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Prepared Witness Testimony The House Committee on Energy and Commerce
A System Overwhelmed: The Avalanche of Imported, Counterfeit, and Unapproved Drugs into the U.S.
Subcommittee on Oversight and Investigations
Dr. Cesar Arias R.Ph.
Good morning my name is Cesar Arias. I want to thank the committee for the honor to speak about prescription drug diversion activities and counterfeit drugs, which were recently uncovered in Florida. As a registered pharmacist employed by the State of Florida Department of Health as a Drug Inspector Supervisor in the Miami area for 16 years, I have witnessed the growth of pharmaceutical drug diversion over the span of my career, and increased drug counterfeiting over the last two years. This is not the same job I had 16 years ago. When I started on the job, the primary force behind pharmaceutical drug diversion was the different prices charged for the same drug by the pharmaceutical manufacturers to the different classes of trade. That is still a major cause for diversion, but today there are many other sources for diverted drugs including foreign drugs, stolen drugs, drugs purchased from street brokers, and even counterfeit drugs. The street broker is an unregulated individual, who has no clue how to handle or store these temperature-sensitive products. The integrity of the drugs acquired through these channels is clearly a public health concern because there is no guarantee as to the drug's quality or stability. There is no way to know under what conditions they have been stored or handled. These brokers funnel huge amounts of diverted drugs from the streets of South Florida back into the drug distribution system¾not just in Florida, but also throughout the nation. I was involved in one investigation involving drugs purchased off the streets where a wholesaler in Ft. Lauderdale sold over $1 million in Neupogen for treating HIV to one of the largest wholesaler in the nation in a six-month period. All of the Neupogen had come from the streets of Miami via two unlicensed street brokers who would store this temperature sensitive injectable drug¾requiring refrigeration¾at above 90 degrees, for hours at a time, in the trunks of their cars. Our office is currently working cases as part of a Task Force, which is overseen by the Attorney General's Office of Statewide Prosecution. The Task Force includes the Florida Department of Law Enforcement (FDLE), Medicaid Fraud Control Unit of the Attorney General's Office and the Miami-Dade Police Department. During the last year and a half, the task forces joint efforts have resulted in identifying 11 different organizations, which the Task Force is currently investigating. These organizations, or cells, are responsible for the diversion of an estimated $250 million a year in pharmaceuticals just in Florida. These cases involved numerous types of prescription drug diversion including cargo thefts, burglaries, smuggling of foreign made drugs and the diversion of specially priced drugs sold to specialty physicians. Some of these cells have perfected schemes, which involve the opening of shell corporations in other states (about 20). These companies obtain wholesale licenses for the sole purpose of creating false pedigree papers. The shell companies allow these folks to fool other states' officials and the ultimate customers to believe that the drugs have been obtained from legitimate wholesalers when in fact the drugs come from the streets of South Florida It was through the efforts of the Task Force that the presence of counterfeit Epogen and Procrit, was detected in the nations drug supply. This was the direct result of an undercover purchase of 100 boxes of counterfeit Epogen by a Florida Department of Law Enforcement agent. The importance of the pedigree was made evident in this case. When the purchase of the Epogen was made, the investigators had no clue, even after examining the boxes, that the injectable products were counterfeit. What we knew was that the pedigree was false and therefore we had diverted product. Only after we submitted some of the boxes to the manufacturer and FDA did we learn that they were counterfeit. Up until that moment in April of 2002 neither the FDA nor Amgen, the manufacturer were aware that there was a problem with counterfeit Epogen. Subsequently our investigation discovered that up to 110,000 doses of Epogen 2000 Units strength had been relabeled and converted to Epogen and Procrit 40,000 Units strength. In effect, 25,000 patients received a one-month supply of diluted drugs¾1/20th of the required strength. Due to Florida's intervention and information sharing, the FDA's Office of Criminal Investigations (OCI) and the Texas authorities seized large amounts of counterfeit Epogen at a national wholesaler in Kentucky, and Procrit at a second national wholesaler respectively. Through the efforts of the Task Force, we have been able to shut down about a dozen wholesalers in Florida and have alerted various other states to assist them in shutting down others. The Task Force¾through the efforts of FDLE¾has shared information with FDA's OCI, which have followed up in other states and conducted search warrants, collecting evidence to make criminal cases. It was through the evidence collected by the Task Force and shared with OCI that led to the recent seizures and recalls made of the counterfeit Lipitor found in a Nebraska re-packer (Med-Pro) and a Kansas City wholesaler (Albers Medical). In each instance in which counterfeits or diverted drugs have made their way into the mainstream distribution system it has been through a dishonest wholesaler. Once the drugs enter the system they can end up in any pharmacy in the nation. That is why there is no patient in the nation that can know with 100% certainty that the drugs they are getting are what they are purported to be¾or if they are¾that they have not been in the trunk of someone's car, or sitting in a hot warehouse or a crackhouse in South Florida. The work of the Task Force has exposed the tremendous problem that we are experiencing in Florida with drug diversion and counterfeiting. The law recently signed by Governor Jeb Bush, Florida's Prescription Drug Protection Act increases penalties, requires a new standard for wholesale licensing, strengthens the pedigree paper requirement. People throughout Florida rely on the safety of our pharmaceutical supplies, and our efforts to protect them. Hopefully, Florida's efforts will be a model for the rest of the nation. Thank you for allowing me to bring this matter to your attention.
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