The threat of substandard drugs

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    Phake: The Deadly World of Falsified and Substandard Medicines
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Article Highlights

  • In 2010, the government learned of 211 cases of drug shortages; in the first quarter of 2011 alone, 89 incidents were reported

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  • The U.S. imports well over $1 billion of Chinese chemicals every year

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  • The cutthroat pricing of generic drugs means the problem of fakes probably affects generics more than brand names

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In the past few months, fake cancer drugs have been found in clinics from California to Illinois. These fakes, which probably originated in China, were traded by numerous Middle Eastern and European traders, all of whom claimed they had no idea the products were fake. The U.S. Food and Drug Administration is investigating.

But a more subtle and probably greater danger is that some drugs that make it to the U.S. legally simply do not work. All companies make mistakes and occasionally release drugs that don’t work properly. Sometimes negligence is the cause; witness the recent problems at the Puerto Rico plant of the large drug company GSK, which resulted in a $500 million fine. But more often than not, errors are not negligent, just unfortunate, and companies spot problems before the products reach patients.

Yet with drug prices rising, and with hospitals and clinics unable to secure adequate stock of many life-saving medicines, more ingredients are being imported every year — 80 percent at the last count. There are increasing concerns about the quality of these chemicals.

Drug shortages are one result of bad chemicals. In 2010, the government learned of 211 cases of drug shortages; in the first quarter of 2011 alone, 89 incidents were reported. These problems are not limited to the U.S., either — after Panpharma unearthed problems in its supply chain in 2010, pharmacies across the European Union were unable to purchase anti-tuberculosis drugs for several months.

But not all bad ingredients are discovered before they make it into medicine cabinets. To understand why this can happen, even with the final drugs made by the better-known drug companies, it is important to understand how drugs are made.

Most drugs are made from relatively basic chemical ingredients. These ingredients are made by various firms and traded by intermediaries, often in numerous countries, before they are formulated into the finished product by a manufacturer.

While this convoluted process may improve efficiency, it makes it very difficult for some manufacturers to trace the origin of specific ingredients. These problems are particularly acute for ingredients sold in China, and the U.S. imports well over a billion dollars of Chinese chemicals every year. Several pharmaceutical-industry experts in China privately admit that up to a quarter of ingredients purchased by Western companies come from unknown sources. Philippe Andre, a European pharmaceutical specialist based in China, asserts that 39 percent of chemicals from plants he has audited have unknown origins. Chinese chemical companies often give their customers only the address of their head office, not the addresses of their physical plants, which makes monitoring ingredients difficult and conducting detailed audits all but impossible. Chemicals can pass through several such plants before they arrive at the final plant that Western companies may inspect.

Several pharmaceutical-industry experts in China privately admit that up to a quarter of ingredients purchased by Western companies come from unknown sources. Quality testing by companies provides a degree of protection, as do FDA inspections (of the plants they know about). But the FDA cannot have unfettered access in China; the agency often has to arrange meetings weeks in advance. And while some things are easy to assess after the fact, such as whether a chemical includes the proper amount of a key ingredient, many problems are close to impossible to find. As former secretary of health and human services Michael Leavitt explained: “We cannot inspect our way to safety.” For example, if the production line making an ingredient is not cleaned properly in between processes, a contaminant may slip in, and it might not be found during standard testing.

When Leavitt was secretary of health and human services, he oversaw the worst imported-drug problem in recent years. The moderately strict medicine screening in place in 2007 failed to spot contaminated Heparin that killed 149 Americans. Luckily, the companies involved quickly identified the problem.

Of course inspections are important, and they catch some problems. But simply demanding FDA inspections and more paperwork, as much pending congressional legislation does, would increase costs, slow imports, and find only the most obvious problems.

As health care costs rise, some manufacturers are probably cutting corners in their chemical procurement to remain competitive. The cutthroat pricing of generics means this problem probably affects generics more than brand-name drugs.

The only long-run solution is for our chemical sources, notably those in China, to improve their practices. And we can and should help. We can help educate and work more effectively with our Chinese partners to inculcate better systems and less corner cutting. Private industry and the U.S. Commerce Department are involved in programs to do so already.
The first step to prevent quality problems is for the industry to certify each step of production.
The first step to prevent quality problems is for the industry to certify each step of production. The Western industry-led initiative RX-360 is attempting to overhaul outdated practices and improve all forms of surveillance and cooperation. Chinese companies make the cheapest chemicals in the world, but some are undoubtedly substandard.

Knowing where all our ingredients come from is the first step toward improving drug quality. Simply complaining about Chinese plants or demanding more FDA visits will not fix the problem.

— Roger Bate is a resident scholar at the American Enterprise Institute. His book Phake: The Deadly World of Falsified and Substandard Medicine will be published next week.

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