Stricter Licensing and Tracking System Among Steps Needed to Counter Threats of Fake or Substandard Medications

Stricter Licensing and Tracking System Among Steps Needed to Counter Threats of Fake or Substandard Medications

WASHINGTON -- No country acting alone can protect its citizens against the health risks posed by illegitimate medications, and reducing this problem requires international cooperation, says a new report from the Institute of Medicine.  The report calls for global agreement on an international code of practice on drug quality.  It also recommends establishing a mandatory drug tracking system and tightening the licensing requirements on medication wholesalers in the United States.

Medicines often contain multiple ingredients that can come from more than one country, noted the committee that wrote the report.  Substandard medications containing little or no active ingredients hasten drug resistance, do not treat disease, and increase the costs of health care.  In addition, products that contain dangerous ingredients have sickened and killed people around the world.  Fake versions of the cancer drug Avastin were given to unsuspecting American patients in 2011 and 2012, for example, and similar problems occur even more frequently in poor countries, the committee found.

"Given the international nature of modern manufacturing and trade, every nation has a stake and a role to play in ensuring the production and sale of high-quality medications," said committee chair Lawrence O. Gostin, O'Neill Professor of Global Health Law, Georgetown University Law Center, and director, World Health Organization (WHO) Collaborating Center on Public Health Law and Human Rights, Washington, D.C.  "Falsified and substandard medicines are a grave public health problem because they are ineffective, promote drug resistance, and even cause severe illness and death, particularly in developing countries where they regularly flood the market.  We're calling on WHO, in collaboration with regulators, companies, and civil society worldwide, to adopt a global code of practice, build national regulatory capabilities, and promote international cooperation."

WHO should lead the effort to develop a code of practice that includes guidelines on surveillance, regulation, and law enforcement, the report says.  Similar codes on the marketing of breast milk substitutes and the recruitment of health workers have been effective in tackling problems of global consequence, the committee noted.

The report also recommends global adoption of the terms "substandard" and "falsified" to refer to products that pose a public health risk and urges all parties to refrain from using the term "counterfeit" except when specifically referring to trademark infringement.  The overlap of legal trademark issues and public safety risks has made it hard for authorities to tackle either problem.  Despite its broad use, "counterfeit" has a strict definition in patent law.  Consistent use of terms would improve nations' abilities to document the extent of the problem, determine causes, and discuss possible solutions.

The committee offered several recommendations to plug holes in the distribution chain and improve regulatory oversight.  Medicines make their way through complex channels of primary and secondary wholesalers and retailers, and every step affords opportunities for falsified and substandard products to infiltrate the market.

Secondary wholesalers are the weakest point in the U.S. drug distribution chain, the committee concluded.  All state licensing boards should license only wholesalers and distributors that meet the accreditation standards of the National Association of Boards of Pharmacy (NABP), the report says.  In addition, the state boards should collaborate with the U.S. Food and Drug Administration to create a public database where states should report violations and license suspensions and cancellations.  Although some states already set high accreditation standards, wholesalers engaged in questionable practices can easily work in states with lower standards.

"What we're seeing in the United States -- and doubly so in developing countries -- is a race to the bottom," Gostin said.  "Unscrupulous drug suppliers seek the state or country with the weakest regulatory and law enforcement standards.  We need to encourage a status competition for the finest regulatory oversight."

More stringent licensing requirements can improve the wholesale system, but drugs often circulate outside main distribution channels in rich and poor countries alike.  To reduce opportunities for drugs to be diverted, Congress should authorize FDA to establish a mandatory track-and-trace system that gives each product a unique identifier, enabling it to be followed through every transaction.  Congress also should allocate the funds necessary to implement this system given that the agency's resources are already stretched thin.

Acceptance of a federally mandated tracking system has been delayed by the costs associated with changing drugs' primary packaging and labels as well as wholesale repackaging, the report notes.  Without a national system, however, companies face the burden of meeting competing state demands.  For example, California will require unique serial numbers on bottles and vials by 2015.

The International Finance Corporation and the Overseas Private Investment Corporation should create ways to finance drug manufacturers in developing countries that want to upgrade to international manufacturing standards, the report says.  Following good manufacturing practices is expensive, and little capital is available to small and medium-sized businesses in low- and middle-income nations.  With their experience in economic development and international lending, these organizations are well-positioned to boost the capacity and quality of drug manufacturing in developing countries, the committee said.  Their initial investments should spur governments to encourage partnerships with foreign manufacturers.

Online pharmacies are particularly problematic as a source of illegitimate medications, especially as people unable to afford expensive drugs seek lower-cost options.  NABP's Verified Internet Pharmacy Practice Sites accreditation program should be more widely promoted as a useful tool that can help consumers purchase only through sites operating legitimately, the report says.  Because unscrupulous sites can mimic the appearance of legitimate sites, all countries -- especially low-income nations -- should develop ways to increase consumer awareness of the risks of buying medications from unverified Internet sites and other unreliable sellers.  The committee could not identify additional new regulations or other enforcement actions that would be both feasible and effective in controlling Internet drug sales.

The study was sponsored by the Food and Drug Administration.  Established in 1970 under the charter of the National Academy of Sciences, the Institute of Medicine provides objective, evidence-based advice to policymakers, health professionals, the private sector, and the public.  The Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council together make up the private, nonprofit National Academies.  For more information, visit or  A committee roster follows.

Christine Stencel, Senior Media Relations Officer
Shaquanna Shields, Media Relations Assistant
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