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U.S. Department of Health and Human Services


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FDA Initiative to Combat Counterfeit Drugs

In an effort to protect against the rising occurrence of potentially unsafe counterfeit drugs reaching consumers, FDA is announcing a new initiative to more aggressively protect American consumers from the risks posed by counterfeit drugs. As part of this effort, FDA has created a new internal task force that will develop recommendations for steps FDA, other government agencies, and the private sector can take to minimize the risks to the public from counterfeit drugs getting into the supply chain.

Background on Counterfeit Drugs

Risks of Counterfeit Drugs

Counterfeit drugs pose potentially serious public health and safety concerns. They may contain only inactive ingredients, incorrect ingredients, improper dosages, or even dangerous sub-potent or super-potent ingredients. Drug counterfeiting is a relatively rare event in this country; however, FDA has seen its counterfeit drug investigations increase to over 20 per year since 2000, after averaging only about 5 per year through the late 1990s.

In addition, counterfeiting in recent years has shifted increasingly into “finished” pharmaceuticals (the final product taken by the patient) as opposed to counterfeiting of “bulk” drug ingredients in the past. As drug manufacturing and the distribution system have become more complex, there are increased opportunities to introduce more legitimate appearing products into the drug supply in the U.S., and the challenge of protecting against unsafe counterfeit drugs has become more difficult.

Open cases 1997 six, 1998 four, 1999 six, 2000 six, 2001 20, 2002 twenty-two

Even a small percentage of counterfeit drugs in the drug supply can pose significant health risks to thousands of Americans. In recent years, FDA has encountered a range of counterfeit drugs that illustrate the public health threats posed by counterfeiters drugs:

Toxic Effects: Some fake drugs contain ingredients that, if ingested or injected, can cause health problems. For example, the recently counterfeited Procrit, an important drug for cancer and AIDS patients, contained nonsterile tap water, which can cause an infection in the bloodstream.

Unintended Effects: Some counterfeits substitute one drug for another. For example, insulin has been substituted for a more expensive injectable drug. And last year, counterfeiters emptied bottles of Zyprexa, a drug used for schizophrenia and acute bipolar mania, and replaced them with white tablets imprinted with the word “aspirin.”

Ineffective Treatments: Some fake drugs contain some active ingredient, but are subpotent. Others attempt to accurately copy the real drug, but still pose safety risks because they are not formulated in a way that achieves the right therapeutic levels in the patient’s blood.

No active ingredients: Some counterfeit drugs have no active ingredients. For example, a counterfeit version of Serostim, a growth hormone used in AIDS patients, was found to have no active ingredient.

Comparison between authentic and fake boxes of Serostim

Labels that look real: Over the past several years, counterfeiters have gained access to sophisticated technologies that enable them to very closely duplicate the packaging and labeling of legitimate prescription drugs. In fact, labeling for a product can be so exactly duplicated that it may require extremely close inspection by experts in order to identify subtle differences from the legitimate product. 


Counterfeit duplication of product labeling example

Comparison between authentic and fake Neupogen. The font and quality of print is different.

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.

Drug manufactured in India but sold as manufactured in US


In all of these cases, at a minimum, patients face the risk of therapeutic failures or worsening of the health problem that the drug was intended to treat. Sometimes, toxicities can be potentially much worse. While no fatalities have been causally linked to specific counterfeit drugs in the last decade, criminals who engage in such counterfeiting practices clearly have disregard for the well-being of ill patients and the safe practices of legitimate companies and individuals involved in the distribution of prescription drugs.

The movement of legitimate pharmaceuticals in this country relies on the wholesale industry. Primary wholesalers purchase drugs directly from manufacturers and then sell the products directly to a pharmacy, hospital, institution, other dispenser, or secondary wholesaler. In the U.S., three primary wholesalers account for 90% of the prescription drugs distributed in this country. Occasionally, when low-cost drugs are available (e.g., because of temporary excess in the supply of a drug), primary wholesalers purchase from secondary wholesalers. Secondary wholesalers usually deal in smaller quantities and have higher turnover of stock. But in some instances, some smaller wholesalers also knowingly or unknowingly take higher risks by obtaining drugs that may not have a clear “pedigree” traceable back to a legitimate manufacturer. Unlicensed or unregulated pharmacies may also knowingly or unknowingly distribute unapproved drugs. Counterfeit drugs entering the U.S. distribution supply chain can find their way into the system through the secondary wholesale market, where drugs can change hands several times before reaching the end user. Such drugs can also enter the U.S. market via disguised imports from other countries, or through the purchase by American consumers of drugs through the internet.

Because counterfeiting is difficult to detect, investigate, and quantify, it is hard to know the true extent of the problem. Outside the United States, drug counterfeiting is known to be widespread and affect both developing and developed countries. For example, in South-East Asian countries approximately 10% of drugs on the market are believed to be counterfeit. In China, authorities believe that for some drugs, the estimated average counterfeit copies can be as high as 50%. It is reported that in underdeveloped countries such as Argentina, Colombia, and Mexico, up to 40% of manufactured pharmaceuticals are believed to be counterfeit.

In 1988, the Prescription Drug Marketing Act (PDMA) was enacted as an effort to ensure that prescription drug products in the U.S. would be safe and effective and to avoid an unacceptable risk that counterfeit, adulterated, misbranded, subpotent, or expired drugs were being sold to the American public. The PDMA sought to introduce safeguards into the drug distribution system to provide assurances through paper records of the true source and distribution history (“pedigree”) of a prescription drug. While the PDMA provided some protections, it has important limitations:

  • Some of its provisions have made it possible for determined counterfeiters to skirt its intent.
  • Its reliance on paper records can be quite costly, especially for small- and medium-sized wholesalers. Also, paper records can be easily forged.
  • PDMA does not envision the use of modern technologies that can assist with tracking or verifying the authenticity of legitimate prescription drugs.

In the 15 years since PDMA was enacted, there have been many changes in the industry and in anti-counterfeiting technologies, as well the introduction of electronic ordering, inventory control, and record-keeping used by the pharmacies—which may provide more effective mechanisms to achieve PDMA’s goals.

FDA’s Current Efforts to Protect Americans from Counterfeit Drugs

FDA is committed to an aggressive enforcement strategy to combat counterfeit drugs. FDA has initiated 73 counterfeit drug investigations from October 1996 through June 2003, the majority having begun in the last 2 ½ years. These investigations have so far netted 44 arrests and 27 convictions, with a number of criminal investigations ongoing. Fines and/or restitution have been imposed in excess of $250,000. FDA works closely with federal, state, and local agencies, as well as the private sector, to identify and track down drug counterfeiters. Much of the activity has targeted high volume, high cost drugs where counterfeiters attempt to make the most money possible in a short time period. Drugs at risk for counterfeiting are often those found in the top 20 best selling prescription medications, including widely used cholesterol-lowering drugs, high blood pressure drugs, AIDS drugs, drugs used to raise red blood counts, and drugs used to fight depression.

FDA has public and private partners in this effort. FDA has been working closely with the U.S. Bureau of Customs and Border Patrol to identify suspect packages that may contain counterfeit drugs that cross into the U.S. from other countries and enter into the U.S. distribution system. This is a challenging task because there are a very large number of small packages entering the U.S. every day, many containing drugs purchased via the internet. Also, these small drug shipments, when consolidated by the addressee, can find their way into the secondary wholesale market. FDA has alerted consumers in the past of the significant risks associated with drugs purchased over the internet from unknown sources.

Under a voluntary program just begun, drug manufacturers will notify FDA within five working days of determining that there is a reasonable basis to believe that a product has been counterfeited. The program extends to counterfeits discovered in foreign countries if there is clear evidence to believe that they are intended for distribution in the U.S. The program went into effect in May, and it has already been used to provide several reports of counterfeit drugs to FDA, including those involving Procrit, and Lipitor, a widely prescribed cholesterol-lowering drug.

While FDA is seeking to improve deterrence and detection of counterfeit drugs, enforcing the law against health care criminals is a core part of FDA’s efforts to protect Americans from counterfeit drugs. Many of these counterfeit enforcement activities are the work of the FDA’s law enforcement arm, the Office of Criminal Investigations (OCI) in conjunction with other state and federal enforcement officers. For example, for the Procrit counterfeiting case, FDA’s OCI worked closely with Florida law enforcement officials in the investigation, arrest, and conviction of the counterfeiters.

Details of FDA’s New Initiative To Combat Counterfeit Drugs

To respond to the increased sophistication and increased opportunities of drug counterfeiting before it becomes a widespread problem, FDA’s new Counterfeit Drug Initiative is designed to better identify the risks and threats from counterfeit drugs, to coordinate public and private efforts to fight counterfeiters, and to identify technologies and tools to aid in identifying, deterring, and combating counterfeiting. A new internal FDA Counterfeit Drug Task Force will be charged with exploring measures to be taken to prevent patients being exposed to counterfeit drugs.

Some of the areas that the FDA Task Force will explore include:

  • Technology. The task force will examine currently available and potential, future, low-cost technologies that can be used to assure product and package integrity and track legitimate products through the distribution chain. Known technologies include those visible to the naked eye, such as inks and watermarks. These features could be used with existing packaging and the existence of such a mark would help consumers and pharmacists identify counterfeit drugs. In some cases covert features may be used to authenticate products when used with special equipment (e.g., magnifying lens, special lamps). However, one limitation of packaging technologies is that, if they are not linked inextricably to particular drug product (e.g., using marks on “blister packs” or similar technology), it is possible that counterfeiters would repackage illegitimate drugs in legitimate packaging. Moreover, it may be costly and time-intensive to use the tools required to authenticate such printed package labels. In addition, incorporation of one or more substances into the drug product itself, (e.g., taggants) may also be useful in distinguishing legitimate from counterfeit drugs. Technologies are being developed to track products through the distribution chain. These include bar coding and radio frequency chips. These technologies are able to transmit a great deal of very specific information about the product and can enable distributors and retailers to track products through the entire distribution network. Although many of these technologies are not now mature and have limitations, and further cost-benefit analysis is needed, they offer great promise as counter-measures to make legitimate prescription drugs more secure from counterfeiters.
  • Border Study. With assistance from U.S. Customs and Border Protection, the task force will initiate a study of pharmaceuticals entering the United States at several major ports of entry, to better determine the type and extent of drugs arriving from overseas and the degree to which counterfeit drugs are among such imports.
  • Alert System. The task force will seek to improve upon the current counterfeit alert system to enhance communication about known or suspected counterfeit products to all parties in the distribution supply chain.
  • Strengthen Distribution System. The group will identify mechanisms to strengthen the wholesale distribution system, such as helping create a model code of conduct for wholesalers and strengthen the model practice act for wholesale distributors for States to adopt. The goal is to increase protection of consumers without burdensome costs.
  • Engage Private Sector Stakeholders. The task force will gather private sector information and collaborate with pharmacy and health professionals, drugs manufacturers and distributors, consumer organizations, and other stakeholders on how to best counter these criminal practices.
  • Engage Other Government Agencies. The task force will improve coordination with other government agencies, including the U.S. Customs and Border Protection Service, the Treasury Department, the Department of Justice, and States, who have experience with counterfeiting.
  • Public Education. The group will recommend ways to educate consumers about steps they can take to minimize risks associated with counterfeit drugs. It will also educate consumers about what to look for, and what to do, if they suspect they have received a counterfeit drug.
  • Higher Penalties. The task force will explore the potential deterrence and other effects of stiffer penalties on those found guilty of counterfeiting prescription drugs in the U.S. are needed (For example, the current penalty for counterfeiting a drug label is 10 years in prison, but for counterfeiting the actual drug may only be 3 years.)

Task Force Reports

In about two months, the FDA task force will issue an interim report with recommendations for public comment. Following input from interested parties on the report and recommendations, FDA intends to finalize the report within six months and to issue a strategic action plan outlining pubic and private sector actions needed to address the growing concern about counterfeit drugs.