Committee Correspondence

The House Committee on Energy and Commerce

Tauzin, Greenwood Expand Probe Into Illicit Internet Pharmacies

January 15, 2004

Mr. Sidney Taurel
Chairman, President & Chief Executive Officer
Eli Lilly & Company
Lilly Corporate Center
Indianapolis, Indiana 46285

Dear Mr. Taurel:

As part of its continuing oversight of the problems of counterfeit drugs, Internet pharmacies, and imported drugs, the Committee is examining efforts by pharmaceutical companies to prevent diversion and counterfeiting of their products, including those products that may have been counterfeited or diverted to illicit Internet pharmacies. We note that Johnson & Johnson disclosed a plan in early December to require distributors and wholesalers to purchase its prescription drugs directly from the company in an effort to stop counterfeit drugs from entering the market. As the Wall Street Journal reported, Johnson & Johnson became "the first major company to openly take action to block a trapdoor counterfeiters have exploited to slip knockoffs into the nation's supply of medical products." Pfizer Inc. has now followed suit, instituting a similar plan as of December 19, 2003, and according to the Boston Globe's article of January 5, 2004, GlaxoSmithKline has pursued some security measures as well, including the possibility of tracking its pill bottles electronically.

The Washington Post in a recent series of articles reported on the widespread problems with pharmaceutical distribution. As the Washington Post noted, the U.S. regulatory system for distributing prescription drugs "is undercut by a growing illegal trade in pharmaceuticals, fed by criminal profiteers, unscrupulous wholesalers, rogue Internet sites and foreign pharmacies." The result of this multi-billion dollar shadow market has been that U.S. public health is endangered because of the introduction of counterfeit, unapproved, substandard, or adulterated drugs into the America's medicine supply.

In light of the public health concerns and ongoing efforts by companies such as Johnson & Johnson, the Committee seeks information from pharmaceutical companies known to have drugs targeted by counterfeiters about each company's anti-counterfeiting and anti-diversion efforts. We are interested in any ongoing efforts or plans by your company to prevent counterfeiting and diversion of your drugs, and to prevent any involvement of your products with illicit Internet sites and foreign pharmacies. To assist this investigation, pursuant to Rules X and XI of the U.S. House of Representatives, the Committee requests the following by February 16, 2004:

1. Please describe your plans to prevent counterfeiting and diversion of your company's drug products.

2. Please describe your discussions between your company and any federal, state or local agencies concerning issues related to plans by your company/industry and/or government to prevent counterfeiting and diversion of your drug products. Please provide the dates of contact, the names of the agencies, the names of the agency representatives, the names of the company representatives, the nature of the contact (telephone call, e-mail, letter, meeting, e.g.), and if there has been no contact, any plans for such contact.

3. What actions or counter-measures have been taken relating to any of your products being marketed by illicit Internet sites or foreign pharmacies?

In addition, we request that your company provide a briefing to Committee staff on these issues, especially your company's plans to prevent counterfeiting or diversion of your drug products. If you have any questions, please contact Alan Slobodin of the Committee Staff at (202) 225-2927.

Sincerely,

W.J. "Billy" Tauzin
Chairman

James C. Greenwood
Chairman
Subcommittee on Oversight
and Investigations

cc: The Honorable John D. Dingell, Ranking Member
The Honorable Peter Deutsch, Ranking Member
Subcommittee on Oversight and Investigations

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