U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

82–326 PDF 2002

S. HRG. 107–727

BUYER BEWARE: PUBLIC HEALTH CONCERNS OF

COUNTERFEIT MEDICINE

HEARING

BEFORE THE

SPECIAL COMMITTEE ON AGING

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

WASHINGTON, DC

JULY 9, 2002

Serial No. 107–29

Printed for the use of the Special Committee on Aging

(

SPECIAL COMMITTEE ON AGING

JOHN B. BREAUX, Louisiana, Chairman

HARRY REID, Nevada

HERB KOHL, Wisconsin

JAMES M. JEFFORDS, Vermont

RUSSELL D. FEINGOLD, Wisconsin

RON WYDEN, Oregon

BLANCHE L. LINCOLN, Arkansas

EVAN BAYH, Indiana

THOMAS R. CARPER, Delaware

DEBBIE STABENOW, Michigan

JEAN CARNAHAN, Missouri

LARRY CRAIG, Idaho, Ranking Member

CONRAD BURNS, Montana

RICHARD SHELBY, Alabama

RICK SANTORUM, Pennsylvania

SUSAN COLLINS, Maine

MIKE ENZI, Wyoming

TIM HUTCHINSON, Arkansas

JOHN ENSIGN, Nevada

CHUCK HAGEL, Nebraska

GORDON SMITH, Oregon

MICHELLE EASTON, Staff Director

LUPE WISSEL, Ranking Member Staff Director

(II)

C O N T E N T S

Page

Opening Statement of Senator John Breaux ......................................................... 1

Statement of Senator Ron Wyden .......................................................................... 2

Statement of Senator Thomas Carper ................................................................... 3

PANEL I

Rick C. Roberts, San Francisco, CA ....................................................................... 4

William K. Hubbard, Senior Associate Commissioner, Policy, Planning and

Legislation, Food and Drug Administration, Washington, DC ........................ 10

Elizabeth G. Durant, Executive Director, Trade Programs, U.S. Customs

Service, Washington, DC ..................................................................................... 45

John Theriault, Vice President, Corporate Security, Pfizer Inc., Washington,

DC .......................................................................................................................... 51

APPENDIX

Statement of Ronald J. Streck, President and CEO of the Healthcare Distribution Management Association ..................................................................... 89

Statement of Mary R. Grealy, President, Healthcare Leadership Council ......... 93

(III)

(1)

BUYER BEWARD: PUBLIC HEALTH CONCERNS

OF COUNTERFEIT MEDICINE

TUESDAY, JULY 9, 2002

U.S. SENATE, SPECIAL COMMITTEE ON AGING, Washington, DC.

The committee met, pursuant to notice, at 2:35 p.m., in room

SD–562, Dirksen Senate Office Building, Hon. John Breaux (chairman of the committee) presiding.

Present: Senator Breaux, Wyden, and Carper.

OPENING STATEMENT OF SENATOR JOHN BREAUX

The CHAIRMAN. The Aging Committee will please be in order.

I want to welcome all of our witnesses who are with us this afternoon and all of our guests and thank them for being with us.

I want to especially welcome Mr. Rick Roberts who has traveled

all the way from Colorado to share his story with us, and we thank

him for being with us this afternoon.

Last September, this committee held a hearing to examine the

marketing practices of some of our dietary supplement companies.

What we found at that time was that unscrupulous con men were

making unsubstantiated health claims about products which undergo practically no Food and Drug Administration approval process. As unsavory as these characters were, none of their products

claimed to have FDA approval. They were simply gaming the system.

Today’s hearing, ‘‘Buyer Beware: Public Health Concerns of

Counterfeit Medicine,’’ is being called to examine an even worse

practice; that is, the counterfeiting of FDA-approved prescription

pharmaceuticals.

The term ‘‘counterfeit’’ will be used today to discuss pharmaceutical products which fall under three very broad headings. The

first consists of products which contain the correct active ingredients, but have either incorrect dosages or have expired or have

been re-labeled. These drugs could trigger allergic reactions or simply be ineffectual in treating the problems for which they were intended.

The next group consists of products with no active ingredients.

These products may sound safe, but, in fact, they prevent patients

from receiving the proper medical treatment and could effectively

lead to a patient’s untimely death.

Finally, the third group consists of products containing the wrong

ingredients. These drugs may actually contain other medicines or

toxic substances which can lead to immediate health care problems.

2

It was reported last year that nearly 8 percent of drugs imported

into the United States are fake. The World Health Organization

has estimated that about 8 percent of the medicines available

worldwide are also counterfeit. These statistics are, of course, very

troubling.

The United States maintains the most rigorous pharmaceutical

regulatory system in the world, but high prescription drug costs

and the growing Internet marketplace make the United States an

increasingly attractive market for these who engage in these unscrupulous activities.

Additionally, we will hear today that counterfeits are entering

our country not only through personal importation and the Internet, but also on the shelves of trusted retail pharmacies.

The Congress has held dozens of hearings on the rising costs of

prescription drugs, and we have heard countless stories of individuals and families who have been devastated by the financial burdens of treating chronic illnesses. Today’s hearing will illustrate

that we cannot look abroad for the solution to the prescription drug

dilemma. We in the Congress must do all that we can to provide

a meaningful, affordable prescription drug plan for our Nation’s

seniors, and we must do it before more of our vulnerable citizens

jeopardize their lives looking for a solution.

I look forward to hearing from our panel members and their testimony and also the participation of our colleagues. I would first

recognize our colleague on the committee who contributes so much,

Senator Wyden.

STATEMENT OF SENATOR RON WYDEN

Senator WYDEN. Thank you, Chairman Breaux, and thank you

very much for your continued interest in this problem. My sense

is that this problem has grown in the United States since the

World Health Organization concluded in 1992 that, in some countries, as much as 60 percent of all drugs may be counterfeit.

I will tell you, Chairman Breaux, I think your hearing is particularly timely because, at a time when the Congress is working to

add a prescription drug benefit to Medicare, it is absolutely critical

that the senior citizens of this country get the real thing. Counterfeit medicine is certainly a financial ripoff, but I think what we

have seen in your investigations and others is that it can be lifethreatening as well.

I would wrap up with just a couple of points, Mr. Chairman, that

I am interested in working with you on. First, with respect to the

Internet sites, it is going to be very important to examine them

carefully because I think there can be some serious questions with

respect to documenting the chain of custody for drugs that are sold

over the Internet, and the challenge will be to make sure that

there is the adequate documentation without creating a whole barrage of new red tape and bureaucracy. I am going to be asking our

witnesses about that issue in particular.

The other point that I would want to mention, Mr. Chairman, is

that I think there are some great opportunities technologically to

root out the fake drugs, the counterfeit drugs. As you know, I chair

the Commerce Committee’s Subcommittee on Technology. I work

very closely with you on the Commerce Committee.

3

For example, there are some exciting new handheld devices that,

in effect, work almost like X-rays. They are almost X-ray gadgets

that can, I think, be an ideal tool for rooting out the counterfeits.

I would hope that we could work together both on this committee

and in our work on the Senate Commerce Committee to look at

some of the new technologies that can help us root out the fakes

and counterfeits that threaten the people of our country.

I thank you again for your leadership.

The CHAIRMAN. Thank you, Senator Wyden.

Senator Carper.

STATEMENT OF SENATOR TOM CARPER

Senator CARPER. Thank you, Mr. Chairman.

To our witnesses, we welcome you. We are delighted that you are

here and look forward to your testimony.

I am scheduled to preside at 3. So, if I get up and walk out during the middle of somebody’s testimony, I have gone to do my day

job, and I ask for your forgiveness.

During this past week, we have been in recess. I live only in

Delaware. I go home virtually every night, but recess for me is just

a chance to not only reconnect with my family a little bit, but also

to reconnect big time with my State.

We held a series of housing summits throughout the State on affordable housing, home ownership, and I held a number of meetings, almost like focus groups, with senior citizens. The issue, not

surprisingly, was prescription medicines under Medicare.

I don’t know if your ears were burning, Mr. Chairman, but your

name was invoked kindly in the number of stops, Bob Graham for

his legislation. The House Republican bill was discussed at some

length, and we talked about the different proposals, what the

copays were, what the deductibles were, what the monthly premiums were, what the caps were of which Medicare picked up the

entire tab. There was a fair amount of discussion on that, but in

every one of those meetings, we also talked about the issue of

medicines that can be obtained across the border, maybe across the

border in Canada or in Mexico or in other places around the world.

I wish that those people who were good enough to participate in

those focus groups back in Delaware with me over the last week

were able to be here today to hear this testimony, and my hope is

that some of them are watching on television. This is a good hearing, and it is a timely hearing.

I just want to say to you for all the time and effort that you have

put into the issue of how do we make prescription drugs available

to senior citizens, to our Medicare population, and doing so in a

way that is consistent with a balanced budget and that harnesses

market force, my special thanks.

The CHAIRMAN. I thank both of my colleagues for their generous

comments, and we are very pleased to have our panel.

First would be Mr. Rick Roberts. He is a professor in the Department of Communications Studies at the University of San Francisco, spends his summers working with at-risk high school students at the Eagle Rock School in Colorado, and will tell us about

his firsthand experience about using a prescription drug that

turned out to be counterfeit.

4

Mr. Roberts, we welcome you to the committee.

STATEMENT OF RICK C. ROBERTS, SAN FRANCISCO, CA

Mr. ROBERTS. Thank you. I appreciate this opportunity to share

my story.

The CHAIRMAN. Pull the mike up a little bit closer, Mr. Roberts.

Thank you.

Mr. ROBERTS. Thank you for this opportunity to share my story.

Yes. I teach at the University of San Francisco and work with

at-risk youth. I am on the board of the Andrew Ziegler Foundation

committed to HIV care and standard of care and access to that

care, but today I am really here to talk to you as an individual, not

from those perspectives, but as someone who has experienced counterfeit medicine.

I think my story is important because it is truly, in the end, the

individual who suffers from this crime either by way of not receiving medication required or potentially getting something dangerous

and the anxiety that is associated with taking a counterfeit medication.

My story starts in the early 1980’s. I was a student in college

and was infected with HIV before we even knew about HIV. In

1988, I became ill and was diagnosed with AIDS-related complex,

I immediately began taking AZT, which was the only antiretroviral approved by the FDA at that point, and that began my

journey of doctors and procedures and pharmacies and insurance

companies and medications and side effects. I think it has been

quite a journey.

Twelve years later, in the year 2000, I was facing HIV Wasting

Syndrome. I was on a number of medications to help prevent that.

They were failing, and so what I needed was Serostim, which is

human growth hormone produced by Serono. I was fortunate

enough that my insurance company approved a 12-month supply of

Serostim, and I began taking it. I injected it every day and with

very positive results.

But, about halfway through this process of Serostim, I noticed

burning at the injection sites and what I think were some subtle

differences in packaging.

January 2001, I asked my pharmacist. He was at the counter

and I said, ‘‘Do you know why this is burning?’’ He said it

shouldn’t, but that I should go home because maybe I had some

fake Serostim. I asked him what he meant by that. He said he

didn’t know much more except that he knew that there was some

fake Serostim.

So I went home and looked very closely at what I had, the empty

vials and boxes with the remaining doses I had, plus what I had

just received from the pharmacy, and noticed that there were three

groups, the group that matched exactly what I had just picked up,

and then two other groups, one with some subtle differences and

one which it turned out to be big differences in their packaging and

quality of drugs.

At that point, it was pretty clear that for at least for a month,

I had injected daily something other than growth hormone. The

question that immediately came to my mind was, ‘‘what had I injected?’’

5

I went online, went to the Serono website where they did have

a warning and a lot number listed. I checked. I had that lot, but

I was sure that I had something in addition to that lot, and they

said they were cooperating with the FDA’s criminal investigation.

I went to the FDA site and read their warning that this counterfeit had been found in seven States and that they had a criminal

investigation that was ongoing.

I contacted both of those groups, and it would be 3 months of

sleepless nights and doctor appointments and anxiety attacks before I found out what I had injected. At the end of those 3 months

of waiting, I was told that there would be no long-term consequences for what I had injected. It would be another 3 months

before I found out what was in the second batch, and that it was

still true that I would be OK in the long run. Luckily, I was stable

enough that I hadn’t suffered from not getting the medication I

needed during that month. So I feel like I was pretty lucky.

I still have a number of questions. I am looking forward to the

conclusion of the FDA investigation for some answers.

I think, most importantly to me, that I feel fortunate that I found

out about it and that I was stable, but I only knew about it because

I happened to ask my pharmacist and he told me. There was never

an attempt to inform me or warn me of the dangers of counterfeit

Serostim, even though I was one of just 6,000 people in the country

on the drug at the time.

These were really high-quality counterfeits. You can see here

some, just subtle, differences between them.

The CHAIRMAN. Go ahead and show them what you have.

Mr. ROBERTS. These two here are the real thing. This box is the

real thing.

These are both counterfeits and came with these boxes here.

Obviously, they were counterfeited well enough to fool the pharmacist. As I said, I noticed small changes, a rubber stopper in one

bottle that wasn’t in the other, the tabs on the top were slightly

different colors.

These are counterfeit. These are real. Counterfeit. Real.

I think I know these in detail now. I am very careful. Every time

I get a prescription, I examine everything very carefully. After this

experience, I became very, very aware of the fact that I needed to

be diligent about checking the prescriptions I was receiving.

These are not run-of-the-mill drugs. Most HIV medication and

related medications are very, very expensive, especially growth hormone.

So, in the end, after I found out I was safe, I became frustrated

and angry that no one had tried to contact me. I wasn’t aware of

the danger, and just as I began, I think this story is important because, in the end, it is the individual who really does suffer from

this crime.

Thank you.

[The prepared statement of Mr. Roberts follows:]

6

7

8

9

10

The CHAIRMAN. Thank you, Mr. Roberts. We have a number of

questions we want to get into, but we will hear from our other witnesses.

Next, we have, please, Mr. Bill Hubbard, who is Senior Associate

Commissioner for Policy, Planning and Legislation at the Food and

Drug Administration.

Mr. Hubbard, we welcome your testimony.

STATEMENT OF WILLIAM K. HUBBARD, SENIOR ASSOCIATE

COMMISSIONER, POLICY, PLANNING AND LEGISLATION,

FOOD AND DRUG ADMINISTRATION, WASHINGTON, DC

Mr. HUBBARD. Thank you, Mr. Chairman.

We are all familiar with counterfeiting. We hear about it in

handbags and watches and clothing and other sorts of things, and

it is a problem throughout the country and, in fact, throughout the

world. But pharmaceuticals, we believe, represent a special problem in that consumers not only can have their pocketbook placed

at risk, but their life as well, and consumers cannot discern for a

pharmaceutical what they have.

This is a counterfeit watch from the streets of Washington. It

cost $9, but I could take this to a jeweler who would readily know

that it is counterfeit. Even a consumer can see from the second

hand that it is probably not a fine Swiss timepiece.

This is a counterfeit drug made by the same company that Mr.

Roberts was talking about, that is indistinguishable from the real

thing, and if I showed this to a patient, he couldn’t tell the difference. If I showed it to a pharmacist, he couldn’t tell the difference. If I showed it to a doctor, he couldn’t tell the difference.

As a matter of fact, if I took it to the company, they would likely

be unable to show initially the difference until they spent some

time looking at that. So this is a real problem, and the sophistication of the counterfeiters, we believe, is a problem. So it is very

timely that you are having this discussion with us.

Counterfeiting has been a very limited problem in the past, but

we are concerned that it is getting to be more of a problem. Since

1998, we have had about 55 counterfeit drug cases that have resulted in 26 arrests and convictions, If you look at the pyramid of

those cases, they are increasing.

In 1999, we had six cases opened. In 2000, we had 10 cases

opened. In 2001, the FDA opened 23 cases, and so far this year,

we have opened 16 counterfeit cases, which would mean we are

going on a rate for the year of 30 or more.

We are also seeing something we haven’t seen before that my colleagues at Customs are very used to, and that is the concept of

smuggling. We all hear about smuggling of narcotic drugs, which

is a very old story, but now we are seeing smuggling of prescription

drugs.

This is a toy from China that came in, and in the back was a

pocket that contained Viagra. There has been a case on that.

We have a little toy car that has a little metal motor in it to

make it go around, but they took the motor out put a drug called

Tramadol in there, and that has been a problem.

11

American consumers are seeking out these products more because, as you pointed out, the high cost of drugs drives people to

look for cheaper medications.

We have also seen an increase in the use of the mail and the

Internet to purchase drugs, as you know, and that is also a challenge because neither we nor the Customs Service can deal with

these thousands and thousands of packages that come in.

As a matter of fact, we and Customs did a sample look a couple

of years ago at international mail facilities, and if you extrapolate

from what we saw just in a few days, there may be 1- to 2 million

of these little individual packages coming in that people order over

the Internet. The system really can’t deal with trying to assess the

quality of each one of these and try to assure the public that they

are safe.

Our criminal investigators are also seeing counterfeit or otherwise suspect drugs from just any possible country. We have an example from Spain, England, China, France, Germany, Bahamas,

Mexico. It is everywhere, as you pointed out in your opening remarks, Mr. Chairman. So it is clearly an issue that we are very

concerned about.

Also, there is this emergence of what we see as an illicit wholesale drug system out there that, because of the tiered pricing in the

industry. There are profits to be made. If you can find a way to get

drugs at a discount over here more than you need, you can sell

them over there, and then that gives the counterfeiters a potential

entree.

The system in this country has traditionally been closed. It is

hard to get into the drug distribution system in this country unless

you are a manufacturer or established wholesaler. The counterfeiters want a way to get in, and we are concerned that some of

these things that are going on open that up.

The latest we see is Canada. That is the trend of the day. The

Canadian drugs are clearly cheaper. The numbers are there, and

we see ads in newspapers, particularly in areas with large numbers

of senior citizens. Come on down or buy our drugs from this site,

86-percent savings, Congress says this is legal, this is a good thing,

and just fill out the form and send in your check and your drugs

will be on the way.

So that tendency of the promotion of these products as well as

the consumers looking for the cheaper drugs——

The CHAIRMAN. Excuse me, Mr. Hubbard. Is that ad a mail order

ad for mail order?

Mr. HUBBARD. This particular ad is a newspaper ad, but then it

says you can fill out this form and order the drugs or you can go

on their website and order the drugs. It says that they are Canadian drugs that would offer 86-percent savings. Our data shows the

savings from Canada is probably more like 40 to 60 percent, somewhere in that range, but there probably are some that go as high

as 86 percent because, in fact, there is a range of price savings if

you go to Canada.

The CHAIRMAN. OK.

Mr. HUBBARD. Of course, these ads imply that it is legal, it is acceptable, and the drugs are safe.

12

So thank you for this hearing, and we stand ready to provide

whatever assistance we can to the committee.

[The prepared statement of Mr. Hubbard follows:]

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

The CHAIRMAN. Thank you very much. We have some questions,

I know, for you as well.

We are delighted to have Elizabeth Durant, who is Executive Director of Trade Programs at the U.S. Customs Service.

Ms. Durant, welcome to the committee.

STATEMENT OF ELIZABETH G. DURANT, EXECUTIVE DIRECTOR, TRADE PROGRAMS, U.S. CUSTOMS SERVICE, WASHINGTON, DC

Ms. DURANT. Thank you, Mr. Chairman.

I would like to, today, talk to you about U.S. Customs’ efforts to

address this ever-increasing trend of personal and bulk importation

of pharmaceutical products into the United States.

The main focus of the Customs Service has shifted to protecting

the United States from terrorist attacks. There is no doubt about

it, but we have many other missions in Customs and we do perform

services under the direction of over 40 other Federal agencies. One

of our closest partners is the Food and Drug Administration.

The Customs Service is concerned with three ways that pharmaceuticals are imported, those purchased through the Internet and

shipped through our international mail and express courier facilities, those carried into the United States by individuals transiting

our land borders, and bulk shipments of adulterated or counterfeit

pharmaceuticals.

Millions of packages come through the mail in express courier facilities every year. Thousands of packages, particularly in the mail,

are found to contain illegal and unapproved pharmaceuticals. We

also estimate that 10 million people cross the land border annually

carrying the same unapproved products.

A disturbing trend is the increase in bulk shipments through the

mail indicating that these products could be making their way to

pharmacy shelves. Detecting prohibited pharmaceuticals among the

tens of millions of parcels passing through our facilities each year

presents a massive challenge. Our limited resources require a risk

management approach with which we utilize advanced intelligence,

records of past seizures, and other factors to locate packages that

present the most significant threats.

Customs’ laboratories help us find discrepancies in shipments of

bulk and finished pharmaceuticals, but we do require the assistance from the FDA to establish effective national standards for the

interdiction of pharmaceuticals subject to FDA laws.

Based on an operation nicknamed Operation Safeguard that we

have carried out over the past couple of years, we have found the

volume of pharmaceuticals shipped through the international mail

to be enormous. We have also found that a significant number of

these do not contain an active pharmaceutical ingredient, but

merely substances such as starch or sugar. Other problems include

expired materials, unapproved products, improper use instructions,

and products made in facilities not under proper regulation.

The vast majority of pharmaceuticals that enter the U.S. via the

mail do so in a manner that violates present FDA requirements.

Additionally, we have found many parcels contain different types

of pharmaceuticals that, if taken simultaneously, could cause dangerous interactions. Individuals not under the direct supervision of

46

a physician could easily purchase these products. Thus, we cannot

assume that the products would be used properly.

It is important to note that after 3 weeks of one phase of Operation Safeguard, the quantity of illegal and defective pharmaceutical shipments slowed significantly. So they are watching us,

and they are watching what we get, and they move on or wait a

while until we can get back to them.

During a recent phase of Operation Safeguard that took place at

two international mail branches, 31 parcels containing 52 different

types of questionable pharmaceuticals underwent intensive chemical analysis. The analysis of these products showed that eight of

the so-called pharmaceuticals, or 15 percent, contained no identifiable active ingredient, and 18 contained a substance that is regulated under Federal Controlled Substance Act.

Additionally, during this phase of the operation, it was found

that large parcels of fake or gray-market pharmaceuticals are being

split into different mail shipments, but arrive at the same address.

This is a relatively new trend.

Accordingly, there is a possibility that stateside pharmaceutical

distributors are using these products as a source of supply. It is

clear that this remains an overwhelming problem.

Travelers who attempt to import pharmaceuticals upon their return to the United States are also a source of concern. Customs is

seeking and working with the FDA to more sharply define the current broad discretion given to Customs inspectors to decide whether or not an importation is for a legitimate personal medical use.

From an overall perspective, the spiraling volume of goods at our

borders has put immense pressure on our ability to enforce the Nation’s laws and protect the borders against the threat of terrorism.

Although we have taken some positive steps, successfully identifying and handling imported pharmaceuticals presents a daunting

task for Customs.

I want to thank you and members of the committee for considering the Customs Service in your review of the importation of personal and bulk pharmaceuticals. This is an issue that speaks directly to our mission. We will continue to make every effort possible to work with the Congress and our fellow inspection agencies

to address the health and safety concerns of the American people.

[The prepared statement of Ms. Durant follows:]

47

48

49

50

51

The CHAIRMAN. Thank you, Ms. Durant.

Next, we will hear from Mr. John Theriault, who is Vice President for Corporate Security at Pfizer Corporation.

Mr. Theriault.

STATEMENT OF JOHN THERIAULT, VICE PRESIDENT,

CORPORATE SECURITY, PFIZER, INC., NEW YORK, NY

Mr. THERIAULT. Thank you, Mr. Chairman, Senator Wyden. It is

a pleasure for me to appear before you today to discuss the critically important issue of counterfeit medicine.

I am the Vice President of Corporate Security at Pfizer, and in

that position, I am responsible for implementing policies and procedures to protect Pfizer’s personnel, its products, its facilities, and

its intellectual property. That responsibility is global in scope.

Prior to joining Pfizer, I was a special agent of the FBI for 25

years and served in a variety of investigative, management, and

executive positions. I spent seven of those years outside of the

United States serving as Legal Attache ́ in Ottawa, Canada, and in

London, England. During the London assignment, I was also diplomatically accredited to our embassies in Ireland and all of the

Scandinavian countries. I have substantial experience in international law enforcement, and when I retired from the FBI in

1995, I was a member of the Bureau’s of Senior Executive Service.

Mr. Chairman, while my testimony today focuses on my own experience and that of my company, Pfizer, I want also to convey to

you the very significant message that the problems of counterfeiting, copying, adulterating, and misbranding prescription drugs are

faced by many companies.

A significant aspect of my job is to protect the health and safety

of consumers by identifying counterfeit, diverted, adulterated, or

unsafe Pfizer products in the marketplace, and to ensure that

prompt and decisive action is taken to eliminate them.

Pfizer takes this responsibility very seriously and has taken

some of the most innovative and aggressive steps in the industry

to deal with an emerging global counterfeiting problem that could

have disastrous consequences for consumers.

My testimony and the pictures that accompany it describe some

of the actions that we have taken in China, Taiwan, and Thailand,

using well-documented cases involving Viagra.

Right now, I want to move on to describe two cases in the United

States to illustrate what I think is a much larger problem facing

the entire pharmaceutical industry with respect to counterfeit

medicines.

First, in September 2001, a self-employed carpet cleaner doing

business as Mr. Spotless and Dr. Schwab was arrested for selling

counterfeit Viagra on the basis of information that we developed

and local authorities in Ohio corroborated.

During the investigation, authorities intercepted 36,000 counterfeit Viagra tablets consigned to Mr. Spotless from a fictitious toy

company in China. As you can see from this photograph of the evidence that was seized, the counterfeit medicine, pill bottles, foil

bottle seals, and labels were all concealed in stuffed animals. Information indicated that Mr. Spotless had a fairly extensive distribuVerDate 11-MAY-2000 10:44 Nov 22, 2002 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 C:\DOCS\82326.TXT SAGING1 PsN: SAGING1
52

tion network. An investigation is currently ongoing to determine

the extent of it.

Next, on May 17, 2002, seven individuals and five companies

were indicted by a New York grand jury and charged with manufacturing counterfeit Viagra and selling it over the Internet. The

investigation, which we initiated, covered a 17-month period during

which investigators purchased 28,000 bogus Viagra tablets from

China and India. The scope of that conspiracy is demonstrated in

this exhibit that shows the linkage between counterfeit wholesalers

in Hong Kong and resellers in Florida, Nevada, and Colorado. The

wholesalers were also linked with counterfeit product that was

found in three cities in China.

Another aspect of this same case involved an individual named

Girith Vishwanath of Benzo Chemical Industries in India who actually sold undercover operators a tablet-punching machine that

weighed 1,500 pounds, which you can see in this photograph, and

offered a constant supply of tablet blend so that his customer could

manufacture his own Viagra. During the investigation, those indicted bragged that they could deliver 2.5 million counterfeit

Viagra tablets to New York each month.

Mr. Chairman, it is significant to note that in both the Ohio and

New York cases I have cited, ingenious criminals were able to import counterfeit medicine notwithstanding our current regulations

and border controls. It is my opinion that any lessening of those

regulations and controls will expose American consumers to an unacceptable level of risk.

Our experience with Viagra has been illuminating. It has lifted

the curtain and allowed us to see into a world of clandestine drug

manufacturing that we might not have otherwise discovered. It is

a world that couldn’t care less about regulatory and legal standards, good manufacturing practices, consumer health and safety, or

the affordability of prescription drugs. It is a world of sophisticated

and some not so sophisticated, organized criminal enterprises accountable to no one.

Other drugs are being counterfeited extensively, as some of my

testimony indicates. What we have learned from Viagra, though,

should be taken as a warning about what can happen and what is

happening with other products.

These stories demonstrate that notwithstanding current stringent border controls and importation requirements, counterfeit

medicines are a constant threat. There is no doubt in my mind that

as we sit here today and discuss the issue, criminals are attempting to figure out ways to get counterfeit medicine into the United

States.

This is organized crime in a real sense, and organized crime will

always seek out the weakest entry point in any distribution system. Any public policy measure that eases the current border controls simply makes it easier for criminals to target and exploit

American patients.

Mr. Chairman, thank you for the opportunity to testify before

this important committee. I look forward to answering any questions.

[The prepared statement of Mr. Theriault follows:]

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

The CHAIRMAN. Well, thank you, Mr. Theriault, and let me thank

all of our witnesses for what I think is very, very valuable and very

important information for all of us and to Congress to have before

us as we consider what to do with prescription drugs and how do

we go about handling this.

Mr. Theriault, your statement is a very strong indication of what

is happening out there in the real world. You know, taking counterfeit Viagra might embarrass you, but it is not going to kill you.

Mr. Roberts, your situation and taking counterfeit drugs instead

of the real product could have killed you, and for most pharmaceutical products, if you are taking a counterfeit product or a product that has ingredients in it that you may be allergic to or cause

additional health problems could, in fact, kill you.

Where were you getting the medicine? I mean, were you going

down to your local drug store and getting this? Are you getting it

over the Internet or mail order, or how?

Mr. ROBERTS. I receive quite a few prescriptions. I average about

14 to 15 prescriptions a month, and I was going to CVS Pro Care

Pharmacy in the Castro District of San Francisco.

The CHAIRMAN. So you were going to a regular drug store, a retail drug store, and giving your prescription to be filled, and what

you were getting was not the real thing.

Mr. ROBERTS. Right. The Pro Care Pharmacy is a system for people taking multiple medications and really need special attention.

So these are pharmacists who I do think spend a lot of time looking

at these particular drugs.

The CHAIRMAN. Do you know what happened to that drug store?

Are they still in business?

Mr. ROBERTS. Oh, yes. They are very much in business. It is a

large pharmacy. There are two main pharmacies, if you are getting

HIV drugs, that we tend to go to in that area or part of town, and

that is one of them.

I went back and asked them, about the counterfeit and they said

they had received a letter to recall anything they had on the shelf.

They had sent back the counterfeit that they had on the shelf,

identified by one lot number, although I do know that there were

at least two lot numbers of counterfeit.

The CHAIRMAN. Well, your testimony is very helpful. A lot of this,

my interest, is sort of from a legal standpoint. Was the drug store

getting it, do you know, from importing it from another country, or

where were they getting the supplies that were not real?

Mr. ROBERTS. That is a really good question. I don’t know, and

no one seems to be able to tell me.

The CHAIRMAN. Either Mr. Hubbard or Mr. Theriault, they may

not know this particular thing, but if a person is going to the drug

store and he is getting fake, counterfeit medicine from a retail outlet, where is it likely to be coming from? I mean, is that druggist

likely to be making up a batch of counterfeit stuff in the back room,

or is he buying it, in most cases, innocently from a supplier, or is

he trying to do it on the cheap by importing it? Is there a pattern

here?

Mr. HUBBARD. I would say this. There is not in the sense that

we see all permutations.

79

This product was brought in, in bulk from a foreign source, and

then made in a back room of a pharmacy on Long Island. However,

there are other cases, I think the Viagra cases or others, in which

the pills are actually made in the foreign country and arrive here

either ready to go or unpackaged, but ready to be put in a bottle

with a label put on it. So we are seeing—— The CHAIRMAN. OK. Who is a likely contact or person that would

be importing the fake stuff? I mean, is there someone or a group

in the United States that knows that there is a contact in China

or some other foreign country that can get all of this fake stuff and

then they actually just buy it and import it?

Mr. HUBBARD. I think, again, our experience has been centered

that it varies. In some cases, a pharmacy may be the so-called bad

guy and he is going out and then seeking out this stuff, or in other

cases, it may be a wholesaler and a pharmacist is an innocent victim, as is the patient.

So I would not want to say there is any strong pattern in any

of these cases because we see every possible permutation.

The CHAIRMAN. Let me ask, I guess, Mr. Hubbard with regard

to the current state.

Congress in 1987 passed a Prescription Drug Marketing Act, and

that makes it illegal for anyone other than the original manufacturer to import a drug back into the United States. It is illegal to

import unapproved drugs, but FDA has a policy, apparently, and

I would like you to talk about that, that allows people to either go

to a foreign country and bring back a 90-day supply of prescription

drugs for their personal use.

Now, does the Act allow that, or is that just something that

someone created to say, ‘‘Look, the Act says it is illegal to do this,

but we are going to have a policy that allows you to do it’’?

Mr. HUBBARD. The 90-day issue, Mr. Chairman, goes back many

years. Imagine that Congress enacted what we think of as prescription drugs in the 1950’s, Senator Humphrey, and at that point, any

drug anyone got in a foreign country brought back was technically

illegal, but think about a couple vacationing in France and one of

them gets sick and goes to the local doctor and gets an antibiotic

and he is told to finish the 10-day supply. He arrives back in New

York with 5 days left, and he would say ‘‘I’ve got this drug,’’ and,

technically, FDA should take it away or say you can’t bring it in,

but, of course, the right medical decision is to let the person finish

the medication. For 40 or 50 years, that was really no problem.

That is all we ever saw.

Then, when the AIDS——

The CHAIRMAN. The situation is different today, isn’t it?

Mr. HUBBARD. It is very different, Mr. Chairman. It really started to happen when the AIDS epidemic happened in the 1980’s in

which there were no approved FDA-approved drugs. So people

would go to other countries to seek drugs, and the FDA at that

time attempted to carve out an exception to allow patients to bring

in a 90-day supply of a drug that is unapproved for which there

is no therapy in this country.

Now, again, I emphasize no therapy in this country. So, if you

had a treatment for a given disease already available here, you

couldn’t bring it in, but if you had a disease like a cancer or AIDS

80

that had no treatment, FDA would use its discretion to allow that

in. It is not in the law. It is just enforcement discretion on the

agency’s part, and that compassionate exception has been misinterpreted by many of the sellers of these drugs and say, ‘‘Well, FDA

will let you bring in 90-days worth. So feel free to go do that.’’ That

is really not true.

The bigger problem we have is so much of this is coming in, we

have so few people at the borders, that neither we nor Customs can

deal with them effectively, and so what tends to happen is it all

just comes in.

The CHAIRMAN. What would your concerns be to what we have

seen so much in the press where seniors who are desperate to get

drugs at an affordable price take these bus trips to Canada or to

Mexico and buy drugs on the street or in stores in these countries

and then bring them in? What would your concerns be, or advice,

to these type of bus trips?

Mr. HUBBARD. What we tell people when they ask, and sometimes at the border when they declare, is ‘‘You are taking great

risk here.’’ We do not, however, board those busses and attempt to

take drugs away from patients.

The CHAIRMAN. Why is it a great risk?

Mr. HUBBARD. Because we believe that they are much more likely to get a drug in a foreign country that is unapproved, unsafe,

ineffective, contaminated, subpotent, superpotent, or some other

way not the real drug.

The CHAIRMAN. Thank you, Mr. Hubbard.

Ms. Durant, I take it that if I am a senior citizen in this country

and I want to get drugs from overseas, I mean, there is a number

of ways. I can take the bus trip to Mexico. I can do a mail order,

I take it, from one of these advertisements that Mr. Hubbard had,

I guess, coming from Canada and just send them a check or a credit card and they will mail me the drugs.

I guess the third way, obviously, would be through an Internet

transaction where I can just order it over the Internet.

Would you discuss maybe the problems associated with monitoring each one of those? I mean, is one more prevalent now than the

others? Where is the biggest concern of the volumes coming in of

drugs that FDA has not approved coming in from overseas? Is it

Internet? Is it mail order? Is it bus trip-type operations?

Ms. DURANT. It is all of the above. Those are the three biggest

as opposed to other modes of transportation, sea cargo or air shipments, through normal air cargo.

If I had to venture the most overwhelming vehicle for Customs

and FDA, it would be the international mail, although it is all pretty daunting because there is just so much of it. There is a lot of

smuggling. There is a lot of misdescription. So, regardless of how

much advanced information we had, if it is smuggled, it would be

difficult to find, just because of the numbers.

But in the mail, which would result often from an Internet or

mail order transaction, we have so many millions of parcels. It is

so easy to smuggle small dosages, and we have the least amount

of targeting and automated targeting ability in the mail. We don’t

have advanced manifest information from the carriers, and it is

just overwhelming.

81

The CHAIRMAN. I appreciate your fact that it is overwhelming. I

mean, that is an important, important statement, and I agree with

it.

I would imagine that once that counterfeit product reaches the

drug store shelf or the supermarket that sells over-the-counter

drugs that it is almost impossible for Customs or for FDA to really

determine that that product is a fake, a counterfeit, unless someone gets sick, like Mr. Roberts, or doesn’t get better. I mean, because once it is on the shelf, Customs doesn’t run around drug

stores in America doing random testing on the products they sell.

I mean, you probably can’t do that.

Ms. DURANT. We actually don’t have that authority after it is released.

The CHAIRMAN. So, if you got a bad-actor drug store down there

on the corner in San Francisco or New Orleans or anywhere else,

once that person unscrupulously decides to order those products

from overseas and it hits the shelf and he starts selling it, unless

someone really gets sick, like Mr. Roberts did, it is going to get into

commerce.

Ms. DURANT. We have to get it at the border, that is true, when

it comes in, or it is in the commerce, and I guess with the FDA,

it is the same situation, except that if you have an investigation

or some evidence where we would open an investigation so that we

could——

The CHAIRMAN. Thank you, Ms. Durant.

We have to get to Mr. Wyden and let him have whatever time

he needs.

But we had debate on the floor of the Senate about the importation of drugs, and both the previous Secretary of HHS, Secretary

Shalala, and this Secretary Thompson of HHS—members have

said, ‘‘Look, we only want to let drugs come in that FDA can approve or guarantee are safe like we guarantee drugs in this country.’’

But as I understand it, both Secretary Shalala and this Secretary

Thompson have said that, look, FDA can’t do that because we can’t

go into the factories and the plants in foreign countries and watch

how they manufacture it, what their standards are, what the ingredients are, and follow that from the time it is put into that capsule

through the whole process of reaching this country. Is that the reason why you say we cannot certify that those drugs coming in from

foreign countries are not what they are supposed to be?

Mr. HUBBARD. That is correct, Mr. Chairman. Because we could

not go certify and look in the other countries, the bill that they

refuse to implement or decline to implement would have replaced

the normal quality control system with a testing process and with

a paper or so-called pedigree process that attempted to follow the

trail of the drugs, but both Secretaries found that the paper process

could be forwarded by faking documents and that you really

couldn’t adequately test these products, either economically or feasibly.

The CHAIRMAN. Well, some of our colleagues say Canada is our

friends, our neighbors, our colleagues and close associates, and we

have the highest amount of trade with Canada. Is that the same

concern with a country like Canada?

82

Mr. HUBBARD. Well, yes and no. I mean, if I were in Canada

today and got sick and got a prescription and went to a Canadian

pharmacy, I would feel fairly comfortable that I was getting the

real drug, but if you legitimized that and say to Americans, ‘‘Go to

Canada,’’ then the counterfeiters know that and they will say that

is where the money is.

We talked to the Canadians just yesterday. I talked to a dozen

Health Canada officials, and I said if this would have happened,

would you take responsibility for the safety of these drugs coming

to America, and they said absolutely not. Why would they? They

are not going to their citizens.

In fact, our own law has a provision called ‘‘import for export’’;

that if a drug comes here from another country that is unapproved,

just to put it in the tablet or the bottle or otherwise finish it and

then send it to another country, FDA doesn’t look at that because

it is not going to American citizens. So the same thing would apply

in Canada.

The CHAIRMAN. Ms. Durant, do you agree with that?

Ms. DURANT. Yes, I do.

The CHAIRMAN. Mr. Theriault, my last question is you talked

about the massive counterfeiting of Viagra, but, I mean, it is also

not just Viagra. It is also drugs that are very important to a person

as a cure of major illnesses and major diseases and also attempting

to be counterfeit as well. Can you give us some examples of other

type of products that the pharmaceutical industry has experienced

in the area of trying to be counterfeited?

Mr. THERIAULT. Yes, sir. In fact, the Viagra example, I think, is

a good one because it has really opened up some doors to let us see

what is going on in an illegal industry that we didn’t have insight

into before, and by that, I mean we have been able to find Viagra

in alternate distribution channels. By that, I mean we have found

it in black markets, and we have been able to test it easily to determine whether it was authentic or counterfeit. When we found it in

those black-market areas, we have also found other products packaged and ready for distribution in the U.S. system.

We had a case a couple of months ago in Thailand that originated with the purchase of Viagra over the Internet. We worked

with the Thai police officials, and they ultimately seized 80,000

counterfeit Viagra tablets at a factory in Thailand, but they also

seized over 2 million Valium tablets.

The police in Taiwan have been very aggressive in raiding illegal

drug-manufacturing sites, and they found counterfeit drugs from a

number of companies, ours and Glaxo and Bristol-Myers, a number

of companies.

To your point a moment ago about the product getting into the

country and then being indistinguishable to the consumer or anybody else, one of these bottles is counterfeit Viagra, the other is authentic Viagra, that was involved in the case I mentioned involving

Hong Kong. You can’t tell the difference between them. No one can

tell the difference.

We found counterfeit product in Russia recently that our laboratory in Groton had to test three times before they could distinguish

it from authentic product. That is how good these people are.

83

The point about Viagra is—and to Mr. Roberts’ situation—we see

Viagra because it is kind of out there in the open, but it is an indicator of how much activity is going on in this pharmaceutical counterfeiting world, and it is all a matter of money. They will counterfeit Viagra because there is money involved. They will counterfeit

the anti-AIDS drugs because there is big money involved. They will

counterfeit anything.

The CHAIRMAN. Thank you. I thank all the members of the panel.

Senator WYDEN. Senator WYDEN. Thank you, Mr. Chairman.

Mr. Hubbard, what are the penalties for counterfeiting now?

Mr. HUBBARD. We don’t actually bring a counterfeiting charge

when we and the FBI arrest people because there is usually a better and more effective fraud charge, but we and the Justice Department bring a series of charges against these individuals, mail

fraud, economic fraud, adulteration, and other charges, usually a

long list of things because we want to make sure we get the goods

on them properly.

Senator WYDEN. Are these people back on the streets selling

again fairly shortly?

Mr. HUBBARD. One of the most recent arrests and convictions, I

think, put the lady involved in jail for 61⁄2 years and a gentleman

for 25. So they won’t be back very quickly, but it is very resourceintensive, of course, to do these cases, and I certainly can’t say that

we catch every case. If, in fact, the counterfeiting is increasing,

that could be a problem.

Senator WYDEN. Mr. Hubbard, any way for a person to know the

website that they are ordering from today is a reputable one?

Mr. HUBBARD. No, there is not. There is one program——

Senator WYDEN. Would you say that that is a serious problem?

To me, you have got two problems with the web. First, there is

clearly some ripoff sites out there, and second, you have got this

problem with respect to documenting the chain of custody that I

touched on. Aren’t both of those very serious concerns with respect

to websites?

Mr. HUBBARD. I think that is right, Mr. Wyden.

I mean, a savvy patient might be able to track back to a website

to determine its legitimacy, but most consumers would not know

how to do that.

Senator WYDEN. Well, that’s the point.

Chairman Breaux and I took a look at these, Mr. Hubbard. The

chairman is one of the most influential people in the country now

in terms of health policy. I guess I am a humble soul, but I also

have been specializing in health for years, and the two of us can’t

tell the difference in these kinds of bottles. So I think it is fair to

say that the typical senior is not going to be able to crack a

website——

Mr. HUBBARD. That is correct, Mr. Wyden.

Senator WYDEN [continuing]. In terms of rooting out the ripoff

artists, are they?

Mr. HUBBARD. That is correct.

The CHAIRMAN. I can’t even read the words. They are too small.

Senator WYDEN. Mr. Hubbard, is there a correlation in your view

between low prices and counterfeiting? What I am trying to drive

84

at is whether if the price is so low, so low, should a senior be on

the alert that there is a higher possibility of a counterfeit.

Mr. HUBBARD. I certainly think if someone offered any of us

something that we knew the value of for an incredibly low price,

a car for a thousand dollars, a new car for a thousand dollars or

something, we would, hopefully, be alert.

I am not sure with drugs, people are as savvy, and senior citizens can be particularly vulnerable.

Senator WYDEN. The chairman and I teamed up on a port issues

hearing last week, and we were looking—and the Customs Office

has been very helpful at this—at trying to do more in terms of

point-of-origin efforts, to try to keep these products from coming

into the country. Is Customs trying, for example, to negotiate some

agreements with other countries to keep them from allowing these

ripoff products to come to our shores, Ms. Durant?

Ms. DURANT. Customs doesn’t have an active pharmaceutical

program like that. We take our direction generally from the FDA.

We can seize counterfeit drugs under our own law, and we have

had some success with our attaches’ offices working with foreign

countries and foreign enforcement agencies, particularly in Thailand, to help us in special operations, but we do not have a program of negotiating with other countries for foreign——

Senator WYDEN. Ms. Durant and Mr. Hubbard, do you think it

would be a good idea for our trade authorities to go after, in a very

aggressive way, these agreements with other countries to try to do

more to control these products at the point of origin?

We are doing that in virtually every other area. What is striking

is we don’t seem to be doing it in the pharmaceutical area, and it

would seem to me that our trading leaders ought to be pushing for

that.

Ms. Durant.

Ms. DURANT. Well, as I—the Customs——

Senator WYDEN. I am talking about from a policy standpoint.

Ms. DURANT. The Customs Service does not make trade policy,

but I will tell you that we support not——

Senator WYDEN. Right.

Ms. DURANT.—ever letting it get to our borders in the first place

in every arena, what we can do foreign—— Senator WYDEN. Mr. Hubbard, from—— Mr. HUBBARD. Certainly.

Senator WYDEN.—a policy standpoint?

Mr. HUBBARD. Yeah. I am afraid I am not qualified to really answer your question.

Certainly, we have worked as an agency with governments of

other countries that deal with these problems and ask them to help

us, and in many cases, they have, but I can’t really ask answer

your policy question.

Senator WYDEN. Ms. Durant, I was told that the Customs Office

had to reduce some of the other functions that it had been performing since September 11, to deal with what all of us regard as the

urgent priority with respect to the war on terrorism. Have you had

to reduce what you all are doing in terms of the work on counterfeit drugs since you had to put more resources into the war on terrorism?

85

Ms. DURANT. No. In fact, I think it is safe to say that because

we are looking at more things, we are finding more things in every

arena, including our mail divisions and couriers. It is the needlein-the-haystack theory, but we are doing more examinations, more

X-rays.

We reduced some of our more discretionary trade functions, some

potentials in tariff evasion that were not high-risk trade issues,

some technical violations. We did do some reductions in that area

to devote our resources to more of the up-front examinations, but

I would not say that we diverted resources from this problem.

Senator WYDEN. I hope not because my concern is, under the

Homeland Security Proposal, I don’t see how Customs is going to

be able to do all of these other issues that are so important, such

as addressing counterfeit medicine, with the budget that is being

proposed. Obviously, you are a very dedicated professional, and you

have figured out a way to keep this effort on track.

But I will tell you, as I look at the Homeland Security Proposal,

I don’t see how it is going to be possible to devote the kind of resources that are needed to this effort and still perform all of those

other functions.

The last area I want to get at is the question of some technologies that can help us root out these ripoffs, and let me ask you,

Mr. Hubbard, about this in particular. Clearly, the ripoff artists are

not technology simpletons. These are very savvy people.

What, if anything, are you all doing in terms of trying to find

technological breakthroughs? I mentioned some of the handheld devices and others that could be cost effective here. What are you all

doing, and does this avenue show any real promise?

Mr. HUBBARD. It certainly does, I think, show promise, Mr.

Wyden.

We have, first and foremost, been attempting to upgrade our

data systems, our computer systems, so that we actually know

what is coming in and where it is coming from and those sorts of

things. That is a basic thing.

We have also been looking at new technology to identify things

like tag-ins and other things. I can’t say any of those technologies

are ready to go into use, but I do believe there is a lot of interest

in the agency in trying to look to the future for that sort of technology. There will likely be some funding issues for that, but I believe you are right that we ought to be looking to those sorts of new

technologies.

Senator WYDEN. The last question I wanted to ask the FDA is

you have got a chance now to speak to American consumers, you

have got a chance to speak to the public. What ought they be looking for? What should they know?

Mr. HUBBARD. Well, for those who buy drugs overseas, we have

been consistently saying you are really taking a great risk. You certainly risk your pocketbook, but you may be risking your health

and you may be even risking your life. So we urge people not to

buy these drugs or, if they do, to take whatever steps they can to

consult with a doctor or their pharmacist to make sure that they

are getting the real thing.

Senator WYDEN. Senator Breaux and I hear constantly from our

constituents. They will say, ‘‘Look, I went out to pay $20 in this

86

country from something I got in Mexico for $4 or in Canada for $2,’’ and we need to know what to tell them because these are people

who are hurting and these are people who are having to make

tough choices every single day, people who take three pills when

they ought to be taking four and then they go to two and then they

go to one. What should they know when they are trying to make

these choices?

Mr. HUBBARD. Well, I think, as I said, they have got to know

about the risk. Clearly, the cost savings are there. The cheaper

drugs are there.

We just have no way to say to a given consumer, ‘‘You have gotten a good product that will help, will save your life,’’ and we fear

that many people will get a bad product that will hurt them.

Senator WYDEN. How do you get that message out to consumers

now? What is the FDA doing to get that out to the public now?

Mr. HUBBARD. We have significant warnings on our website, as

Mr. Roberts mentioned. We are preparing brochures to put at the

border for those who travel to Canada or Mexico, and we do public

service announcements and other things to try to alert people to

these problems, but it is a tough sale because the lure of cheaper

drugs tends to get past the safety message at times.

Senator WYDEN. All right. Mr. Chairman, my sense is that this

is an area that we should be looking at in a comprehensive way.

Clearly, as we deal with the homeland security question, there is

going to be a real issue with respect to whether enough resources

are going to be devoted to this.

I think that the savvy consumer clearly can use some of the tools

that were mentioned today, but if you are an elderly person who

is hurting financially, you don’t have the technology at home, that

person is going to be a magnet for these kind of ripoff artists. I just

appreciate all of our witnesses really playing the role of Paul Revere here and trying to make sure that people understand what is

ahead.

I think the problem is going to get worse, given the difficulties

so many have in terms of affording these medicines, and I look forward to working with you to get colleagues on both sides of the

aisle to support a response that deals with the seriousness of the

problem.

The CHAIRMAN. I thank you very much, Senator Wyden, for your

questions and your comments. They are well taken.

I think the potential for a terrorist to see this as an avenue to

do grave damage to U.S. citizens, particularly the elderly, is certainly very, very real. This is a pipeline to American citizens that,

if they wanted to use it to do damage, this would be an easy way

to do it.

Mr. Roberts, I just have one question. Had you not found out

that what you were taking for your illness was counterfeit, what

could have been the consequences had you continued to take the

counterfeit drug?

Mr. ROBERTS. Because of the expense of Serostim, it really is a

last line of defense against HIV Wasting. So, if I hadn’t been stable

and I started to waste again or continued wasting and felt like I

had failed in the last drug, there would have been few options after

that. I probably would have continued to waste.

87

The CHAIRMAN. You could have died.

Mr. ROBERTS. Certainly, the HIV wasting is a major cause of

death in HIV cases.

The CHAIRMAN. Is there a greater awareness now in the community of the potential for counterfeiting these type of products?

Mr. ROBERTS. Some of the stories in San Francisco, they have

been in the local papers and magazines. The Boston Globe has run

a good series on counterfeit medicines, but I don’t think in general

the public that I am associated with, the HIV community, is even

aware of it. Anyone I get a chance to tell the story to, I certainly

do.

It is different than when a car part gets recalled. They seem to

track down the car owner and tell them, and there seem to be procedures or policies that allow people to be made aware of the recall.

In my case, there was no warning. There was no attempt to contact me. I just happened to ask my pharmacist.

The CHAIRMAN. That is a very good point.

I just had a product that had a recall that required me to bring

the vehicle in to do some minor maintenance work, and I didn’t do

it. I got another notice 6 months later saying, ‘‘We noticed that you

haven’t brought the vehicle in to fix this relatively minor problem,’’

but they kept tracking it because they knew there was something

wrong. But with a life-saving medicine that was counterfeit, you

never got that.

Mr. ROBERTS. No.

The CHAIRMAN. Well, thank you very much for traveling. You

have told the story, and I think that it has been very, very helpful,

hopefully to a lot of people, and I thank our Government witnesses

and Mr. Theriault for the private sector.

I think what we have learned today, hopefully, will be looked

upon by all Members of Congress as to the risk of counterfeit drugs

in this country, and I thank the witnesses for being with us.

Mr. HUBBARD. Thank you, Mr. Chairman.

[Whereupon, at 3:38 p.m., the committee was adjourned.]

(89)

A P P E N D I X

90

91

92

93

Æ