At least some of the counterfeit Avastin found last month in the U.S. squeezed its way in through a Canadian pharmacy company that delivers discounted prescription drugs from overseas to U.S. citizens.
An investigation by regulators into the networks through which these drugs travel show how difficult it is becoming for pharmaceutical manufacturers to safeguard the drug supply chain (and their reputations) against assault by knockoffs and fakes that may be useless and could potentially be deadly. The owner of one Canadian Internet pharmacy acknowledged shipping at least some of the fake injectables into the U.S. but notified authorities when he learned they were counterfeit.
The counterfeit version of Roche's ($RHHBY) cancer treatment contained starch, salt, cleaning solvents and other chemicals but no API. While investigators still have not uncovered the source of the fake Avastin, China is considered a possibility, according to a story in The Wall Street Journal, which lays out the depth and breadth of the problem.
It is illegal to sell non-FDA approved drugs in the U.S. and it is illegal for citizens to buy them, but the price differentials that can result from another country's prices or even from exchange rates, make them very appealing. As a result, an extensive gray market has grown up around them that is hard to police and vulnerable to infiltration by fakes.
It also is illegal for doctors to buy drugs from outside the U.S. and then charge Medicare for their cost, but the fake Avastin that shipped into the U.S. had gone to doctor's clinics in three states.
It is hard for the industry, the FDA and other regulators to apply rules to the companies that are feeding the gray market. They are mostly located outside the U.S. and governed by other countries' laws, Bryan Liang, vice president of the Partnership for Safe Medicines, told the WSJ. "They're offshore. Sometimes you don't even know who they are," said Liang, who also is a professor at California Western School of Law. "This problem is getting worse, not better."