A Prescription For Trouble

‘Dangerous Doses’ and America’s other drug problem.

A Prescription For Trouble

Investigative journalist Katherine Eban.

Most Americans equate the “war on drugs” with illegal substances such as heroin, cocaine, and marijuana. But since the turn of the century the contamination of the country’s prescription drug supply has become a greater and more insidious threat. With prices for pharmaceuticals soaring and regulation of their distribution almost non-existent, criminals have seized the opportunity to interject themselves into the supply chain, serving as middlemen between manufacturers and pharmacies. By selling stolen, compromised, impotent, and even counterfeit medicine, these unscrupulous wholesalers are generating outrageous profits, while threatening the health of all Americans who fill prescriptions at our nation’s drug stores.

In “Dangerous Doses” (Harcourt) investigative journalist Katherine Eban exposes this unknown dark side of our pharmaceutical system, and reveals the outsized efforts of the “Five Horsemen of the Apocalypse”—five Florida investigators dedicated to protecting the public from bad medicine. In the following Q&A, Eban reveals the pervasiveness of America’s other drug problem, as well as which prescription drugs are most likely to be counterfeited.

How can “Dangerous Doses” help people educate themselves about the dangers of counterfeit medicine?
First, people need to understand how drugs arrive at their pharmacies. Certainly they are going to understand where their medicine has been after reading the book. My fondest hope is that it will lead to even more of an outcry over the current pricing structure. This notion that you go into a pharmacy and pay the most in the world for a drug and nobody can guarantee where it has come from is a huge consumer fraud. Let’s say you’re at a Duane Reade or a Rite Aid and there are two signs: One is top price for “guaranteed pristine drugs.” The other sign offers a discount on drugs that may have moved through a dozen hands, may have been sitting in a beer cooler in a strip club, or may have been handled by narcotics traffickers. The latter are the kinds of drugs we have been buying, and we don’t get a discount on them. We pay top dollar. The middleman gets the discount and we don’t know where the drugs have been. “Dangerous Doses” is a tour of this pharmaceutical underbelly that readers can take along with a group of Florida cops and pharmacists who, at one moment in time, were trying to protect the entire country from counterfeit medicine.

When did the United States’ counterfeit drug problem begin to manifest itself?
It really became quite serious about five years ago. What happened is that the war on drugs drove narcotics traffickers over to pharmaceuticals. That’s when you saw counterfeits entering our porous distribution system.

Which prescription drugs have been especially vulnerable to counterfeiting?
As a rule, either the most expensive or the most widely used. Counterfeiters are businessmen and they look at the market and what they can get the best return on. The most expensive have tended to be the injectable biotechnology drugs for cancer, AIDS, and organ transplants. The tragedy is that these drugs are for patients that need them the most.

What role have “legitimate” wholesalers played in the scheme of this problem?
The big “legitimate” wholesalers [Cardinal Health, AmerisourceBergen, and McKesson] have had entire divisions devoted to buying discounted drugs in what we call the secondary market. In Florida, the secondary market was anybody with a pulse. Anyone could become a pharmaceutical wholesaler. In fact, convicted narcotics traffickers became licensed wholesalers. It was those guys that were offering discounts to the biggest distributors. How can some amoeba in Florida sell for a lower price than the manufacturers themselves? The answer is that there is something wrong with the drugs [stolen, adulterated, counterfeit, etc.]. The price tells a story and the industry knows what the story is. The role of these big wholesalers is to jump at these big discounts and then look the other way.

Is it possible for an individual consumer to bypass the distribution network by buying directly from a manufacturer?
No, it isn’t. Maybe if you have connections there is some way to do it, but basically there is no structured or established way for an individual to do that.

What has happened is that when patients suspected they got counterfeit drugs they called up the drug makers and said, “We suspect counterfeits.” The drug makers would say, “Send us back all your medicine and we’ll replace it with good medicine.” The problem there is that they collected all of the counterfeit medicine and then the patient had no evidence that they had been the victim of a crime and no way to sue the drug maker.

What should an individual do if he or she suspects having been dispensed counterfeit pharmaceuticals?
They should report it to their pharmacist and physician, and also report it to the drug maker and to the Food and Drug Administration (FDA). The FDA has a Web site called MedWatch [http://www.fda.gov/medwatch/index.html].

What are drug manufacturers doing to combat this problem?
First, they are getting very high tech about their packaging. They are embedding chemical markers into the packaging—and if it’s a liquid putting chemical markers in the drugs themselves, so they can do a first blush test to tell if it’s authentic. They are also using the same kind of color shifting inks that are used in the new $20 bills, as well as holograms. Of course, they have to update the overt security features continuously. Given twelve to eighteen months counterfeiters can copy anything.

What more should the manufacturers be doing?
There are two simple answers to that question. Number one is to lower prices. America has become the world’s go-to market for counterfeiters. Every counterfeiter wants to get their products into our market because we pay more for pharmaceuticals.

The other thing is to level the pricing structure. Manufacturers offer many different prices for the same drug. They give one price to drugstores, another to wholesalers, another to doctors, another for export, another for charity. There are all these discounts in the market. That is what is allowing middlemen to go in and look for these arbitrage opportunities where they can buy low and sell high. If there was a level pricing structure, then when somebody came around offering a discount on the drugs you’d suspect that person. You’d say, “Where did you get the discount, pal?” The problem with the multi-tiered pricing is that it gives everybody in the industry a cover story for buying from the little guys.

Is export diversion still a big problem?
Huge. Whenever you see a drug maker selling medicine to people in other countries at a discount, you can be almost certain that at least fifty percent of that medicine is getting turned around midstream in what we call U-boat diversion or export diversion. It’s coming back and being re-sold in our market by unscrupulous wholesalers. I have had federal officials estimate to me that fifty percent of our drug supply is diverted medicine.

What kind of legislative changes do you believe are needed?
We need to have a federal law regulating these middlemen. We need to set standards and overhaul the criminal code for adulterating drugs and falsifying pedigree papers. Also, we should require a comprehensive audit trail throughout the system.

The day “Dangerous Doses” was published Congressman Steve Israel (D-NY) held a press conference where he introduced Tim Fagan’s law [named after a Long Island teenager who received counterfeit Epogen after a liver transplant], which would overhaul the drug distribution system. That is what is needed.

How has his proposal been received?
He does not yet have a co-sponsor in the Senate, and he is looking for that right now. Israel has certainly received a lot of attention, but it is an uphill battle in this Congress.

Is law enforcement gaining a greater appreciation for this problem?
Yes, they are. That’s one of the most important things that can happen. Because if a cop stops a guy with a case of Procrit in the trunk of his BMW most of the time the officer doesn’t even know that a crime has occurred. Whereas if he stops the same guy with a kilo of cocaine he knows it’s a crime.

I know “Dangerous Doses” just recently went on sale, but what kind of impact has it had on the counterfeiting problem thus far?
Actually a fairly significant one. Just after it came out two things happened in the industry. First, Cardinal Health announced that it was closing a trading division that bought from the secondary market. The other thing is that [national drugstore chain] CVS announced it was no longer going to buy from wholesalers that bought from the secondary market.

Have you personally lost faith in the pharmaceutical industry?
[Laughs]. Let me put it this way. Before I started investigating this issue I assumed that our drugs came directly from drug makers’ loading docks to our pharmacies. I didn’t know that these middlemen existed and I would say that most people don’t. For years we have been buying stolen, recycled, adulterated, substandard medicine from our pharmacies. Who knew?