PHA-Exchange> U.S. Prescription Drug System Under Attack

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From: <j.salmon at comcast.net>

>  U.S. Prescription Drug System Under Attack
>  By Gilbert M. Gaul and Mary Pat Flaherty
>
>   For half a century Americans could boast of the world's safest, most
tightly
> regulated system for distributing prescription drugs. But now that system
is
> undercut by a     growing illegal trade in pharmaceuticals, fed by
criminal
> profiteers, unscrupulous wholesalers, rogue Internet sites and foreign
> pharmacies.
>
>  In the past few years, middlemen have siphoned off growing numbers of
popular
> and lifesaving drugs and diverted them into a multibillion-dollar shadow
market.
> Crooks have introduced counterfeit pharmaceuticals into the mainstream
drug
> chain. Fast-moving operators have hawked millions of doses of narcotics
over the
> Internet.
>
>  The result too often is pharmaceutical roulette for millions of
unsuspecting
> Americans. Cancer patients receive watered-down drugs. Teenagers overdose
on
> narcotics ordered online. AIDS clinics get fake HIV medicines.
>
>
>  The shadow market exploits gaps in state and federal regulations to
corrupt
> this system, creating a wide-open drug bazaar that endangers public
health. A
> yearlong investigation by The Washington Post has found:
>
>  . Networks of middlemen, felons and other opportunists operating out of
> storefronts and garages fraudulently obtain deeply discounted medicines
intended
> for nursing homes and hospices. The diverters have stored drugs in U-Hauls
and
> car trunks in blazing heat, stuffed them in plastic sandwich bags and
traded
> them in a daisy chain of transactions with no purpose except to enrich the
> traders. Those drugs are ultimately sold to unwitting patients.
>
>  . The diverters pave the way for counterfeiters who use pill-punching
machines
> and special inks to produce near-perfect copies of the most popular and
> expensive drugs. Some fakes have passed undetected through wholesalers to
the
> shelves of retail pharmacies.
>
>  . Pharmaceutical peddlers take advantage of lax regulations to move
millions of
> prescription drugs into the United States from Canada, Mexico and
elsewhere.
> Overwhelmed customs workers inspect less than 1 percent of an estimated 2
> million packages containing medicine shipped into the country each year.
> Virtually all of those shipments are illegal, yet the Food and Drug
> Administration fails to enforce its own import regulations, saying it
lacks the
> resources to intercept the illegal packages.
>
>  . Rogue medical merchants set up Internet pharmacies that serve as
pipelines
> for narcotics, selling to drug abusers and others who never see doctors in
> person or undergo tests.
> Scores of customers have become addicted, overdosed or died.
>
>  The shadow market, which includes both legal and illegal operators, has
grown
> rapidly yet received little public attention.
>
>  Isolated problems nationwide have attracted the interest of some state
and
> federal prosecutors and resulted in lawsuits. But the increasing recalls
of
> tainted medicines, overdoses on Internet-bought drugs and cross-border
> pharmaceutical trade are part of a larger pattern. Taken together, the
worst
> elements of the shadow market constitute a new form of organized crime
that now
> threatens public health.
>
>  The shadow market takes advantage of technology, global trade, vast
disparities
> in pharmaceutical prices, the explosive growth of enticing new miracle
drugs and
> the self-medicating habits of an aging baby-boom population. It extends
from
> small, backroom operations to buck-raking Internet pharmacies to the
warehouses
> of the nation's largest drug distributors.
>
>  Diverters reap millions illegally by buying drugs at a discount to sell
to
> secondary wholesalers. In
> some cases, the drugs have turned out to be diverted, diluted or
counterfeited.
>
>  The growth of the shadow market comes as Americans are spending more
money than
> ever on prescription drugs. Between 1994 and 2001, the number of
prescriptions
> swelled to 3.1 billion -- a nearly 50 percent increase. In nearly the same
> period, sales soared from $61 billion to $155 billion.
>
>  Often, fraudulent closed-door pharmacies consist of little more than a
desk, a
> fax machine and a few shelves. Yet they place excessively large orders
with drug
> manufacturers.
>
>  The diverters take the discounted drugs, mark up the prices and rapidly
move
> them to small wholesalers who add another markup and sell to other
wholesalers.
> In some cases, pharmaceuticals may change hands six or more times, going
from
> state to state.
>
>   No one knows how big the drug diversion market is. State and federal
> investigators say losses easily amount to billions of dollars annually.
>
>  Many Licenses, Few Inspectors
>   Existing laws and regulations present few barriers to entry into the
wholesale
> drug market.
>
>  It can be harder to become licensed as a beautician than as a
pharmaceutical
> distributor.
>  "The problem is, just about anybody can get a license. >  Nationwide,
there are an estimated 6,500 small wholesalers, yet most states
> have only a handful of inspectors. In some states, amusement park rides,
> elevators and even dog kennels are inspected more frequently than drug
> wholesalers.
>  In 1988, Congress attempted to stop diverters by passing  the
Prescription Drug
> Marketing Act. The law required that wholesalers provide a piece of
paper --
> similar to a car title -- disclosing all prior sales. The paper trail,
known as
> a pedigree, would allow each wholesaler to verify they were buying from
> reputable sources.
>
>  But wholesalers objected to what they deemed to be burdensome paperwork
and
> said the new law would drive some smaller wholesalers out of business.
>