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GlobalData Release: Fake Avastin Reignites "Track-and-Trace" Debate, but the Clock is Ticking



6/13/2012 9:32:09 AM

LONDON, UK (GlobalData), 13 June 2012 - The US Food and Drug Administration (FDA) announced in February that counterfeit vials of Roche/Genentech’s cancer drug Avastin were sold to a number of medical practices across the country. While the exact sources of the phony drug remain a mystery, authorities traced the fake batch through several distributors throughout Canada, the UK, Denmark and Switzerland to only end up with an unlicensed supplier in the Middle East as the possible culprit. When tested, the phony batch did not contain any bevacizumab, the active ingredient in Avastin, which was substituted with salt and starch. Along with fake batch numbers, the drug packaging was also counterfeit, bearing Roche’s name and French labelling, contrasted to the authentic Avastin packaging which imprints Genentech’s name and has English labelling.

Making matters worse, in April the FDA issued a second warning that it had discovered a new batch of counterfeit Avastin circulating throughout the US, under the name Altuzan, the brand name for Avastin marketed in Turkey, which is not approved for use in the US. The FDA stated that nearly 50 physician practices in the US, mostly in California, had bought the fake Avastin from supplier Ban Dune Marketing, Inc. This was quite interesting, considering that authorities shut down the La Jolla-based distributor last August. The company’s founder and president, James Newcomb, was indicted by the US Attorney’s Office in St. Louis for selling counterfeit versions of Herceptin, Neupogen and Rituxan, other expensive cancer drugs. While that case didn’t specifically mention the sale of fake Avastin, these other counterfeit drugs that were shipped by Ban Dune had similar Turkish labelling, creating an obvious connection. Meanwhile, these other fake cancer drugs still remain in the supply chain. Genentech, Roche’s US subsidiary, has stated that it was unsure whether patients were administered the fake Avastin, and up to this point, the company has not received any reports of adverse side effects. While counterfeit drugs are nothing new to the industry, the case of fake Avastin implies a disturbing shift in this underground activity – from counterfeit pills of Viagra and Oxycodone, to fakes of expensive injectable cancer therapies. Not surprisingly, these reports have ignited reoccurring fears about the safety and traceability of the US drug supply. The timing couldn’t be more serendipitous. As news of the counterfeit Avastin broke, the bicameral US Congress is concurrently reconciling the reauthorization of the Prescription Drug User Fee (PDUFA) Act. If passed, the legislation will fund the FDA for another five years and will give the agency broader enforcement powers. The version which passed the U.S. House of Representatives would allow the FDA to inspect the manufacturing facilities of foreign companies, or reject their products if they refuse inspection. Also, the law would give the FDA the right to inspect these foreign companies’ active pharmaceutical ingredients and to block their importation if they fail to meet US standards. Most certainly, these powers will give the FDA added enforcement leverage, but for over a decade the agency has been pushing for more stringent drug tracking.

The FDA wants the PDUFA bill to include language requiring a more robust, nationwide system to “track-and-trace” individual units across the entire supply chain, from manufacturing facilities to pharmacies. However, the industry has continuously pushed back, stating that to meet such a requirement is unrealistic and too expensive. However, the window of opportunity is closing. The FDA only has until September to introduce such language as part of the PDUFA legislation. While a version of track and trace was to be included in the house bill, that language was not included in the Senate’s version of the bill. Any changes that are not introduced and approved by the conference committee between the two bodies will likely have to wait another five years for such an opportunity.

The current Prescription Drug Marketing Act of 1987 (PDMA) does prevent Americans from receiving counterfeit or expired drugs. However, the PDMA only put in place an initial framework of conditions, requiring that all medicines sold in the country must be marked with an ID number that shows dosage and name. This requirement is essentially useless, because it says nothing about the drug’s pedigree - who or which distributor sold the drug and to whom, where it went or how long it took to get there. Due to the inadequacy of the PDMA, many states had to adopt stricter drug tracking laws. In 2004, the California State Legislature passed SB-1307, referred to as the ‘California e-Pedigree Law’, as an attempt to prevent counterfeit medicines from entering the supply chain in California. The law requires the distribution history and the location of every medicine pack in the supply chain to be determinable in real time through a barcode or RFID chip. This chain-of-custody would trace information including the drug’s description, place of origin and expiration, as well as each sale or trade along with the dates of the transactions, and the names and addresses of all parties involved. While many other states have passed their own drug pedigree laws, only California’s law is enacted at the unit-level. However, incessant pressure from industry, the California Board of Pharmacy, the regulator tapped for enforcing SB-1307, delayed implementation three times, citing that the law was overly burdensome and that the industry needed more time to comply. SB-1307 is expected to go into effect in 2015, escalating fears in the industry that other states will adopt similarly strict drug tracking laws. This may lead to a disparate patchwork of requirements with no uniformity across state lines. However, California’s e-Pedigree law does include a provision allowing it to be superseded by federal law – opening the door for lobbying groups to push alternative approaches. One coalition, the Pharmaceutical Distribution Security Alliance or PDSA, is promoting a counterproposal to the ‘track-and-trace’ language at the unit-level that the FDA wants included in the PDUFA legislation. The group is promoting the Pharmaceutical Traceability Enhancement Code (RxTEC) Act, legislation which would give the federal government the power to track drugs in “lots” only when they reach distributors. However, this proposal is inherently flawed, because it does not include real-time, mandatory drug verification as the product moves through every step in the supply chain. Only unit-level tracking would provide the necessary granularity allowing regulatory and enforcement bodies to validate the serial numbers of suspect drugs, trace them back to their source of origin, and prevent patient exposure in the first place.

Time is running out for the government to pass unit-level traceability of the nation’s drug supply. It remains unsure that a unit-level system would effectively prevent all counterfeit drugs from entering the US market. Indeed, such a system would not prevent doctors and patients who wanted to buy drugs from unlicensed distributors outside the legal supply chain or from online pharmacies. Moreover, RFID and barcoding can be circumvented – the retail industry has been using RFID tags for decades, yet counterfeit apparel still remains rampant. However, the adoption of a unit-level system would have, at the very least, sounded the alarm much earlier when a licensed distributor in the US tried to scan a drug from an unknown supplier in the Middle East. The PDSA contends that RxTEC is a tenable, interim position that would improve the traceability of drugs without being too costly to implement. But, the RxTEC proposal has a provisional compliance date of 2020, a longer timeline which might not sit well with US lawmakers in light of the counterfeit Avastin reaching patients in recent weeks.

*Fake Avastin Reignites “Track-and-Trace” Debate, but the Clock is Ticking

This expert insight was written by GlobalData analyst for healthcare industry dynamics, Adam M. Dion. If you would like an analyst comment or to arrange an interview, please contact us on the details below.

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GlobalData is a leading global business intelligence provider offering advanced analytics to help clients make better, more informed decisions every day. Our research and analysis is based on the expert knowledge of over 700 qualified business analysts and 25,000 interviews conducted with industry insiders every year, enabling us to offer the most relevant, reliable and actionable strategic business intelligence available for a wide range of industries.


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