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Fake Drugs a Big Concern at U.S. Border

As California considers delaying safeguards for prescription drugs, San Diego’s U.S. Customs office is increasingly concerned about pharmacists buying counterfeit drugs from Mexico and Internet sales of fake drugs.

Greg Schulte, supervisor of the commercial fraud group at the U.S. Immigration and Customs Enforcement’s San Diego office, said the border region poses a dangerous dynamic.

“Two big cities lie next to each other, but deal with laws so differently,” Schulte said of San Diego and Tijuana. “People manipulate that system.”

The California State Board of Pharmacy is scheduled to vote April 26 on whether to delay implementing a law approved by the Legislature in 2004 that would require prescription drug manufacturers, repackagers, wholesalers and others to use an electronic system to track drugs on their path to the patient. The law is set to go into effect Jan. 1, but the board could vote to hold off another year.

The Sacramento-based National Association of Chain Drug Stores and some pharmaceutical companies have requested the delay, saying they need more time to select and implement a technology. Those selling technologies that could be used to track the drugs, such as Temecula’s FFF Enterprises, are pushing the planned 2007 adoption.

Schulte and Bryan Liang, the executive director of the Institute of Health Law Studies at the California Western School of Law, will express their concerns about San Diego’s sensitivities to counterfeit drugs at a June 9 conference titled, “Terrorism, International Crime and Medicine Security,” at the Hilton San Diego Airport/Harbor Island Hotel. Speakers will also include officials from the FBI, Pfizer Inc. and the Department of Homeland Security.

Schulte said his department is hearing that small pharmacies are feeling more pressure from large wholesalers such as Wal-Mart and Walgreens, and owners may be tempted to get cheaper drugs from Mexico, where drugs are not as strictly regulated , if at all.

“Many of those drugs are manufactured in places as far away as India,” he said. “Some of the manufacturing facilities look like meth labs.”

Although Gov. Arnold Schwarzenegger proposed legalizing prescription drug importation in January, largely seen as a political ploy to gain liberal favor for his re-election, the act remains illegal. The Food and Drug Administration can, however, approve U.S. companies to manufacture drugs abroad and import them.

John Cronin, an attorney for the Sacramento-based California Pharmacists Association, said California requires pharmacies to keep records proving they purchased drugs from licensed facilities and records of how the drugs are dispensed. He said the California State Board of Pharmacy has a goal of inspecting pharmacies once every three years.

“I have not heard about any pharmacists doing that,” Cronin said of Schulte’s concerns. “If a pharmacy is bringing drugs in from Mexico or anywhere else, those drugs could be seized by the Board of Pharmacy.”

Several local pharmacies contacted for this story were hesitant to comment.

Tijuana alone has more than 1,000 pharmacias, while San Diego has just 350 pharmacies, according to the San Diego County Pharmaceutical Association. Schulte and Liang say the large number of pharmacies in Tijuana mean easier access to counterfeit medications.

Schulte said the illegal drug trade is “big here.” Internet drug sales pose a large problem, he said, because it’s difficult to tell where the seller is located.

“It’s been evolving more over the last 10 years,” he said. “As we crack down more, we get more of it moving offshore.”

In a San Diego warehouse in 2004, Schulte’s department found 200 kilograms of sildentafil citrate , enough to make $40 million worth of Viagra. The drug’s active ingredient was on its way to Juan Macklis, a fugitive hiding in Mexico who is infamous for steroid counterfeiting, especially in the 1980s, said Schulte. Macklis still has not been found.


Identifying Fakes

It is legal for U.S. drug companies to manufacture pharmaceuticals abroad and import them for sale in America. Pfizer, which has labs in La Jolla but is based in New York, has manufacturing facilities in more than 40 countries.

Pfizer, which employs more than 1,300 people at its 900,000-square-foot campus in La Jolla, began using Radio Frequency Identification, or RFID, about four months ago on all Viagra tablets sold in the United States. RFID is the most conceivable option, according to a 2004 federal Health and Human Services report, for tracing drugs as they travel distribution channels. It involves the attachment of electromagnetic chips or tags that contain product specific information and a unique serial number.

Pfizer, one of the world’s largest pharmaceutical companies, with $51.3 billion in worldwide revenues in 2005, has spent $5 million tagging Viagra, said spokesman Bryant Haskins, but the technology is only so useful because it is not yet universally adopted.

“We have probably the most broad comprehensive RFID program in place in the industry right now,” Haskins said. “RFID is still in its infancy, but you’ve got to start somewhere. It can’t just be implemented all over the U.S. overnight.”

Other anti-counterfeiting technologies include watermarking, holograms, fluorescent inks or forensic techniques such as nano-incription or chemical markers.

While some technologies, such as holograms, can be easily viewed by pharmacists, consumers and federal agents, the forensic tools would require sophisticated, expensive authentication machines, according to the 2004 HHS report, which was called the “HHS Report on Prescription Drug Importation.” It is the most up-to-date information on the government’s effort against counterfeiters, said Liang.

That report declared that the FDA was inadequately staffed to handle inspection of the estimated 10 million packages containing prescription drugs that enter the country annually. Although the number of FDA inspectors at the 13 international mail facilities has increased over the years, in 2004, the HHS said there were just 17 inspectors. San Francisco International Airport was on the list of mail facilities that receive foreign drug packages, but San Diego’s Lindbergh Field was not.

Still, San Diego’s proximity to Mexico increases its risk for drug trafficking, said Cal Western’s Liang. Liang holds a medical degree and a law degree, as well as a doctorate, and has done several studies on issues related to drug manufacturing.

NanoInk, Inc., a Washington state-based company, is working with several pharmaceutical firms on a pilot-program basis, said its Western regional sales manager, Dave Williams. The company uses dip pen nanolithography, a term the firm trademarked, which was discovered in the late 1990s by researchers at Northwestern University near Chicago. The technique uses an atomic force microscope to create a distinct image on a pill, using a chemical compound. The writing is less than one micron, he said. A human hair is about 70 microns, so the writing or information would not be visible to the naked eye.

“We’re the only ones doing this,” Williams said. He could not say which companies are using the technology, but said the dip pen nanolithography is done in each company’s own facilities.

“Criminals might think twice before counterfeiting a drug if they aren’t 100 percent confident they can do it,” Williams said.

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