After Heparin: Protecting Consumers from the Risks of Substandard and Counterfeit Drugs

Pharmaceutical CommercePharmaceutical Commerce - July/August 2011

Industry and FDA can—and must—do more to protect global pharmaceutical supply chains

Pharmaceutical manufacturers and distributors work together in a robust system to deliver high-quality products, but drug manufacturing and distribution have become increasingly complex in recent years. Prescription and over-the-counter (OTC) medications originate in factories all over the world, moving into the American marketplace through supply chains that can involve numerous processing plants, manufacturers, suppliers, brokers, packagers and distributors.

The number of drug products made outside of the United States doubled from 2001 to 2008, according to FDA estimates. The FDA estimates that up to 40 percent of finished drugs used by U.S. patients is manufactured abroad, and 80 percent of active ingredients and bulk chemicals used in U.S. drugs comes from foreign countries. Increasingly, the United States relies on drug manufacturing in developing countries—mainly China and India. Globalization, increased outsourcing of manufacturing, the complexity of pharmaceutical distribution and the existence of criminal actors willing to capitalize on supply chain weaknesses has created the potential for counterfeit or substandard medicines to enter the system and reach patients …

This report* concludes that more can—and must—be done to ensure the safety of “upstream” pharmaceutical manufacturing, to provide the FDA with essential authorities and resources to exercise effective oversight and to improve the security of “downstream” pharmaceutical distribution.

In a world where drug manufacturing is increasingly outsourced and offshored, robust supply chain management is critical. Pharmaceutical companies have the ultimate responsibility for drug quality and safety, but some companies may not be adequately verifying the quality of their suppliers. … It is essential that manufacturers look beyond current manufacturing quality standards (known as good manufacturing practices, or GMPs) in their own facilities to ensure appropriate supplier qualification, through risk-based assessments, quality agreements and physical audits, where appropriate.

… Improved oversight of foreign manufacturing is essential and will require increased resources for the FDA, some of which could be obtained through industry fees. In addition, the agency will have to make additional use of third-party inspections, including those by other regulators and, potentially, private entities.

The FDA also requires certain new authorities to enable effective oversight and must more effectively use its existing authorities and resources. The agency should have the power to mandate recalls, subpoena witnesses and documents and destroy at the border any products that present public safety risks. In the long term, ameliorating risks to the U.S. and global drug supply requires international cooperation, harmonization of standards and steps to improve the capacity of regulatory bodies in the developing countries where manufacturing increasingly takes place.

The movement of finished drugs from manufacturer to the consumer is also a complex process involving many intermediate players. The past decade has seen several instances of adulterated and counterfeit drugs infiltrating U.S. distribution. …

Manufacturers, wholesalers and pharmacies have taken steps to secure the distribution pipeline, but risks persist. No national system exists for tracing the provenance of finished drugs as they are bought and sold. Requirements for drug pedigrees and wholesaler licensure vary widely among states. Drug distribution tracking and regulation must be improved; methods of documenting the movement of drugs at the individual package level have been attracting support, and a universal system should be implemented. …

This report makes the following key policy recommendations:

Ensure meaningful oversight and quality management of globalized pharmaceutical manufacturing

• Require 21st-century quality systems to protect drug safety through statute and regulation

• Strengthen industry oversight of contract manufacturers and suppliers

• Enhance documentation and transparency of upstream manufacturing supply chains through legal requirements

• Improve testing standards

Eliminate barriers to FDA oversight

• Increase FDA oversight of overseas


• Ensure adequate FDA resources

• Improve the FDA’s infrastructure and tracking systems

• Strengthen oversight of drugs and bulk drug substances at import

• Empower the FDA with regulatory authorities it needs to fulfill its mission

• Strengthen the FDA’s enforcement ability through stronger penalties and clearer accountability for industry

• Improve FDA access to information from other regulatory bodies and industry

Secure pharmaceutical distribution

• Improve drug distribution security through a federal serialization and

verification system

• Strengthen wholesaler regulation and oversight.

*This article is excerpted from the Pew Prescription Project report of this name; the full report is available at


Alan Coukell is director of medical programs, Pew Health Group (Washington, DC), of which the Pew Prescription Project is a part.

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