Master Data is that persistent, non-transactional data that defines a business entity for which there is, or should be, an agreed upon view across the organization.”

This isn’t detailed enough for me. MD must include a data element that serves as an identifier. An identifier that refers to a given MD record must be unique within the organization.

Good candidates for MD are customer information, location information, product information and employee information. The characteristic these all have in common is that the data behind them rarely change. For example, I have been issued an employee number by my company. My employee number is the unique identifier for the MD that describes me to the company. My mailing address, phone number, marital status, social security number rarely change.

Most organizations make use of MD so that they can maintain the definition of these entities in a single place, and they can simply refer to these definitions through the corresponding unique identifier. The identifier provides a quick way to get to the full set of information. In many cases, the identifier can serve as a stand-in for the full set of information.

Supply Chain Master Data

Wikipedia doesn’t yet have a definition for Supply Chain Master Data. I’ve coined the term to describe something that is similar, but distinctly different than Master Data as described above. I’ll define it like this:

“Supply Chain Master Data is that persistent, non-transactional data that defines a business entity for which there is, or should be, an agreed upon view across the supply chain.” Continue reading Master Data, Supply Chain Master Data and Instance Data

The Legitimate and Illegitimate Supply Chains

There are a number of important misunderstandings out there related to exactly how illegitimate pharmaceuticals get into the hands of unsuspecting consumers and patients. We need to understand all there is to know about the subject, especially those who are responsible for protecting the public against criminal activity and those who are contemplating new laws aimed at elevating the integrity of the supply chain. In this post, I want to define and differentiate the legitimate and the illegitimate pharmaceutical supply chains.

Extracting the meanings we are looking for, Wiktionary defines the adjective “legitimate” as:

  1. Accordant with law or with established legal forms and requirements; lawful
  2. Conforming to known principles, or accepted rules; valid
  3. (obsolete) Authorized; real, genuine

and the adjective “illegitimate” as:

  1. Illegal; against the law

I don’t think there is any surprise here since these words are in fairly common use, but let’s apply these adjectives to the pharmaceutical supply chain. We could deduce:

The Legitimate Pharmaceutical Supply Chain: The chain of pharmaceutical supply that conforms to known and established legal forms, principles and requirements; the lawful supply chain; the valid supply chain; the real, the authorized, the genuine supply chain.

The Illegitimate Pharmaceutical Supply Chain: The illegal supply chain

Again, no surprises here.

We need one more definition: supply chain.

Wikipedia defines “Supply Chain” as:

“A supply chain is the system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. …”

For pharmaceuticals, the supply chain begins with the manufacturer and ends with the consumer, or patient. (For logistical purposes we often talk of our supply chain beginning with the drug manufacturer and ending with the pharmacy, but in actual fact, it ends when the product is irreversibly consumed by the patient.)

We have a single legitimate pharmaceutical supply chain in the United States–filled with complexity, but singular nonetheless. I’ve heard people make the claim that “their [pharma] supply chain is secure”, as if there were many pharma supply chains and it is no concern of theirs if anyone else’s supply chain might not be secure. For security purposes we should treat the U.S. supply chain as a single entity. Martin Luther King famously once wrote, “Injustice anywhere is a threat to justice everywhere”. Similarly, in the pharma supply chain, it could be said that insecurity anywhere is a threat to security everywhere.

Likewise, I believe we have only one significant illegitimate supply chain: the internet. That’s a topic all on its own.

Both the legitimate and the illegitimate supply chains end with the consumer/patient. Interestingly, illegitimate drugs (counterfeit, stolen, diverted, up-labeled, adulterated) can reach the consumer/patient from both the legitimate and the illegitimate supply chains.

Here is perhaps the first surprise in this essay. If we have already separated the legitimate and the illegitimate pharma supply chains, how is it possible for illegitimate drugs to make it into the legitimate supply chain? Wouldn’t they only exist in the illegitimate supply chain?

The answer to the second question is “No”. I selected the adjectives “legitimate” and “illegitimate” for supply chains and for the drugs that pass in them. Just because the adjective is the same doesn’t mean that the subjects are bound to each other.

The answer to the first question is less intuitive. How do illegitimate drugs make it to consumers/patients through the legitimate supply chain? The answer is well documented in Katherine Eban’s book, “Dangerous Doses” already discussed in an earlier post. Look at the case of Timothy Fagan. His parents did not order his Epogen from a website. They bought it (in New York in 2002, prior to the crackdown on criminals in Florida…don’t miss my comments on how much has changed since then) from their favorite national chain pharmacy, a very solid participant in the legitimate pharma supply chain. But the Epogen was “counterfeit” (actually up-labeled and spoiled due to storage at improper temperatures) and Timothy nearly lost his life as the result.

In her book, Eban follows the path of the Epogen from manufacturer to Fagan. It’s a very interesting case. A legitimate drug started out in the legitimate supply chain and it was transformed into an illegitimate drug on its way to the consumer/patient. Did it exit the legitimate supply chain, get transformed by criminals and then get reintroduced, or was the transformation executed by criminals who had infiltrated the legitimate supply chain? The answer depends on whether all of the owners were properly licensed to buy and sell that type of pharmaceutical. If they were, then the drug did not exit the legitimate supply chain. Yes, one or more of the supply chain participants were criminal enterprises, but because they were licensed, they were a legitimate part of the legitimate pharma supply chain at the time.

The point is, individual or groups of criminals can infiltrate the legitimate supply chain at any point (even in big-name companies…read the book!). Once they do, illegitimate drugs can be introduced into the supply chain…easily.

Fundamental Law of Commerce

Over the last few years I have been kicking around an idea that helps identify an important characteristic that will be necessary in any successful supply chain pedigree or track and trace technology/regulation. I can sum it up as follows:

When regulations mandate that a product’s value is determined by the ability to show, at any time, specific information about the product’s history, then the buyer of that product must receive all of the necessary information from the seller at the same time the product is received.

Take, for instance, a secondary wholesaler in Florida today. Florida requires a secondary wholesaler to be able to show an inspector a complete pedigree for any prescription drug in their possession. If the wholesaler cannot show the proper pedigree, then the product cannot be sold in Florida. The value of the item is reduced, perhaps to zero. If this drug-without-a-pedigree can legally be shipped to sites or customers outside of Florida the reduction in value is equal to the cost of the extra shipment, extra handling and perhaps a temporary out-of-stock situation until the unexpected loss can be backfilled (and possibly a fine).

Now imagine what would happen if there were no other place to legally ship drugs whose pedigree information is unavailable when called upon. The value of the drugs would certainly be zero, or worse. That’s a risk that can be avoided by ensuring that all of the information necessary for the pedigree is in the possession of the secondary wholesaler at the time they purchase the drug.

What would cause the information to not be available? Some technical approaches to maintaining pedigree information under discussion within the industry right now might result in something I call a “distributed” pedigree. That is, one that is stored across multiple organizations; the previous owners of the drug. When it is necessary to show a complete pedigree–to an inspector, a law enforcement organization, or just to a buyer–these other organization must be called upon to provide their part of the pedigree. The occasion that leads to the need to show a complete pedigree will probably occur somewhat unexpectedly (especially in the instance of a regulatory inspection or a law enforcement action). If one or more of the organizations holding part of the pedigree information are temporarily or permanently unable to provide their part of the pedigree, the product cannot be sold and thus has lost all of its value.

The real problem with a distributed pedigree occurs when the supply chain extends beyond just two trading partners. For example, the third owner of a drug in the supply chain probably doesn’t have any business relationship with the manufacturer (the first owner). That’s why they bought the product from the second owner. There is probably no contract between the current owner of the drug and the previous owners (except the most recent seller) so there is no way to ensure that these earlier owners will provide their necessary components to the pedigree when it is called for.

The solution is to make sure that all of the necessary data for the pedigree is always supplied by the seller at the time of purchase. That way, if any of the earlier owners have technical (or other) difficulties that prevent them from being able to serve up data, it won’t affect the value of the drugs that are downstream in the supply chain. In short, a “distributed” pedigree won’t work.

I believe this concept is a corollary to the fundamental law of commerce known as “Buyer Beware”. Transmitting a full pedigree at the time of the sales transaction is one way of arming the buyer with sufficient information so they can beware.