The FDA is investigating a fake supply of the anti-cancer drug Avastin that made its way into U.S. doctors’ offices and medical clinics. The agency does not believe anyone was harmed by the counterfeit product. And it sought to reassure the American public about the safety of the medicines we take. But the fake-Avastin case follows similar ones involving the cholesterol drug Lipitor, a popular weight-loss pill and Viagra. And it has heightened concern that counterfeit medicine is a growing problem in the U.S. An estimated 80 percent of the active ingredients in U.S. medicines comes from overseas, making regulation more difficult. Diane and her guests talk about keeping the U.S. drug supply safe.
- Ilisa Bernstein acting director, FDA Center for Drug Evaluation and Research, Office of Compliance.
- Frank Palumbo executive director of the University of Maryland School of Pharmacy Center on Drugs and Public Policy.
- Heather Bresch CEO, Mylan.
- William Hubbard former associate commissioner for the Food and Drug Administration. .
- Gardiner Harris science reporter for The New York Times and author of the mystery novel "Hazard."
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. The global trade in counterfeit medicines is an all-time billion-dollar business. So far, it's not been a huge problem here in the U.S., but the FDA this week said fake vials of a widely used anti-cancer drug were found in California, Texas, and Illinois. Joining me in the studio to talk about safeguarding the U.S. pharmaceutical supply: Ilisa Bernstein of the FDA, Gardiner Harris of The New York Times, and Frank Palumbo of the University of Maryland.
MS. DIANE REHMI hope you'll join us, 800-433-8850. Send your email to firstname.lastname@example.org. Join us on Facebook or Twitter. Good morning to all of you.
MR. GARDINER HARRISGood morning, Diane.
MR. FRANK PALUMBOGood morning, Diane.
REHMNice to see you all. Ilisa, if I could start with you, tell us what the FDA knows about Avastin and the counterfeit version there.
DR. ILISA BERNSTEINWell, first, I want to assure people that our nation's drug supply is safe. And the counterfeit Avastin that was found really only affects a small percentage of the Avastin in the marketplace today. It was counterfeit version of a foreign version, and so, if a doctor were to purchase it from a foreign supplier, that's where the risk is. So -- but most of the Avastin in our U.S. drug supply today is purchased from legitimate sources and is genuine product.
REHMAs I understand it, these fake vials were sold to at least 19 doctors and clinics, including 16 sites in California, two in Texas, one in Chicago. I wonder how many patients received that drug. Do we know?
BERNSTEINWe don't know. We don't know the scope of this. We're still investigating. And -- but we do know that there were these doctors' offices that purchased from a foreign source that may include the counterfeit Avastin, so we sent out letters warning them, asking them to set aside that product and put it in a secure place so that we can further investigate it.
REHMHow did you -- how did the FDA discover this?
BERNSTEINWe heard about it from -- we were -- we got a tip from a foreign regulator, a foreign source and...
REHMIn Britain? England?
BERNSTEINIn Britain, yes, our counterpart in the -- in England, and we further investigated it.
REHMAnd when did the FDA first find out about it?
BERNSTEINWell, we first heard that there may be a situation late in December, and then we immediately contacted the firm, got more information, further investigated. We found out last week that it may be suspect counterfeit, and then we just got confirmation early this week, which is why we put the notices out.
REHMWhy does it take so long between hearing about this possibility and then putting out the warning?
BERNSTEINWell, we don't want to falsely alert patients, particularly cancer patients who already have other things that -- to worry about. So we acted very quickly, and it does take a little bit of time for the analysis to come back. And we were working with a firm -- Roche was the manufacturer -- in order to get their confirmation that it was a counterfeit with no active ingredient.
REHMAnd one final question. If you know someone who takes Avastin, how do you know they're getting the real thing versus the fake thing?
BERNSTEINWell, if they are concerned, they should go back to their doctor and ask their doctor, and the doctor can know where they got it. If they got it from a legitimate source in the drug supply, a licensed wholesaler, then -- and on our website, we actually have markings and information so that the doctors can look at the packages they have to see if they have legitimate or if they possibly have a counterfeit.
REHMIs it true that the fake box is in French and says Roche?
BERNSTEINYes. So if the box says Genentech -- so Roche and Genentech are the same -- they're the same company, but the version that's manufactured and marketed in the United States has a label Genentech. If it says Roche on it, then flags should be -- it should raise a red flag that they could possibly have a counterfeit.
REHMBoy, that's confusing since Roche is the manufacturer?
BERNSTEINYes. The -- in the United States, it's marketed by Genentech. Outside the United States, it's labeled as Roche. So it should be easy for people to tell. If they look at their package, it has foreign writing. It has French. If it says Roche on it, if it has certain lot numbers that we have listed on our website, then they should be concerned.
REHMIlisa Bernstein. She is acting director of the FDA Center for Drug Evaluation and Research, Office of Compliance. Frank Palumbo, some drugs, I gather, are more easily counterfeited than others. Why Avastin?
PALUMBOWell, Avastin is an injectable. Avastin looks like water. It's so easy for a counterfeiter to put something into a bottle that resembles a clear liquid. There's no technology involved other than making the replacement, and that -- that's what makes drugs like Avastin and Procrit and things like that's -- the injectable so easy to counterfeit. They basically have to come up with a label that looks like the original label. FDA has had numerous examples of things they've seized.
PALUMBOAnd, to some folks, it might be a little obvious, you know, the -- a misspelled word or something like that on the counterfeit. But they are pretty sophisticated folks, by and large, and can reproduce these things, get them into the drug supply, and that's where the trouble starts. But if I could just make one point...
PALUMBO...and I'd like to echo what Ilisa says -- I mean, I really don't want folks out there panicking that our drug supply is compromised in any big way. I think we'll always have counterfeit products with us at some point or another. I just think that, in the United States, the incidents of counterfeiting is very, very low. And then people go to their pharmacies for medications. I think they can still be confident that they're walking out the door with a product that is the product they're supposed to be getting.
REHMI, like you and like Ilisa, don't want to frighten people. At the same time, I do believe people need to be informed...
REHM...of the kinds of possibilities that are out there. Frank Palumbo is executive director of the University of Maryland School of Pharmacy Center on Drugs and Public Policy. Gardiner Harris, how safe is our prescription drug supply? In your work, you've come across numerous examples of counterfeits.
HARRISRight. Well, I think they're both right that, obviously, our drug supply is very safe. Having said that, it is outrageous that these examples seem to happen, and they happen with some regularity. And the reason that they happen is that we -- there are something like somewhere -- no one actually knows the number, but there are somewhere between 5,000 and 8,000 different drug -- drug wholesalers in this country.
HARRISAnd if you actually go online and look at the drugs wholesaler that sold to some of these clinics -- now, Beverly Hills Cancer Center is one of the clinics that bought this bogus Avastin. Beverly Hills Cancer Center is as fancy as it gets. It's a three-, four-story glass edifice in Beverly Hills, gorgeous building. You look at the building that sold this counterfeit Avastin to this glorious facility. It is a one-story thing in a one-stoplight town in the middle of Nowheresville, Tenn.
HARRISAnd you sort of have to ask yourself, what was going on at the Beverly Hills Cancer Center that they are actually buying French-labeled Avastin for their patients? And, of course, the reason this sort of happens is that they're -- these very small wholesalers are insinuating themselves into the drug system, in part, because of these -- you know, we've all heard about these shortages. They're going on a lot. And so a fair number of cancer centers are desperate to get one cancer drug or another. Doxil is in short supply.
HARRISWe just did another one last week about methotrexate is in short supply. These are vital medicines. And so some of these cancer centers, to get their vital medicines, are dealing with this gray market of these very small wholesalers who can sort of get them a little bit here and a little bit there when in -- when what they really should be doing is just dealing with, you know, Cardinal, McKesson, AmerisourceBergen. Those are the big boys. Those are the ones you know you're getting good stuff from.
HARRISAnd the fact that fairly, you know, incredibly reputable cancer centers are actually dealing with these sort of, you know, one-room wholesalers in a one horse town in the middle of Tennessee is truly unbelievable.
REHMIs it that these fake drugs are cheaper?
HARRISOh, absolutely. So the vial that we're talking about is a $2,400 vial of Avastin. And, you know, Frank was sort of talking about some of the other drugs, the IPO drugs. You know, that is also an incredibly expensive drug. There are -- you know, actually, I think -- Ilisa would know better, but I think most of the examples of fake drugs getting into the United States are usually pills, and it's usually because individuals themselves are buying these things from sort of supposed Canadian pharmacies.
HARRISAnd that's how a lot of the counterfeit medicines get in the United States. It's actually fairly rare for the injectables to come in. But -- and it's only these really expensive ones because it's only there that the money makes the difference.
REHMGardiner Harris, he is science reporter for The New York Times and author of the mystery novel "Hazard." We'll take a short break here. When we come back, we want to talk about the FDA's inspection of foreign manufacturing sites.
REHMAnd in this hour, we're talking about the importation, in some cases, but the -- also domestic manufacturer of fake drugs. Here in the studio: Frank Palumbo of the University of Maryland School of Pharmacy, Ilisa Bernstein, acting director in FDA Center for Drug Evaluation and Research, Office of Compliance, and Gardiner Harris, science reporter for The New York Times. Just before the break, we were talking about drugs coming in from Canada.
REHMJoining us now by phone, from Canonsburg, Pa., Heather Bresch, she is CEO of Mylan. That's a leading generic drug maker. Good morning to you, Heather. Thanks for joining us.
MS. HEATHER BRESCHSure. Thanks for having me.
REHMTell us about the generic industry's plan to help the FDA regulate overseas suppliers.
BRESCHSure. And I've had the fortune of listening in. I think you've had some great conversation this morning about the concern of counterfeit drugs. But I think, even as Gardiner was pointing out, you know, whether it's where these products are coming from or being imported from and the ability to, even on the injectable front, be even easier somewhat than solid oral dosage forms to have counterfeit, I think the important thing is it shows the vulnerability in our supply chain.
BRESCHAnd whether it's a counterfeit product or a product that you go to your local pharmacy, Walgreens, on the corner and get a product, you don't know, as the consumer, where that product is being made, manufactured and what facility it's coming to you from. So what the generic industry has done is stepped up to the plate for an industry-wide issue and has said that FDA needs the resources and the legal authority to ensure that all products being dispensed in the United States are held at the same quality standards no matter where they're made.
BRESCHAnd today, they don't have the resources. They don't have the legal standing or the authority to do that. They're being doctrined over a -- from a 1938 law that's completely antiquated and dealt with the domestic agency and a domestic industry. Today, I -- as all of you know, our industry is extremely global, and, therefore, it's extremely vulnerable to all of the issues you've been discussing this morning because, first and foremost, it's not being policed.
REHMI gather you'd like to create some parity between domestic and foreign inspections of drugs.
BRESCHThat's exactly correct. The -- if you are a manufacturer in the United States, you're held to the FDA giving you a good manufacturing practice inspection every two years. So, please, remember that your facility can have passed a good manufacturing practice, or GMP as it's referred to, inspection, but it's only good for a period of time. It's not good forever. So, one, FDA needs to at least have an initial inspection. They also need the ability on a reoccurring basis to come back and do a health check of that facility.
BRESCHRight now, our FDA doesn't even have the ability to do a baseline inspection for many of these facilities, might less be able to come back on a reoccurring, consistent pattern and inspect foreign facilities. I can tell you as the largest generic manufacturer in the world headquartered out of the United States, we have many facilities within the U.S. and many facilities outside of the U.S. that are serving the U.S. marketplace. And our U.S. facilities are certainly inspected with much more frequency than any of our facilities outside the United States.
REHMDo I understand that the generic industry wants to give the FDA $300 million a year for five years to give them resources to increase foreign inspections?
BRESCHYes, we negotiated -- the industry negotiated a package with the FDA that would give them, to your point, 300 a year, $1.5 billion over the next five years to bring that parity. So there are metrics in place that the FDA have to meet to continue to receive that funding, but it brings parity. It brings the ability to get safe, effective and affordable medicine to the market even that much faster. But it's not competition at any cost.
BRESCHRight now, I believe, in this country, we are obviously the most open marketplace in the world, but we are sacrificing quality and safety for competition. And we believe you don't have to do that. We can still have a very competitive, robust marketplace, but it can be at -- not at the cost of quality and safety. And, right now, we're having competition at any cost in this country.
REHMYou referred to the FDA's 1938 law. What is it about that law that the generic industry wants to change?
BRESCHWe want to change the 1938 law, which was very domestic in nature. You know, as you certainly can understand, back in 1938, our legislators were not contemplating the global marketplace that we have today. Today, in 2012 and certainly beyond, we are a global industry. Forty percent of products being dispensed in the United States come from overseas. Eighty percent of the materials to make those products come from overseas. So we are extremely global.
BRESCHThis marketplace is receiving products from all over the world. The law needs to be updated to a global standard, so FDA will have the ability to not only have the resources and the personnel to be able to inspect these facilities. They need to have the legal standing to be able to not allow these products to come into the United States today. The FDA cannot withhold a shipment, an import coming in to the United States, unless they can prove that it's not been made under good manufacturing practices.
BRESCHIf they're not even allowed into the facility or don't even know where the facility is, there's no way for the FDA to prove that they're not being manufactured safe and effectively, so they can't stop these shipments from coming in. We think that's just not acceptable for our consumers, for the safety of all U.S. citizens who are taking our products and relying on the FDA to ensure their safety and effectiveness.
REHMSo let me just clarify, from my own understanding, you're saying that U.S. companies are required to prove that our own drugs manufactured here in the United States are safe. But with foreign companies, once again, we have to prove that their drugs are bad in order to keep them out of the country. Is that correct?
BRESCHThat's correct. It's not -- the only thing I would correct, it's not the actual U.S. company. The FDA has the power and is governed because of this 1938 law to prove that if you're manufactured under the United States, you have to be safe and effective, made under GMP. Since that law does not stretch their authority overseas, they're left with a de facto situation, which is that they have to prove that drug's not safe and effective to come in. So it's almost the reverse.
BRESCHI mean, look at our legal system. You're innocent until proven guilty. From a drug's perspective, you're guilty until proven innocent in the United States, but if you're coming from overseas, you're innocent until proven guilty.
HARRISNot only that...
BRESCHIt's just the reverse.
HARRISDiane, as Heather says, the law also requires FDA to inspect domestic plants every two years, but says nothing about foreign plants. So the result is that FDA is actually on a rotation, where they only inspect foreign drug plants once every 13 years. They inspect one once every 27 years of foreign medical device plants. And, of course, the food plants, it would take them, at their present rate, 1,900 years to inspect all foreign food plants.
REHMI think Ilisa Bernstein wants to add to that.
BERNSTEINYes, thank you. And I think Heather hit it right on the nose, that globalization has and the global marketplace has created extreme challenges for not only FDA, but for industry as well. And we have been working -- we are -- have been a domestic agency working in a domestic marketplace, and everything has changed. And now, we need to be a global regulator working in a global marketplace.
BERNSTEINAnd so we need to be able to have the tools and have the resources in order to meet that challenge. And so, for example, what Heather was talking about for generics, we want to be able to level the playing field and have the resources to ensure that the products that people are getting and the generics are available in a timely way and are safe, effective and high quality.
REHMOne last question for you, Heather: How much does the counterfeit drug industry cost the U.S. pharmaceutical industry?
BRESCHI don't know that I have a number that would quote what counterfeiting costs, but I can give you this number. Pew had done a lot of work over what a facility requires to be operating under good manufacturing practices, and it's 25 percent of total operating cost for that facility. So what I would tell you -- again, back to more the American jobs, competitiveness -- everything we've been talking here about this morning is obviously the first most paramount issue, which is safety and effectiveness for our patients in this country and the medicine they're receiving.
BRESCHBut, second -- secondarily to that, the way the law, the 1938 law is written and the indirect consequence is that we are not being competitive. I'm not -- I can tell you that I have over 5,000 jobs in the United States. We are growing and adding jobs globally. I am disincentivized to even maintain the facilities and the jobs that I have here in the United States. I'm certainly disincentivized to add to them.
BRESCHYou look at United States having the second highest tax rate in the world, coupled with the almost de facto tax or tariff of your facilities needing to be in the shape that they are. And that's why I said it's almost competition at any cost. I can tell you at Mylan, all of our -- we hold all of our facilities to the same standard around the world wherever we're -- for whatever country we're making product for. Unfortunately, I can't speak to every other company in that same spirit.
REHMAll right. Heather Bresch. She's CEO of Mylan. That's a leading generic drug maker. Heather, thank you so much.
BRESCHThank you. Thank you for having me.
REHMIndeed. And, Ilisa, for example, if you discover that a particular plant in China is making a counterfeit drug, what can the FDA do?
BERNSTEINWhat we will typically do in another country is work with our foreign counterparts over there. They usually will have the tools and the ability to go into that plant or have access to information that it may be difficult for us to have because we may not have the ability or the authority to take what actions we can take here in the United States over in a foreign country.
REHMIlisa Bernstein, acting director of the FDA Center for Drug Evaluation and Research, and you're listening to "The Diane Rehm Show." As we look at this whole topic, Gardiner, it would seem that the Internet has perhaps exacerbated this whole problem.
HARRISWell, that's certainly true. And, you know, Ilisa said that they defer often to their foreign counterparts, which is sort of a nice thing to say but is actually fairly frightening in certain circumstances. I mean, the generic drug industry came to the table, in part, because, several years ago, there was counterfeit of heparin in the United States, which is an absolutely critical drug for surgery and other patients. And it was...
HARRISIt is a blood thinner...
HARRIS...used in surgery, and it's made, actually, from pig intestines. And, oddly enough, there are something like 300 million pigs slaughtered in China every year as opposed to about 60 million in the United States. So if you're looking for pig intestines, you pretty much have to go to China. But they were making a version of heparin that was so sophisticated that it passed, actually, a fairly good test, and it was not actually made from pig intestines.
HARRISNow, the FDA got onto this. The FDA started to investigate. The FDA wanted to go into these facilities in China. The Chinese government would not let FDA make its investigation. And, of course, when you get into China, you get into these situations where the government itself is involved with these manufacturers. And so it doesn't really work that the FDA defers to many of its foreign counterparts in places like China because...
REHMWhat about that, Ilisa?
BERNSTEINYeah. There are some situations where it is difficult. That is true. That's why you can't just rely on inspections. You can't just rely on the ability to actually go into another country. That's why we need other tools to prevent these types of products from...
BERNSTEINWell, like what Heather was saying, the ability for companies to prove that they're compliant -- that their products are compliant before they come into the country. Also, as here we're looking at the counterfeit Avastin, putting measures in place to make our own drug supply within the United States more safe and secure, working together with manufacturers and wholesalers and pharmacists to ensure that our drug supply is as tight as it can be so these types of products cannot get in, and so patients can be more confident.
REHMFrank Palumbo, what about those patients? How can they possibly know, picking up a drug from their favorite local pharmacy, that that drug has been thoroughly cleared not only by, you know, the government of origin but our own FDA? What signals do we have?
PALUMBOThat's an excellent question, and the short answer is they don't know. They have to rely on their pharmacy as having used a source of supply that's reputable, one of the three major wholesalers, as Gardiner mentioned, or one of the many six -- of the 6,000 secondary wholesalers whom -- in whom they have some confidence. I want to point out that, with regard to the secondary wholesalers -- because pharmacies buy things from them, and that comes in and that patients then take those drugs which gets here.
REHMBut why should they? Why should they be buying from...
PALUMBOWell, because many of them are legitimate. And, in fact, the states have been passing laws. We have about 20 states now that have passed laws that require wholesalers to undergo background criminal checks, to be inspected, to post bonds, and this is a relatively new thing for the states to do.
HARRISYeah, but the oversight is miserable, Diane. I threw a bomb at Ilisa here for a second. I'm going to throw a bomb at Frank because, you know, the oversight of pharmacy in this country is miserable. It's done by 50 different state pharmacy boards. There is no national oversight whatsoever. Many of these state pharmacy boards are horrible. They do not crack down on their members.
HARRISA lot of these little, small wholesalers that we're talking about are actually linked to a pharmacy because oftentimes these large wholesalers will be willing to sell to a pharmacy, and then it goes out the back door to a small wholesaler, and they sell it again.
REHMGardiner Harris, science reporter for The New York Times. After a short break, we will open the phones, take your questions, your email. I look forward to hearing from you.
REHMAnd it's time to open the phones. First, we'll go to Cleveland, Ohio. Good morning, Andrew. I gather you are a physician.
ANDREWYes. And I don't think they're addressing one of the most severe problems that causes people to go to foreign countries to buy medicine. I'm a doctor that uses benzodiazepines, so as are many specialists -- anesthesiologists, cardiologists for cardioversion, outpatient surgeries like oral surgeons -- and there is a nationwide, complete shortage of all the benzodiazepine drugs. You can't get any of them.
ANDREWThese are drugs that have been out for four decades, and they're necessary for both the merchant use and for controlling anesthesia. And since they've all become generic, all of a sudden, we can't get them. This is only something I thought that could happen in third world country. We are scrambling to find substitute drugs. And we are using drugs that we used in 1960 before they were developed because there is no manufacturer of these drugs at the present time.
REHMTell me why, Ilisa.
BERNSTEINYou know, the drug shortages at FDA is a high priority. We understand how patients are desperate to get these drugs, the benzodiazepine -- the oncology drugs that we're -- you're hearing about in the paper. The shortages are caused by a number of different factors -- economic, regulatory, legal, you know, quality issues -- that are happening at these plants. And -- but what we're doing at FDA is trying to do what we can in order to get companies to ramp up production when there is a shortage. We're trying to get them to fix the problems that they have at their facilities.
REHMIs there a profit motive here, Gardiner?
HARRISOh, sure. I mean, the doctor is talking about the Valium kinds of drugs. Those are the benzodiazepines. They've been around for 40 or 50 years. It's unreal that these are in short supply, just like the cancer drug methotrexate. It is absolutely a vital drug for treating certain kinds of childhood leukemia. It is very hard to find.
REHMSo what's happened to it?
HARRISWell, what's happened is that Heather's industry, the generic pharmaceutical industry, has merged so that there's now only really two or three giants across the world that are making nearly all of these drugs, maybe four or five giants. And when one of them has a problem because they've brought all of their manufacturing of many of these big drugs into sort of just a few facilities, if one of those facilities has a problem, it puts a huge number of other drugs into jeopardy.
HARRISPlus, you know, as Heather was talking about, the only thing that people shop on on generics is not quality because all generics can be automatically substituted by a pharmacist. So there's no -- there's nothing in it for you if you're a generic manufacturer to make sure that your quality is better than everybody else's because if the other person makes a cheaper drug than you, even if it's lower quality, the pharmacist will substitute. Why not? Because it's cheaper, and they'll make slightly more money on that.
HARRISSo what has to happen is that, first of all, I think that this new deal where FDA gets more money will hopefully bring quality up across the board in the generic drug industry so that they'll experience few of these widespread shutdowns. But I think there's also some talk among colleges and others to start some not-for-profit, you know, drug makers, perhaps. I mean, for some of these old vital medicines where there's never going to be that much profit, why not have some of these medical societies, you know, sponsor groups to actually make them themselves?
REHMAll right. Here's...
PALUMBOIf I could just add one thing, Diane.
PALUMBOYou know, I know that -- I don't disagree with Gardiner that there might be varying quality of some of these generics that are out there, but generics do have to meet a certain bar in order to be allowed on the market. I mean, we do have a 1984 law, the Hatch-Waxman Law that really says that, for all intents and purposes, they must be bioequivalent. That is that when you take the generic versus the brand name product, they need to get into your blood stream at approximately the same levels. And so we do have that. And technically, all generics must meet that in order to be marketed, so...
REHMBut if you've got fake ingredients...
PALUMBOWell, if they're fake, that's a different story. I mean, we're talking about several different things here.
PALUMBOWe're talking about shortages. We're talking about sloppy manufacturing. And we're talking about counterfeiting.
PALUMBOAnd sometimes they overlap, and sometimes they don't.
REHMHere's an email from Stephen in Allentown, Penn., who says: "I am scared to death when buying a generic drug over- or behind-the-counter when the label purposely does not say where the ingredients come from or who manufactured the product. Many times, the label simply says manufactured for Wal-Mart."
HARRISRight. Well, let's just sort of be clear here, Diane. Seventy-five percent of all prescriptions right now are generic. Many times, a lot of the big branded pharmaceutical companies are right now getting into the generics business. If you buy generic Lipitor right now, you're getting the exact same pill from the exact same manufacturing site as the branded pill. You're just paying a whole lot less. So trying to figure out which pills are coming off of which lines is basically impossible to do.
HARRISAnd so generics -- I'm a huge fan of you have to have generics. It's just that FDA has to be there to be able to assure that minimal level of quality that Frank is talking about.
PALUMBOAnd if I may add one thing...
PALUMBOI'm sorry. I'm sorry.
REHMJoining us now from Emerald Isle, N.C. is William Hubbard. He is former associate commissioner of the FDA. Good morning, Bill.
MR. WILLIAM HUBBARDGood morning. How are you, Diane?
REHMI'm fine, thank you. Are you confident that Congress will need to take the steps it needs to take to move FDA into a position where it not only provides the funding that FDA needs for oversight but also for getting into these other countries where fake drugs are being made and to combat this shortage of certain drugs?
HUBBARDNo, I'm not, Diane. I proposed legislation when I was at the FDA for over a decade, and I remember working over Christmas in 1999 with the Clinton White House in which we were telling Congress, this is going to be a growing problem. And since then, hundreds of thousands of people have died worldwide from counterfeit drugs. And the counterfeiters would dearly love to get into our market.
HUBBARDSo I'm going to take a less-reassuring tone than Frank and Ilisa and side more with Gardiner's point of view that we have a weak regulatory system. Let me give you an example, Diane. If I counterfeit a designer handbag, I'm subject to a 10-year jail sentence and a $2 million fine. If I counterfeit a drug, I'm only subject to a three-year jail sentence. Congress has simply not stepped up and dealt with this. (unintelligible)
REHMBut -- OK. Let me ask you something. You said thousands of people have died from counterfeit drugs. What evidence is there of that?
HUBBARDThere are a number of reports and studies by the World Health Organization and others, particularly in third world countries, that people are getting counterfeit malaria drugs, tuberculosis drugs, AIDS drugs. It's estimated that in China, the source of many of our drugs, 50 percent of the drug supply is counterfeit. So there's substantial evidence that overseas counterfeiting is endemic, and the counterfeiters would like to get into our market. And that's the issue, which is, is the FDA going to have the ability to protect our market?
REHMAnd what responsibility does the industry have as opposed to the government to ensure the safety of the drugs it sells?
HUBBARDWell, one of the things FDA is proposing to Congress is a requirement -- an ability to require a company to take more responsibility, as Heather said, to track the source, so that if that heparin that Gardiner mentioned is coming from some distant source in China, the company in China that receives it needs to know where it came from, and then the U.S. company needs to be able to track it all the way back.
HARRISWell, obviously Bill is agreeing with me. I mean, it is a serious problem. Let's make clear, the generic industry has stepped up to the plate. $300 million is 10 percent of their profits. It's a huge amount of money that they have decided to spend, and it's because the heparin scandal scared the bejeezus out of everybody. And so there is a clear effort on the part of the industry, but Congress, as Bill says, has to get involved so that Ilisa can do her job.
BERNSTEINYeah, thank you. Yeah, I agree. I think there needs to be more accountability in the drug supply chain, knowing where the manufacturers, knowing where they're getting their products, from where their suppliers are, who those suppliers are, not only upstream, what goes into the finished drug, but also downstream, where it's going in our nation's -- in our drug supply chain.
REHMIlisa Bernstein, acting director of the FDA Center for Drug Evaluation and Research, and you're listening to "The Diane Rehm Show." I want to take another call here from Essex, Conn. Bill, can you stay with us a bit?
REHMOK. Claire in Essex, you're on the air.
CLAIREThank you, Diane. Thank you for taking my call.
CLAIREI've been listening to the conversation for maybe half an hour. I don't know how long it's been going, but I only heard one reference to economics. And I'm wondering to what extent this whole problem comes from the inflated cost of drugs, brand name drugs that are put out by American pharmaceutical companies. I think somebody said that people are driven to take -- to buy drugs from abroad because they're cheaper.
CLAIREAnd we all know how successful and wealthy the pharmaceutical companies are, how much money they make, how much their shareholders profit from their -- and I know that the business of business is business and that what they want to do is to corner as much of the market as they can, though I'm listening to all of these concerns about the health and safety of people who take drugs that are imported from abroad.
CLAIREBut I'm wondering if there is another way to go about solving the problem, which is to make regulations that force the drug companies to charge reasonable prices for their brand name drugs.
HARRISNot going to happen. I mean, I think she's right that economics are clearly playing a role here. You know, the new entry-level price for cancer medicines now is -- last year it was $100,000, Diane, for a treatment course. You know, by next year, the new entry level -- so two or three...
HARRIS...years ago, it was $60,000. It's now $100,000. In a couple years, it's probably going to be $150,000. I mean, we, although, 75 percent of the medicines that we consume in this country are generic, that 25 percent, which are the branded, cost us 90 percent of the $310 billion that we spend on drugs annually. So we roughly spend around $285 billion every year on these branded pharmaceuticals.
HARRISAnd with the price going up and up and up, you're getting a bigger and bigger bang for your buck when you come in with a counterfeit. So it is a huge part of the problem, and no one has a solution for it.
REHMAnd let's go to Dallas, Texas. Good morning, David. You're on the air.
DAVIDOh, Diane, it's been a couple years since I talked to you last, and good to hear you again.
DAVIDI wanted to tell you, here, about 10 years ago, I was diagnosed with ulcerative colitis, which is similar to Crohn's. It's a digestive tract inflammation. And I didn't have health insurance, so, when I was originally diagnosed with it, I was taking the brand name Asacol. And the medicine worked great. Well, once I discovered that it was a dollar a pill and my hospital supply ran out, then I had to go to the Canada pharmacy.
DAVIDI was buying online. And the medicine that I got from the Canadian pharmacy didn't seem to be working as well. So I called the pharmacist in Canada, and he told me that the shell structure -- see, the medicine is supposed to break up by the time it gets into your colon, but the generic medicine was breaking up before it got in the colon. So it was basically ineffective, and I had to pry that out of the pharmacist's mouth.
DAVIDAnd I told him -- I said, well, how come they don't have a generic in America that I can buy? And he says because the drug manufacturer will change up one little enzyme or something and then renew the patent on it, but they can't get an American generic. But...
REHMBill Hubbard, do you want to comment?
HUBBARDYou know, Diane, I'm a retiree. And just yesterday, I received a mailing from a Canadian pharmacy. And so I did some quick research and found that they're actually in India. And that's the exact problem that the caller is talking about. There are people thinking they can get these drugs over the Internet that are advertised as safe and effective generics when many estimates -- at about half of these drugs about the Internet are counterfeit. So it's -- but they're driven by the price difference. That's why people are buying these drugs.
BERNSTEINYeah. I want to make two points. One, that the standards in the United States for generics and brand names are the same, so they have to meet the same criteria. So the -- if you're buying a generic, it is expected to work the same as a brand drug. Now, let me just get back to the buying drugs over the Internet because it's risky business -- that people are looking for cheaper drugs. But when you go online and you find a drug for less than the price that you can find in the United States, that should be a red flag.
REHMThey're going to Mexico for drugs.
HARRISRight. Have been for a long time.
BERNSTEINIt's -- the cheaper price should be a red flag because how are they making that cheap -- cheaper drug? Where is that coming from? What corners were cut? What's in it? We just don't know. And so people are really -- it's a buyer-beware situation when you buy drugs over the Internet, particularly if you're looking for that Canadian flag or, you know, thinking that it's just the same drugs that are -- they are friendly neighbors to the north we're getting. In fact, you don't know 'cause it's easy to make these websites, and you don't know where they're getting it for us.
REHMAll right. Here is a final email from Keith in Charlotte, N.C. He says, "I've heard two things this morning that seem dissonant. One, our drug supply is safe. The other, there is occurring some shortage of drugs. I am afraid, I believe, a shortage of drugs does not bode well to the safety of our drug supply due to the stresses that condition places on our supply system."
HARRISWell, that's exactly right, Diane. And, you know, we don't generally pull back and look at -- but, you know, we're all talking about these problems because the United States has an incredibly fractured health care system where there's a lot of people without insurance. They get desperate. They do desperate things, and that's why this is all caused.
REHMGardiner Harris, reporter for The New York Times, Ilisa Bernstein of FDA. You heard Frank Palumbo of the University of Maryland and William Hubbard, former associate commissioner for the Food and Drug Administration, thank you, all.
HARRISThanks for having me.
REHMAnd thanks for listening, all. I'm Diane Rehm.
ANNOUNCER"The Diane Rehm Show" is produced by Sandra Pinkard, Nancy Robertson, Denise Couture, Monique Nazareth, Nikki Jecks, Susan Nabors and Lisa Dunn, and the engineer is Tobey Schreiner. A.C. Valdez answers the phones. Visit drshow.org for audio archives, transcripts, podcasts and CD sales. Call 202-885-1200 for more information. Our email address is email@example.com, and we're on Facebook and Twitter. This program comes to you from American University in Washington. This is NPR.