Counterfeit Drugs, The FDA's Criminal Negligence

Counterfeit Drugs, The FDA's Criminal Negligence

  • Knockoff Gucci bags
  • Pirated music
  • Pirated movies
  • Fake Rolexes
  • Counterfeit prescription drugs

What do all of the above items have in common?

  • They are all available on the internet;
  • Acquiring them is a violation of various state and federal laws;
  • All but counterfeit prescription drugs can be obtained either free or for much less than the price of the real items. (At most internet pharmacies, the price you pay for the counterfeit prescription drugs is not discounted from the price of legitimate prescription drugs but, if you don’t need a prescription, is often much higher.)


Counterfeit prescription drugs usually fall into one of the following groups:

  • Fake prescription drugs (e.g. sugar pills labeled as a prescription drug)
  • Falsely labeled prescription drugs:
    • A 20 milligram prescription drug that is labeled as an 80 milligram one;
    • A expired prescription drug that is given a new expiration date (like rolling back the mileage on a car);
    • One prescription drug that is labeled as a different drug;
  • Contaminated prescription drugs made in illicit labs (Animal feces has been found in the drug powder stored in some of the labs; in other labs, ingredients that were required to be refrigerated were not and they became contaminated.);
  • Prescription drugs made in part from actual ingredients and “filler” material (e.g. adding ground-up aspirin to some of the actual ingredients);
  • Prescription drugs that contain more of the active ingredient than they should making them more harmful;
  • Prescription drugs mixed with counterfeit prescription drugs;
  • Prescription drugs not approved by the FDA for use in the United States.


The U.S. pharmaceutical industry generates $180 billion of revenue a year. The approximately 14,000 prescription drugs approved by the FDA for use in the United States are manufactured by a few hundred companies. According to the 2003 report of a special grand jury convened by Florida to study the counterfeit drug problem in Florida (“2003 Report”):

  • Approximately 46% of all legal prescription drugs were shipped directly to dispensers such as hospitals and pharmacy chains;
  • Approximately 49% of the legal prescription drugs went to the three largest wholesalers;
  • The remaining 5% were shipped to the several thousand smaller wholesalers.

Once the drugs are shipped from the manufacturers, tracing them becomes more difficult. The larger wholesalers will sell to the smaller wholesalers, who then sell to each other and sometimes to dispensers.

When manufacturers sell prescription drugs, they deliver a piece of paper documenting that the prescription drugs are legitimate. This paper is called a pedigree. In most states, wholesalers of the drugs are not required to show proof that the prescription drugs have the proper pedigree—the proof that they came from the manufacturer. In addition, even if required to provide a pedigree, many wholesalers don’t verify a pedigree if another wholesaler offers them a “good deal.”

This lack of requirement of a legitimate pedigree is the reason why more and more counterfeit drugs are getting into the hands of the public—sometimes from legitimate pharmacies or other trusted dispensers.


There is a one word answer—greed. Criminals who seek to profit at the expense of others are rapidly moving into the counterfeit prescription drug business. In a study entitled TheGood, the Bad and the Ugly written by Kevin Outterson and Ryan Smithand published in the Albany Journal of Science & Technology (2006), the authors explain, “The marginal cost of producing most name-brand drugs is a small fraction of the commercial price. An annual supply of a well-known antiretroviral triple combination drug regime in the United States costs over $11,000 at retail. Unlicensed generic companies sell the same drugs in sub-Saharan Africa for $244.” In other words, these drugs are sold in the United States at 45 times what it cost to produce them.

The authors point out that generic ciprofloxacin, the drug used to treat anthrax, is sold in other parts of the world for 0.4% of the price in the United States, a ratio of 246:1. (The authors say that it is estimated that cocaine has a 25:1 ratio.) They also explain that these ratios are assuming that the criminal is using the actual pharmaceutical ingredients. Similar to dealers in cocaine and heroin who want to deliver a good product to ensure that their customers will keep returning, many criminal manufacturers of certain drugs will use the proper ingredients.

However, many other criminals have decided that they just want to make a profit and will use only some or maybe none of the actual ingredients—to cut costs and make more money.

The 2003 Report then states, “In Florida alone there are 422 in-state and 977 out of state wholesalers licensed to sell pharmaceutical products within this state. To put this number in context, there are approximately 3,400 walk-in and 1,000 institutional pharmacies in Florida, or approximately one wholesaler for every three pharmacies.”

Then in language rarely seen in public documents, the 2003 Report continues, “Many of the wholesalers in Florida’s market are unqualified, inexperienced, irresponsible and incompetent to properly handle, store or deal in pharmaceuticals. Some even have criminal records, though how many is impossible to know since Florida only does minimal background checks before issuing wholesale permits. Any drugs that come into the possession of these wholesalers, whether acquired legally or illegally, are likely to become tainted due to improper handling and storage.

An alarming percentage of the drugs flowing through the wholesale market have been illegally acquired. That is, they have been stolen from shipments, pharmacies, clinics, and hospitals; purchased on the black market from recipients and health care professionals who are defrauding insurance companies or Medicaid with bogus prescriptions; or illegally imported from overseas. This activity is commonly referred to as drug diversion.”


Counterfeit prescription drug sales are expanding on the internet. The World Health Organization estimates:

  • 50% of the prescription drugs purchased from internet pharmacies without physical addresses are counterfeit;
  • Global counterfeit drug sales have increased more than 90% since 2005;
  • Global counterfeit drug sales will exceed $75 billion by 2010.

Of course, some of these counterfeit drugs are also going to get into the hands of addicts. Some of the counterfeit prescription drugs will be harmless—they just won’t give the users a “high”. But others may not be so harmless.

In 2003 the FDA issued an alert that 200,000 bottles of counterfeit Lipitor had gotten into the United States. Lipitor is the type of drug that counterfeiters like for these reasons:

  • Lipitor sales are almost $3 billion per year.
  • Unless it has some toxic ingredients, it will not show up as being counterfeit for some time—until the person realizes that their cholesterol has shot up higher.
  • If the person is ordering the prescription drug over the internet, presumably without a prescription, then they are unlikely to report their own crime to the police.
  • Law enforcement agencies are concentrating on stopping the illegal drug trade and few law enforcement agencies are directing attention to stopping illegal prescription drug traffic.


Counterfeit drugs are recognized as a huge problem in other parts of the world—an estimated 100,000 people a year die in China from taking counterfeit prescription drugs. Recently, counterfeit prescription drugs have taken the lives of 19 Americans and caused severe injury to hundreds more.

Many people getting dialysis and heart surgery take large doses of heparin, a generic blood thinner. The heparin sold by Baxter International contained contaminated ingredients that were purchased from a plant in China.

It turns out that the FDA did not, as they were supposed to, investigate the Chinese plant. In fact, Rep. John Dingell, a Michigan Democrat who chairs the House Committee on Energy and Commerce, said, “Only 13 inspections were conducted in China in 2007. At this rate, it would take the FDA 55 years just to clear this backlog.”

Representative Tom Bliley said, “The FDA’s regulatory system used to protect Americans from counterfeit or substandard drug ingredients has significant holes.” Bliley said the FDA allows the import of drugs based “merely on the representations of an international broker, who could in fact be the counterfeiter.”

“The FDA admits it has information on only 18 percent of the foreign drug manufacturers shipping to the U.S,” Bliley added. He reports that since 1997, some 4,600 foreign drug makers have shipped medication into the U.S. without getting inspected.

According to an article entitled, FDA Scrutiny Scant In India, China as Drugs Pour Into U.S., Broad Overseas Checks Called Too Costly, by Marc Kaufman that appeared on June 17, 2007 in the Washington Post, “Companies based in India were bit players in the American drug market 10 years ago, selling just eight generic drugs here. Today, almost 350 varieties and strengths of antidepressants, heart medicines, antibiotics and other drugs purchased by American consumers are made by Indian manufacturers.

Analysts estimate that as much as 20 percent of finished generic and over-the-counter drugs, and more than 40 percent of the active ingredients for pills made here, come from India and China. Within 15 years, they predict, as much as 80 percent of the key ingredients will come from those countries — which are quickly becoming attractive to brand-name drugmakers, too.”

The article also states, “Over the past seven years, amid explosive growth in imports from India and China, the FDA conducted only about 200 inspections of plants in those countries, and a few were the kind that U.S. firms face regularly to ensure that the drugs they make are of high quality.

The agency, which is responsible for ensuring the safety of drugs for Americans wherever they are manufactured, made 1,222 of these quality-assurance inspections in the United States last year. In India, which has more plants making drugs and drug ingredients for American consumers than any other foreign nation, it conducted a handful.”

The FDA again proves that they don’t see their job as helping the consumer but the drug companies.


The terms of the settlement were supposed to be confidential, but $48.55 million is being paid by Eli Lilly and $23.55 million by Bristol Myers Squibb to settle a suit filed by 500 cancer patients. Kansas City pharmacist Robert Courtney admitted to diluting the two chemotherapy drugs Gemzar and Taxol so that he could sell more of the drugs to his patients. The suit alleged that Lilly and Squibb buy and analyze data that tracks pharmaceutical sales and knew that Courtney was reporting sales of many more of their drugs than he was buying. The suit also alleged that rather than notify the doctors prescribing the medication or the authorities, both companies decided to keep quiet and 500 hundred innocent people suffered. Squibb and Lilly denied the allegations but settled the case with the agreement that all the court records be sealed.


A man was arrested for embezzling from a group of retired people. Many of his victims came to court to demand more jail time for the man. After listening to the victims for an hour, the judge turned to the man and asked, “You have heard from all these nice people. How could you take money from people who trusted you?” The man said to the judge, “Your Honor, those are the only kind of people from whom you can take money.”

The purveyors of counterfeit drugs, the FDA and the drug companies will only be able to take our money and our health from us if we continue to trust them.

At Novus Medical Detox Center, we will do our part to save people from their misguided trust in prescription drugs, the FDA and the drug companies.

This email is provided for general educational purposes only and is not intended to constitute (i) medical advice or counseling, (ii) the practice of medicine including psychiatry, psychology, psychotherapy or the provision of health care diagnosis or treatment, (iii) the creation of a physician patient or clinical relationship, or (iv) an endorsement, recommendation or sponsorship of any third party product or service by the sender or the sender’s affiliates, agents, employees, consultants or service providers. If you have or suspect that you have a medical problem, contact your health care provider promptly.

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