The Global Impact of Fake Medicine
About This Event

Substandard and counterfeit medicines are a global, growing, and increasingly deadly menace. Last year, the Food and Drug Administration reported the deaths of ninety-five Americans from tainted heparin, a blood-thinning medicine believed to have been "intentionally contaminated" in China; this spring, at least eighty-four Nigerian children died after ingesting teething Listen to Audio

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medicine laced with diethylene glycol, a common component of antifreeze.

In addition to posing life-threatening dangers, substandard medicines increase drug resistance, threatening the viability of future treatment for diseases like HIV and malaria; counterfeit drugs also undermine incentives for R&D of new drugs. And while bilateral and international health initiatives spend billions of taxpayer dollars on pharmaceutical drugs for the developing world every year, oversight is minimal, and little direct quality testing is done on the drugs procured.

What are the best, most cost-effective ways for identifying counterfeit and substandard drugs in the field? How can consumers, regulatory bodies, industry, and international donor agencies work together to combat their deadly impact?

Please join experts from government, industry, and the international donor community for discussions on the extent of the problem, on what the public and private sectors are currently doing to combat it, and on how they can leverage innovative technological and policy solutions in the future. Panelists will include Ilisa Bernstein, director of pharmacy affairs at the FDA; Patrick Ford, senior director of global security for Pfizer; Jeffrey Gren, director of health and consumer goods at the U.S. Department of Commerce; Sonali Korde, a key player in the $1.2 billion President's Malaria Initiative; Scott LaGanga, executive director of the Partnership for Safe Medicines; Patrick Lukulay, director of drug quality and information at U.S. Pharmacopeia, the official NGO responsible for setting quality standards for all medicines manufactured in the United States; Paul Orhii, director general of Nigeria's National Agency for Food and Drug Administration and Control; and Richard Tren, founder and director of the health policy and advocacy group Africa Fighting Malaria. Moderating the two panels will be, respectively, AEI's Roger Bate and Michael Miller, who helped launch permanent FDA offices in China and India.


Event Summary

WASHINGTON, JUNE 16, 2009--At a recent American Enterprise Institute conference, experts from government, industry, and the international donor community agreed that counterfeit and substandard medicines pose a global, growing threat, particularly in developing countries. According to the World Health Organization (WHO), 30 percent of drugs in some areas of Africa and Asia are counterfeit or substandard. Substandard products at best fail to cure and at worst may sicken or kill patients if they contain harmful ingredients. Counterfeit products infringe on patents and thereby undermine incentives for future research and development.

In developed countries, the percentage of counterfeit and substandard drugs remains low--likely far less than 1 percent--Ilisa Bernstein, director of pharmacy affairs at the U.S. Food and Drug Administration (FDA), reported. But even this could be significant, given that U.S. consumers fill more than 4 billion prescriptions every year. And with more than 60 percent of active pharmaceutical ingredients (API) used to make U.S. medicines sourced from India and China--which have many high-quality manufacturers but also less stringent regulatory authorities--greater vigilance and international collaboration is needed, said Jeffrey Gren, director of the office of health and consumer goods at the U.S. Department of Commerce.

Such collaboration, however, may be hobbled by contention over how to define and quantify the problem. "If there is patent infringement, is this a quality assurance issue?" asked Patrick Lukulay, director of drug quality and information at U.S. Pharmacopeia, the official NGO responsible for setting quality standards for all medicines manufactured in the United States. Scott LaGanga of the Partnership for Safe Medicines acknowledged the need to differentiate on the matter of intent but asserted that the public health threat from substandard and counterfeit products is equivalent.

Even with consensus, there may be difficulty in policing and prosecuting cases that span borders. Patrick Ford, director of corporate global security at Pfizer, warned that in countries where counterfeiting does not affect citizens directly, governments often have "less interest in investigating it." Industry may not have commercial incentives to combat the problem in all places. For example, of Pfizer's 11.1 million product seizures in 2008, few occurred in African countries outside of South Africa and Nigeria because it takes a great deal of effort on the part of Pfizer to investigate fake products and only significant markets are likely to see expensive investigative attention.

WHO's Drug Prequalification Program can help procurers identify drugs that have passed regulatory muster, but the process is costly and time-intensive, and not all companies producing high-quality drugs register. The U.S. President's Malaria Initiative assesses the hundreds of millions of dollars in products it procures and distributes on a case-by-case basis, says Sonali Korde, senior technical malaria adviser at USAID, and other major procurers like IDA Mission Pharma and UNICEF do likewise.

Outside the public sector, there is little quality control. According to Richard Tren, founder of Africa Fighting Malaria, 50–70 percent of people buy medicine through the private sector because they lack access to public facilities that stock appropriate therapies, and more independent quality assessment is needed.

But such assessment must be country-specific and country-led, AEI's Roger Bate said. "What needs to be done in India is not necessarily what needs to be done in the rest of the world." New technology--including holograms, radio frequency identification (RFID), electromagnetic identification (EMID), scratch panels, and comprehensive e-pedigrees--offer regulators and firms several anticounterfeiting options.

Still, regulators cannot expect to "inspect our way to safety," warned Michael Miller, founder of consulting firm Navigator Strategies. Furthermore, such programs may not be affordable or easily deployed in developing countries. Mobile labs that perform thin layer chromatography or hand-held Raman spectrometers could prove valuable; better public awareness, spurred by media attention, would also help.

Nigeria is one success story. A decade ago, WHO and Nigeria's drug regulatory authority NAFDAC estimated that 41–70 percent of drugs circulating in the country were substandard. The agency improved its policing and prosecution, working closely with WHO and the FDA, and the number of poor-quality products fell to less than 20 percent. "Nigeria is no longer a dumping ground for fake products," said NAFDAC director-general Paul Orhii.

But more can be done, Orhii added, addressing the audience of developed-country policymakers and industry leaders. "We're counting on your help, [and] interested in partnering very, very closely."


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Speaker biographies

Roger Bate is a resident fellow at AEI. He researches aid policy in Africa and the developing world, evaluating the performance and effectiveness of the U.S. Agency for International Development, the World Bank, the Millennium Challenge Corporation, NGOs, and other aid organizations and development policy initiatives. He writes extensively on topics such as endemic diseases in developing countries (malaria, HIV/AIDS), taxes and tariffs, water policy, access and innovation in pharmaceuticals, and international health agreements. Mr. Bate’s writings have appeared in, among others, the Wall Street Journal, the Financial Times, the Lancet, and the British Medical Journal. His most recent book is Making a Killing: The Deadly Implications of the Counterfeit Drug Trade (AEI Press, May 2008).

Ilisa Bernstein is director of pharmacy affairs in the Office of the Commissioner at the U.S. Food and Drug Administration (FDA), where she advises on drug regulatory issues and is the agency’s primary liaison with the pharmacy community. She has served in a variety of positions at the FDA, including as senior adviser for regulatory policy and as a senior science policy adviser in the Office of the Commissioner. Ms. Bernstein has also worked as a senior associate director at Pfizer, where she helped establish a regulatory liaison office to advise the company on FDA policies, regulations, and legislation. She is coauthor of Pharmacy Law Digest and has edited or contributed to numerous publications, including Handbook of Nonprescription Drugs, Handbook of Institutional Pharmacy Practice, Rx Ipsa Loquitur, and Pharmacy Law Annual.

Patrick Ford is senior director of global security at Pfizer, where he is responsible for managing anticounterfeiting initiatives and investigations throughout North and South America. Before this, he was a special agent with the Federal Bureau of Investigation, where he specialized in financial crimes, health care fraud, public corruption, and Internet crimes. He is a certified public accountant.

Jeffrey Gren is director of the Office of Health and Consumer Goods at the U.S. Department of Commerce, which assists U.S. firms by fostering export opportunities, providing support for trade negotiations, and working with foreign governments to harmonize and reduce regulation and other trade barriers. Mr. Gren has served in a variety of positions at the Department of Commerce, including as director of the Office of Microelectronic, Medical Equipment and Instrumentation and as senior policy adviser to the deputy assistant secretary for basic industries. He is the recipient of the Bronze Award, the International Trade Administration’s highest honor, and the Department of Commerce’s Silver Award.

Sonali Korde is the senior technical malaria adviser in the Bureau on Global Health on the President’s Malaria Initiative for the U.S. Agency for International Development (USAID). She is responsible for overseeing the initiative’s procurement and distribution of antimalarial medicines, rapid diagnostic tests, and insecticide-treated nets, and she also supports its Tanzania and Kenya programs. Prior to this, Ms. Korde was a private sector/sustainable health adviser in USAID’s Asia Near East Bureau and served as a manager in the Emerging Markets Group of Deloitte & Touche.

Scott LaGanga is executive director of the Partnership for Safe Medicines, a collaboration of more than fifty organizations dedicated to combating counterfeit and contraband medicines around the world. He is also senior director of Alliances, Affordability and Access at the Pharmaceutical Research and Manufacturers of America, a trade association of leading U.S. pharmaceutical research and biotechnology companies. Before this, Mr. LaGanga was executive director and cofounder of the Property Rights Alliance, where he helped launch the International Property Rights Index, which assesses seventy countries according to their efforts to protect physical property, intellectual property, and the rule of law.

Patrick Lukulay is the director of drug quality and information at U.S. Pharmacopeia, the official NGO responsible for setting quality standards for all medicines manufactured in the United States. Prior to this, he was a senior principal scientist for analytical research and development at Pfizer and a senior research scientist at Wyeth. Mr. Lukulay is a member of the American Chemical Society and the Roll Back Malaria Procurement and Supply Chain Management work group.

Michael Miller is founder and director of Navigator Strategies, a global health and development consulting firm. Before this, he was senior adviser to U.S. secretary of health and human services Michael Leavitt, where he helped launch the permanent U.S. Food and Drug Administration offices in China, India, and the European Union. Mr. Miller has also served as deputy assistant administrator for global health at the U.S. Agency for International Development, where he helped design and launch the landmark President’s Malaria Initiative, and as a member of the National Security Council. He has twice served on the U.S. delegation to the World Health Assembly and was a board member of Roll Back Malaria.    

Paul Orhii is director general of the National Agency for Food and Drug Administration and Control  in Nigeria. Mr. Orhii is a physician and an attorney by training and has taught pharmacology at the University of Jos, Nigeria, and the University of Texas Health Science Center at San Antonio. He was a biomedical scientist at the center for nearly twenty years and has authored or coauthored more than twenty peer-reviewed scientific publications. 

Richard Tren is a founder and the director of the health policy and advocacy group Africa Fighting Malaria (AFM), which has offices in South Africa and the United States. AFM is one of the few malaria advocacy groups that promotes the increased use of indoor spraying of insecticides for malaria control and has advocated for more random testing of pharmaceuticals in the developing world. Mr. Tren is an economist and has researched and written widely on health and development, with a particular focus on malaria and other communicable diseases. He is a council member of the Free Market Foundation of Southern Africa.

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