Supply Chain Vulnerability

"Although our experience tells us that the number of counterfeit drug products entering the U.S. drug supply chain remains low, we have witnessed an increase in counterfeiting activities and a greater capacity to introduce counterfeit drugs into legitimate drug distribution channels."Randall Lutter, associate commissioner for Policy and Planning, FDA

The American pharmaceutical market is the largest in the world, doubling in the last five years to $200 billion. New drugs and an aging population resulted in over 4 billion prescriptions filled last year alone. In this lucrative market, it's becoming harder to distinguish between legitimate and fraudulent drug suppliers.

Points of Vulnerability

1. Strict laws control drug importation and re-importation. Yet counterfeit drugs bypass understaffed regulators. In some cases, the origin of an imported drug is unknown. It may be a safe drug from a legitimate pharmaceutical manufacturer, or made in a garage.
2. Legal personal purchases from foreign suppliers may be illegally aggregated and reintroduced into legitimate supply chain.
3. Unscrupulous wholesalers may combine counterfeit with authentic drugs.
4. Some pharmacies provide pharmaceuticals to a selected audience, such as HIV/AIDs patients or the elderly. These are called "closed door" pharmacies." While many closed door pharmacies lawfully sell deeply discounted drugs to hospices and nursing homes, others divert the drugs at full price to secondary wholesalers. Diversion is also a way for diluted or adulterated drugs to enter the legitimate drug supply.