Industry Issue: Importation/Reimportation of Drugs

1. Industry Issue: Importation/Reimportation of Drugs By Marv Shepherd, Ph.D. Director Center for Pharmacoeconomic Studies College of Pharmacy University of Texas Austin, TX 78712 Email: marvshepherd@mail.utexas.edu

3. Introduction • First an overview of the extent of drug importation. • Threats of product integrity from imported drugs. • Overview of counterfeit drugs. • Why people procure imported drugs. • Vulnerability points of the US drug distribution system. • Canadian Drug Market • Political realities

4. Introduction • Bringing prescription drug products into the U.S. from Mexico and Canada has been going on for decades, if not centuries. • With the easy access to Internet pharmacies, the problem of drug importation continues to grow at enormous proportions.

5. Myth # 1 “It is legal to personally import drugs into the U.S.”

6. Drug importation is illegal! • The only groups which can import drug products are pharmaceutical manufacturers. Personal drug importation is illegal. • However, FDA has allowed some variances.

7. Myth # 2 “Drug importation is a one dimensional issue. It purely an economic issue!”

8. Drug importation is not just a one dimensional issue! It is a very complicated issue. • The problem has many fronts. There are political issues, financial issues, economic/competition issues, international trade concerns, legal and liability concerns, health care issues, plus many social issues.

9. For legal importation to take place it will take the understanding and cooperation from many governmental agencies, law enforcement agencies, private and public organizations, consumer groups and associations. This cooperation cannot only occur in the U.S. It requires cooperation from exporting countries. • Plus, it will require additional funding for FDA and U.S. Customs.

10. Myth # 3 Drug importation is safe. No one has ever been hurt from imported drugs.

11. People have been harmed and people have died from imported drugs. • Some imported products contain the correct amount of active ingredients others contain no active ingredient, too little or too much. • Counterfeit drugs w/o active ingredients usually do not kill. It may take weeks, months or years to see the effects.

12. Myth # 4 All foreign pharmacies doing business with Americans are licensed and follow U.S. laws and regulations.

13. There are over a thousand internet pharmacy sites worldwide offering a variety of drug products. • Many do follow regulations within their country but some of these regulations are weak compared to U.S. standards. • Many DO NOT abide by U.S. or state standards to do business with U.S. residents.

14. Many of these foreign pharmacy internet sites selling drugs to Americans are rogue, fraudulent sites. They pop-up one day and disappear the next. They are difficult to track and difficult to find their location. • Some sites are operated by felons, criminals with links to organized crime, and drug cartels.Many are not operated by pharmacists. • Some site dispense counterfeit, non-FDA approved drugs.

15. In an examination of 45 Canadian Internet pharmacy sites, 15 appeared to falsely advertise that their country of origin was Canada. • Investigations found the sites were from U.S., Barbados, and Mexico. • For example, the site CanadaRxfree.com is from Mexico City. (Source: Global Options)

16. Some sites are very deceptive. For example many sites have been found to use Canada in their domain name but the pharmacy is located in another country. CanadaRx.com was dispensing drugs out of a pharmacy in the Bahamas, when patients thought they were located in Canada.

17. To assure that the internet site is a legitimate, licensed pharmacy, look for the VIPPS seal on the opening screen. • The VIPPS (Verified Internet Pharmacy Provider Site) seal is given by the National Association of Boards of Pharmacy.

18. Myth # 5 Americans are required to have a prescription to get prescription drugs from a foreign pharmacy.

19. For many pharmacy sites you don’t even need a prescription!!! All you need is a credit card number and address. • In fact, for many countries, such as Mexico, prescriptions are not necessary for many therapeutic categories of drugs.

20. In Canada, it is illegal to fill a prescription written by U.S. physician unless they are licensed in Canada. Canadian physicians are required to rewrite the prescription or co-signed the prescription. • Many Canadian health care practitioners, associations and regulators want to ban this co-signing of prescriptions. It is an unethical practice: no patient contact, no examination. • It has been reported that Canadian internet firms pay physicians $10.00 per Rx rewritten.

21. Myth # 6 Although drug importation is a hot political issue, few drugs are coming from other countries.

22. Extent of Drug Importation • At a U.S. House Congressional open hearing (June 24, 2003), Rep. Greenwood reported that 30,000 drug packages arrive each day at the Miami international mail facility. • Over 10,000 parcels arrive daily at the Carson City mail facility here in California. • 40,000 parcels arrive daily at the JFK airport. Each package contained chewable sildenafil (Viagra). Many parcels contain more than one drug.

23. All these shipments in brown and white envelops were from Honduras, UK or Belize. All were labeled Valium. This bin is 3x4x3 feet. This is one days shipment. Miami International Mail Branch. Fake Valium shipments

24. Counterfeit Valium shipments for one day—Miami International Mail Branch, March 2004.

25. Drugs are from all over the world. The true manufacturing site is unknown on many. Container size suggest more than 90 day personal use.

26. Teddy bears stuffed with counterfeit Viagra being shipped to a carpet cleaning business in Ohio.

27. It is estimated that 20 million packages containing drugs arrive annually via international U.S. mail. This is an increase of 1000% in just two years and it continues to grow. These estimates do not include Fed Express, UPS or other delivery mechanisms. • The HHS Drug Importation study released in December 2004 estimates that 12 million prescriptions were sold by Canada to U.S. residents. This was approximately a $700 million transaction.

28. More current estimates indicate that Canadians export an estimated $1.1 billion (U.S. dollars) of drugs to U.S residents. Considering that the total Canadian drug market is just $8 to $10 billion, this constitutes a major business for Canada. • Mexico sells $800 million just from border farmacias.

29. Myth # 7 Imported drug products are safe and effective products.

30. Partially true! Some drugs are of good quality some are not. Few are FDA approved. Problem: it is difficult to determine what is good what is bad. Source: www.fda.gov/news/2003/new00948.html

31. What is troubling is that the vast majority of the pharmaceutical products coming into the U.S. are NOT approved by the FDA. Many are substandard products or fake products. Source: www.fda.gov/news/2003/new00948.html

32. FDA has determined that imported drug products may • Contain no active ingredient, too little or too much active ingredient. • Be expired or have a false expiration date. • Be contaminated. • Be stored at the wrong temperature or under unsafe conditions.

33. Be a counterfeit or fake medicine. • Be fraudulently or inadequately labeled. • Be a product which has been withdrawn from the market. • Be animal drugs not for approved human use. • Be inappropriately packaged.

35. Continuation of Myth # 7 Imported drugs are safe and effective.

36. Threat of Counterfeit Pharmaceuticals CAUTION: MEDICINE MAY BE FAKE WARNING: MAY BE EXPIRED,WATERED DOWNED OR MISLABELED DIRECTIONS: TAKE WITH HEALTHY DOSE OF SKEPTISM

37. Definition of Counterfeit Prescription Drugs • Counterfeit medication is one which is deliberately and fraudulently mislabeled with respect to identity and/or source. • Counterfeiting can apply to both brand and generic products. • Counterfeit products may include products with correct ingredients, wrong ingredients, without active ingredients, with insufficient quantities of active ingredient or with fake packaging.

38. Trend in Number of FDA Counterfeit Drug Cases Source: FDA Counterfeit Drug Report, February 2004, the 2004 figure came from Business Week, February 7, 2005.

39. Counterfeit drugs continue to be a growing concern. It is anticipated that the number of counterfeit drugs will continue to increase. Since 1996, 73 fake pharmaceutical cases have been opened in the U.S. Legal results show 44 arrests and 27 convictions. In 2003 there were 22 fake drug cases opened by the FDA. Most recent counterfeit drugs found in the U.S. Procrit® Lipitor® Serostim® Neupogen® Epogen® Combivir® Zyprexa® Viagra® Diflucan® Ortho Evra ® Ambien® Botox Caution: Fake

40. It has been estimated by the WHO that counterfeit drugs comprise 8 percent of the world market. For some countries (African, Latin) counterfeits comprise 40 to 50 percent of the market. Estimated to be $20 to over a $40 billion market. (WHO) Sources of Counterfeit Drugs India—it is estimated at 15 to 20% drugs are fake. (Script, April 16, 2003) China Brazil (40% to 50% fake) Mexico (25% fake) Pakistan Belize Chile Southeast Asia Countries (30 to 50%) Extent of Counterfeit Drugs and Major Sources

41. The extent of counterfeit drugs in the U.S. has not been determined. Some commonly heard estimates are that it is less than 1%. However, with the proliferation of internet drug sites and the number of drug entering the U.S. from other countries, this estimate may be low.

42. Often times the counterfeit product is mixed with legitimate products to confuse investigators. The counterfeit Lipitor found in the U.S. last summer was mixed with authentic product. • Makes it difficult to determine the extent of counterfeiting.

43. Lipitor® (atorvastatin calcium) Which one is the counterfeit Lipitor®? Source: Pfizer Inc.

44. Lipitor® (atorvastatin calcium) Which one is the counterfeit Lipitor®? FAKE AUTHENTIC Source: Pfizer Inc.

45. Celebrex® (celecoxib) Which one is the fake Celebrex®? Source: Pfizer Inc.

46. Celebrex® (celecoxib) Which one is the fake? COUNTERFEIT AUTHENTIC Source: Pfizer Inc.

47. Counterfeit Gabantin Drugs purchased over the Internet by an American patient who was told that the products were manufactured in the United States and were being sold from Canada. The drugs he actually received are fake “knockoffs” from India.

48. Counterfeit Zantac Manufactured in Taiwan, discovered in United Kingdom. Excellent packaging of counterfeit, even includes counterfeit package insert. Source: Pharmaceutical Research Manufacturers Association

49. Counterfeit Ponstan Ponstan is an anti-inflammatory product. This counterfeit was found in Columbia. First is the yellow powder; it consist of boric acid, floor wax, yellow highway paint. Pressed into tablets and placed in foil packs with labeling. Source: Pharmaceutical Manufacturer Research Association

50. Counterfeit Patch—no active ingredient Authentic Ortho Evra Contraceptive Patch and packaging