Counterfeit Medicine

John R. WrightRogers Mantese & Associates, P.C.

&Gregory M. Nowakowski

Honigman Miller Schwartz & Cohn LLP

Two of these pills are LIPITOR® manufactured by PFIZER®.

The other two are not. Can you tell which is which?

What is the problem?

“During 2013, authorities from 49 countries seized more than 11.8 million tablets, capsules and vials of counterfeit Pfizer

medicines.”

Manufacturing Regulations & Standards

Counterfeit Adderall®

Wrong ingredients

Ingredients Misspelled

“Aspartrte” instead of “Aspartate”

Actual Adderall®

How to Spot a Counterfeit

“A counterfeit medicine is one which is deliberately and fraudulently mislabeled with respect to identity and/or source. Counterfeiting can apply to both branded and generic products and counterfeit products may include products with the correct ingredients or with the wrong ingredients, without active ingredients, with insufficient (inadequate quantities of) active ingredient(s) or with fake packaging.”

World Health Organization Definition

“[A] controlled substance which, or the container or labeling of which, without authorization, bears the trademark, trade name, or other identifying mark, imprint, number, or device, or any likeness thereof, of a manufacturer, distributor, or dispenser other than the person or persons who in fact manufactured, distributed, or dispensed such substance and which thereby falsely purports or is represented to be the product of, or to have been distributed by, such other manufacturer, distributor, or dispenser.” 21 USC 802(7).

Federal Controlled Substances Act

“Counterfeit substance” means a controlled substance that, or the container or labeling of which, without authorization, bears the trademark, trade name or other identifying mark, imprint, number, or device, or any likeness thereof, of a manufacturer, distributor, or dispenser other than the person who in fact manufactured, distributed, or dispensed the substance.” MCL 333.7104(5).

Michigan Controlled Substances Act

Julio Cesar Cruz, 43, Cuban citizen living in Miami Sentence to 13 years and six months without parole Forfeited $2M to U.S. and paid $1.8M to Pfizer Illegally imported actual Lipitor intended for S. America Purchased raw materials, tooling and dies Manufactured counterfeit pills in Costa Rica Comingled the illegally imported pills with counterfeits Sent to various U.S. locations for repackaging Drugs made it into CVS and Rite Aid, sold on the internet Largest recall of counterfeit medication in history

Counterfeit Lipitor

Injectable medicine used to treat cancer February 2012 Sold to medical practices from foreign distributors Counterfeit version didn’t contain active ingredient Did contain corn starch and acetone Package contained Roche logo, not member company Genetech No shortage of Avastin at the time Second counterfeit version discovered year later in New York FDA sent letters to 134 doctors in 28 states (4 in MI, 57 in CA) that

purchased from foreign unlicensed suppliers Five US citizens, including three doctors, prosecuted

Counterfeit Avastin

International Corporate Headquarters in Barbados Wholesaler, Montana Healthcare Solutions,

Belgrade, Montana, USA Parent Company, Canada Drugs, Winnipeg,

Manitoba, Canada

Path of Counterfeit Avastin

Istanbul, Turkey

Zug, Switzerlan

d

Copenhagen,

Denmark

River East Supplies, Nottingham, U.K.

Volunteer Distributio

n, Gainesbor

o, Tennessee

, USA

FDA-Approved over-the-counter weight-loss drug First warning from FDA in January 2010 Counterfeit sold over the internet, not in retail stores Mostly sold on auction sites (e.g., eBay) Did not contain orlistat, instead contained sibutramine Three times the daily dose, twice the maximum dose Lead to elevated blood pressure, stroke, heart attack Also cause anxiety, nausea, insomnia, heart conditions

Counterfeit Alli

Counterfeit Alli Examples

National Association of Boards of Pharmacy (NABP) NABP reviewed over 10,000 websites selling RX drugs Found 97% non-compliant with standards and laws NABP publishes “Not Recommended Sites” Verified Internet Pharmacy Practice Sites (VIPPS) Verified-Accredited Wholesale Distributors (VAWD) MedWatch: FDA Safety Information and Adverse Event

Reporting Program

July 17, 2014: FedEx indicted for drug trafficking crimes, knowingly making deliveries for illegal online pharmacies

Online Pharmacies

Online (and brick-and-mortar) “Facilitators”

Example: National Rx Partners Create prescriptions pursuant to

online questionnaires Sought community pharmacies

to fill the prescriptions Collected fee from patient and

paid small fee to doctors and pharmacies

Online Pharmacy “Facilitators”

New gTLD “.pharmacy” Purpose to provide secure & trustworthy pharmacy websites gTLD = Generic Top-Level Domain (i.e. .com; .org; .gov; .edu) Domains are governed by ICANN New Domains (i.e. .doctor; .dentist; .hospital; .medical) NABP executed agreement with ICANN in June 2014 Expected to launch in Fall of 2014 Still needs to pass technical review process Will be sold through trusted domain name registrars More information at www.dotpharmacy.net

New .pharmacy gTLD

Personal importation is not permitted, unless… For the treatment of a serious condition Effective treatment not available in the U.S. Drug is not advertised or promoted in the U.S. No unreasonable risk Person importing the drug verifies that it is for personal use Also provides contact information for treating doctor, or Shows that it is for continuation of treatment started abroad Less than a 90-day supply of the drug is being imported

FDA Personal Importation Policy

Proposed Legislation Sens. John McCain (R-Ariz.) and Amy Klobuchar (D-Minn.) S. 2549 (113th Congress, 2013–2015) Safe and Affordable Drugs from Canada Act of 2014 Limit of 90-day supply Personal use only Licensed Canadian pharmacy and licensed pharmacist Currently, personal importation from abroad is illegal FDA has a “Personal Importation Policy” creating

exceptions

Safe and Affordable Drugs from Canada Act

U.S. Department of Homeland Security, Immigration & Customs Enforcement (ICE)

Clearinghouse for investigations into counterfeiting and piracy

Task force with 21 member agencies Investigation, Interdiction, Outreach, and Training

Trade Enforcement Coordination Center (TECC) Centers of Excellence and Expertise (CEE) Commercial Targeting and Analysis Center (CTAC) National Targeting Center – Investigations (NTC-I)

Digital/Online: Operation “In Our Sites”

National Intellectual Property Rights Coordination Center

Operation “In Our Sites”

Operation “Bitter Pill”: 686 Websites Seized in 2012

327 Ports of Entry in the U.S. 15 pre-clearance offices

Canada (9), Caribbean (4), Ireland (2)

Over 2,000 seizures in FY 2013 Nearly $82M MSRP Single Instance: April 18, 2013:

150K pills, $1.9M seized at JFK Airport

“Operation Apothecary”

Customs and Border Patrol

Organized by INTERPOL One week every year since 2008 Targets the Internet rather than any one region About 200 agencies from over 100 countries Over 10,000 websites, 19,000 advertisements taken

down 239 arrested, $36M seized, $9.4M worth of drugs Diet pills, cancer medication, ED drugs, cough and

cold medication, anti-malarial drugs, cholesterol medication and nutrition products

Additional investigations launched

Operation Pangea VII

“Except as authorized by this subchapter, it shall be unlawful for any person knowingly or intentionally . . . to create, distribute, or dispense, or possess with intent to distribute or dispense, a counterfeit substance.” 21 USC 841(a)(2).

“It shall be unlawful for any person knowingly or intentionally . . . to make, distribute, or possess any punch, die, plate, stone, or other thing designed to print, imprint, or reproduce the trademark, trade name, or other identifying mark, imprint, or device of another or any likeness of any of the foregoing upon any drug or container or labeling thereof so as to render such drug a counterfeit substance.” 21 USC 843(a)(5).

Federal Controlled Substances Act

Section 404 (a) A person may not knowingly or intentionally manufacture or deliver, or

possess with intent to manufacture or deliver, a controlled substance that, or the container or labeling of which, without authorization, bears the trademark, trade name, or other identifying mark, imprint, number, or device, or a likeness thereof, of a manufacturer, distributor, or dispenser, other than the person who manufactured, distributed, or dispensed the substance.

(b) A person may not knowingly or intentionally make or distribute or possess a punch, die, plate, stone, or other thing designed to print, imprint, or reproduce the trademark, trade name, or other identifying mark, imprint, or device of another or a likeness of any of the foregoing upon any drug or container or labeling of it without authorization.

(c) A person who violates this section is guilty of a crime and upon conviction may be imprisoned for not more than [ ], fined not more than [ ], or both.

Uniform Controlled Substances Act

Creating, manufacturing, delivering, or possessing with intent to deliver counterfeit substance intended for human consumption is a felony. MCL 333.7402. (Punishment depends on schedule of substance.)

Making, distributing, or possessing a punch, die, plate, stone, or other thing designed to print, imprint, or reproduce the trademark, trade name, or other identifying mark, imprint, or device of another or any likeness of any of the foregoing upon a drug or container or labeling thereof so as to render the drug a counterfeit substance is a felony. MCL 333.7407(e).

Michigan Controlled Substances Act

Owning, possessing, or using a vehicle, building, structure, place, or area that he or she knows or has reason to know is to be used as a location to manufacture a counterfeit substance is a felony. MCL 333.7401c(1)(a).

Own or possess any chemical or any laboratory equipment that he or she knows or has reason to know is to be used for the purpose of manufacturing a counterfeit substance is a felony. MCL 333.7401c(1)(b).

Provide any chemical or laboratory equipment to another person knowing or having reason to know that the other person intends to use that chemical or laboratory equipment for the purpose of manufacturing a counterfeit substance is a felony. MCL 333.7401c(1)(c).

Michigan Controlled Substances Act

Federal 18 USC § 2320

Trafficking in Counterfeit Goods or Services

State Michigan: MCL 750.263

Penal Code: Counterfeit Marks

Corresponding crimes Racketeering: 18 USC § 1961;MCL 750.159i

Related Counterfeit Crimes

Ryan Haight Online Pharmacy Consumer Protection Act of 2008

Compounding Quality Act of 2013 Food and Drug Administration Safety and Innovation Act

of 2012 FDA Industry Guidance on Drug Supply Chain Security of

2014 FDA Guidance on Drug Compounding of 2014

Legislative and Regulatory Updates

Ryan Haight was a 17-year-old boy Acquired prescription narcotics from the internet by

simply filling out a questionnaire A doctor, who never saw Haight wrote the prescription

and the drugs were mailed directly to his house On February 12, 2001, Haight overdosed on the

narcotic and died The result is the Ryan Haight Online Pharmacy

Consumer Protection Act of 2008

Who is Ryan Haight?

No controlled substance dispensed by means of internet without a “valid prescription”

Valid prescription is one issued for legitimate medical purpose, after one in-person medical evaluation or medical evaluation via telemedicine

On-line pharmacy excludes manufacturers or distributors and other non-pharmacy practitioners who are appropriately registered

Act also includes disclosure requirements Notice required to US Attorney General and applicable state board

or boards of pharmacy 30 days prior to any internet dispensing No private right of Action

Ryan Haight Online Pharmacy Consumer Protection Act of 2008

Make sure to have plenty of lead time prior to business owner’s desire to begin operations

Review policies and procedures for determining a “valid prescription” (one in-person visit or telemedicine)

Since telemedicine is defined by federal and state law, may need to determine states’ law for telemedicine to determine whether an appropriate evaluation was conducted

If operating by internet, confirm appropriate registrations, notices, and licenses are maintained (and/or obtained)

While there’s no private right of action under the Act, violations could be evidence used against a provider in litigation

Compliance Lessons from Online Pharmacy Act

Compounding is generally, the creation of a particular pharmaceutical product specialized to a patient’s needs

Governs multiple facets of drug compounding including: Facilities Labeling Drug pedigree requirements

Compounding Quality Act (2013)

If you are a pharmacy compounding drugs, pay careful attention to state and federal requirements

If negotiating the purchase of either compounded or other manufactured drugs, include appropriate pedigree disclosures, representations and warranties and allow termination if violated

Consider including indemnification for any issues arising from or attributable to a mischaracterized drug

Compliance Lessons from Compounding Act

Broad sweeping in scope, revises many aspects of drug administration an research related to drugs and devices

According to the FDA website, the Act’s reach is summarized as: Giving the authority to collect user fees from industry to

fund reviews of innovator drugs, medical devices, generic drugs and biosimilar biological products;

Promoting innovation to speed patient access to safe and effective products;

Increasing stakeholder involvement in FDA processes; and

Enhancing the safety of the drug supply chain.

Food and Drug Administration Safety Innovation Act (2012)

Other non-legislative guidance provides suggestions to comply with law Includes many non-binding but helpful forms and

policies FDA web-page contains extensive resources for

compliance

Other FDA Guidance

Entities or compliance officers who address these issues should be aware

Also critical to be aware of ever-developing and published guidance which address, probably, your circumstances or from which concepts may be modified to fit your needs

Lessons from FDA Act

Questions?

?

John R. WrightRogers Mantese & Associates, P.C.

Phone: (248) 702-6350Email: jwright@healthlex.com

Gregory M. NowakowskiHonigman Miller Schwartz and Cohn LLP

Phone: (313) 465-7502Email: gnowakowski@honigman.com

THANK YOU