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U.S. Department of Health and Human Services

Drugs

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Counterfeit Drug Task Report February 2004 Update - SECURE BUSINESS PRACTICES

1. What FDA sought comment on:

  • Whether to develop sets of "secure business practices" which would be voluntarily adopted by manufacturers, wholesalers, re-packagers, and pharmacies?
  • Whether stakeholders should designate an individual or team to coordinate security and anti-counterfeiting activities?
  • Issuance of an FDA guidance document concerning physical site security and supply chain integrity?
  • There was no proposal specific to re-packagers. However, FDA identified independent re-packaging operations, through several ongoing investigations, as a point of entry for counterfeit drugs into the distribution system, and some of the proposed options would have had the effect of limiting those re-packaging operations.

2. What the comments said:

The comments supported the need for development of secure business practices by all stakeholders in the drug distribution chain because each stakeholder has a responsibility to ensure that pharmaceutical products are authentic. The comments suggested that such practices include ensuring the legitimacy of business partners and refusing to do business with persons of unknown or dubious background, taking steps to ensure physical security, and identifying an individual or team in the organization with primary responsibility for ensuring that effective security practices are implemented.

It is critically important that the physical facilities involved in the production, distribution, or dispensing of pharmaceuticals are secure against counterfeit drugs. In the area of food safety, our Center for Food Safety and Nutrition (CFSAN) has issued guidance for the food industry on preventive measures that establishments may take to minimize the risk that products under their control will be subject to tampering or other malicious, criminal, or terrorist actions.

Although it was acknowledged that re-packagers were required to comply with Current Good Manufacturing Practices as set forth in 21 CFR 210 and 21 CFR 211, due to the involvement of re-packaging operations in some recent counterfeiting schemes, FDA was asked to provide more oversight and to conduct more frequent inspections of re-packagers.

See Appendix B for a detailed discussion of actions taken by manufacturers, wholesalers, and pharmacists to develop secure business practices.

3. Discussion:

Recent counterfeiting cases demonstrate that the current business practices of participants in the U. S. drug distribution system are in some cases inadequate to prevent the introduction of counterfeit drugs. Implementation of secure business practices by participants in the U.S. drug supply chain is critical for deterring and detecting counterfeit drugs. Therefore, FDA commends and strongly supports efforts to develop and implement secure business practices for these participants. FDA plans to facilitate and encourage the development of innovative approaches to securing business transactions in the drug supply chain. The number of stakeholders who have told FDA they are already implementing the business practices discussed above is very encouraging. In addition to identifying effective security measures, the designation of an individual or team to have primary responsibility for coordinating security activities helps ensure effective implementation.

FDA agrees that re-packaging operations can be a significant vulnerability in the drug supply chain. Although current statutory and regulatory requirements allow for appropriate oversight of re-packagers, FDA agrees that enforcement of those requirements could be strengthened.

4. FDA Conclusions:

For government efforts against counterfeit drugs to be successful, drug producers, distributors, and dispensers will have to take effective actions to secure their business practices.

  • Efforts by stakeholders to develop the secure business practices listed above would help protect the public health and diminish counterfeiting;
  • FDA plans to work with individual stakeholders and groups representing stakeholders, as necessary and appropriate, to continue to develop, make publicly available, and widely disseminate secure business practices;
  • Good security practices include designation of an individual or team, reporting directly to the organization's senior management, to coordinate the security and anti-counterfeiting activities for the organization;
  • FDA supports efforts by pharmaceutical manufacturers, wholesalers, and retailers to secure their physical facilities against counterfeit drugs. FDA plans to issue guidance on physical site security that applies to participants in the U.S. drug distribution system.
  • FDA plans to make its oversight over re-packagers of drugs a higher priority. FDA expects to increase the frequency with which it inspects re-packagers whose operations are found to be at increased risk for the introduction of counterfeit drugs. The increase in frequency will be based on the degree of risk, as determined by applying to re-packaging operations the risk based model FDA is developing for prioritizing inspections of drug manufacturing sites.