Testimony Underscores Global Threat of Counterfeit Drugs, Need for Greater Enforcement

February 27, 2014

Members and Witnesses Urge Increased Enforcement Measures to Detect and Punish Illegal, Counterfeit Drug Manufacturing and Distribution

WASHINGTON, DC – The House Energy and Commerce Subcommittee Oversight and Investigations, chaired by Rep. Tim Murphy (R-PA), today held a hearing to examine the ongoing threat of counterfeit drugs, in particular illegal drug supply chains. Witnesses and members discussed how advances in technology, a globalization of the drug supply, and the proliferation of rogue Internet pharmacies have all contributed to this growing threat of illegal, counterfeit drugs reaching Americans. The subcommittee today explored how to improve and update the enforcement and penalties for these crimes in this new era of counterfeiting.

“In the United States, a relatively comprehensive system of laws, regulations, and enforcement by federal and state authorities has kept drug counterfeiting incidents in the United States relatively rare, and FDA continues to believe – and works to ensure – that Americans can have a high degree of confidence in the drugs they obtain through legal channels,” said Howard Sklamberg, Deputy Commissioner for Global Regulatory Operations and Policy at FDA. “Nonetheless, with the dramatic increase in the complexity of the global supply chain, FDA and its regulatory and law enforcement partners around the world face enormous challenges regarding supply chain security.”

Marcia Crosse, Director of Health Care at the Government Accountability Office explained, “Although the exact number of rogue Internet pharmacies is unknown, one estimate suggests that there were over 36,000 in operation as of February 2014, and these rogue sites violate a variety of federal laws. Most operate from abroad, and many illegally ship prescription drugs into the United States that have not been approved by the Food and Drug Administration, including drugs that are counterfeit or are otherwise substandard. … Foreign rogue Internet pharmacies use sophisticated methods to evade scrutiny by customs officials and smuggle drugs into the country. Their operations also often violate other laws, including those related to fraud and money laundering. Rogue Internet pharmacies are often complex, global operations, and federal agencies face substantial challenges investigating and prosecuting those involved.”

“Our biggest challenge is that criminals are now willing to counterfeit and market any product that will sell, regardless of whether it could result in serious and significant injury to consumers or the public,” said Lev Kubiak, Director of the National Intellectual Property Rights Coordination Center at the Department of Homeland Security. One reason for this is substandard penalties. Vice President and Chief Security Officer for the Global Security, Compliance Division at Pfizer Inc., John Clark explained, “Those who counterfeit medicines seem confident that even if they get caught, they will get a mere slap on the wrist.”

Murphy underscored the point, adding, “The penalties for drug-counterfeiting under the Federal Food Drug and Cosmetic Act have not been updated since 1938. As the FDA Commissioner has said, there is a steeper penalty for counterfeiting a designer purse under the Federal Criminal Code than a drug product under current FDA law.”

Subcommittee Vice Chairman Michael C. Burgess, M.D. (R-TX) further elaborated, “In my opinion, punishment for counterfeiting prescription medication is far from adequate. From fake flu vaccines to oncology drugs – counterfeit medications have been able to enter the supply chain and even been administered.”

Members and witnesses expressed bipartisan agreement that this threat is a top concern.

The Energy and Commerce Committee has been actively working for fortify the drug supply chain, and last year led the effort in drafting and passing the Drug Quality and Security Act, which became law in November 2013. This legislation, championed by Chairman Fred Upton (R-MI), established a track-and-trace pedigree system for drugs and marked a significant milestone for legal supply chain security and patient safety.  

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