Roche says specialty distributors can better protect supply chain from counterfeiters

Counterfeiters managed to get fakes of some of Roche's ($RHHBY) top-selling cancer drugs, including Herceptin and MabThera/Rituxan, into the European market this summer. This, among other issues, has motivated Roche's Genentech to have specialty distributors handle these recently counterfeited drugs, as well as Avastin. This decision has outraged some hospitals.

"Recent experiences, such as counterfeit issues, have informed our viewpoint that the specialty distribution model is the most appropriate distribution model for all our infused cancer medicines," spokeswoman Charlotte Arnold told FiercePharmaManufacturing in an email. "We believe a distribution network with fewer distribution centers will allow Genentech to more effectively monitor for counterfeit products."

Genentech informed customers of the change in a Sept. 16 letter. Just the week before, Roche had learned that counterfeit vials of MabThera had been found in Germany. MabThera, sold as Rituxan in the U.S., is Roche's best-selling drug and the best-selling cancer drug in the world, with 2013 revenues of $7.78 billion. Roche said the counterfeit was detected in Germany by a German parallel importer. Roche said it had distributed the batch to wholesalers in Romania but once it "reached the wholesaler network, Roche has neither further control nor knowledge of the events that may have transpired."

That incident had followed the discovery in Europe of counterfeit and diluted vials of Herceptin that had been stolen from hospitals in Italy. In 2012, the FDA found that fraudulent versions of Roche's cancer treatment Avastin had been sold to physician practices throughout the U.S.

Arnold said the move did not spring directly from those incidents. "However, as you note, in the U.S., Avastin has been targeted by people acting outside of the legitimate supply chain. While these illegal activities did not affect the hospital supply chain, we have been focused on enhancing our overall supply chain security." She pointed out that three others of its drugs, the breast cancer treatments Perjeta and Kadcyla, and the leukemia drug Gazyva, were handled by the same distribution model, "so that all 6 of our infused cancer medicines will be distributed through specialty distribution."

According to the company, this is one of a number of steps it takes to focus on patient safety. In a statement, Roche said that it also uses special packaging and printing techniques to deter counterfeiters and make fakes easier to spot. It is also working on a system to track and trace drugs as they move through distribution channels.

Some hospitals in the U.S. are decrying the move because they will not get the same discounts from the specialty distribution networks that they enjoy from the existing one. During a conference call to publicize their concern, Steve Rough, director of pharmacy at University of Wisconsin Hospital and Clinics, said his facility already spends $11.6 million a year on the three drugs. The supply chain change will add $500,000, a 4.3% increase.

- here's Genentech's statement