Business & Tech


Facing deadlines, drug makers move to beef up defenses against counterfeit medications

A FedEx-like track-and-trace system mandated by Congress is being phased in to protect the public against fakes.
A FedEx-like track-and-trace system mandated by Congress is being phased in to protect the public against fakes.

Most people trust that their medicine matches the description on the bottle. But what if it doesn’t?

Counterfeit drugs look a lot like the real deal, but can contain too little or none of the active ingredients that make a drug work. Or worse, a counterfeit drug can have toxic compounds.

The good news is that such events are rare in the United States, according to Connie Jung, senior policy adviser for the FDA’s Center for Drug Evaluation and Research.


“We believe that our supply chain is probably one of the safest in the world,” Jung said. “[But] we need to be vigilant. We want to protect the good stuff and minimize or keep the bad stuff out.”

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Sometimes the “bad stuff” gets through. Prescription drugs occupy a huge market — estimated at $323 billion in 2016, and growing — and are a lucrative target for those peddling fake medicines.

In 2012, the Food and Drug Administration discovered that cancer patients received a look-alike version of Roche’s Avastin that was a dud. Consumers have also gotten fake versions of the cholesterol-lowering drug Lipitor — the top-selling drug in pharma history.

The US government is cracking down on counterfeit drugs in the pipelines of drug makers, packaging companies, distributors, and pharmacies that deliver medicine to consumers — known as the drug supply chain.

In 2013, Congress passed the Drug Supply Chain and Security Act, also known as “track and trace.” The law requires companies to label each package of prescription medicine with a unique serial number and track that package’s movement at every stage — in effect, a FedEx-style approach for drugs.


The law is being implemented in three phases over 10 years. In the first phase, companies must show the FDA they can track large batches of medicine, known as lots, and maintain electronic records of these movements. Lot-level tracing has been in place since 2015.

Next, each drug package — including bottles, inhalers, and needles — must be labeled with a unique serial barcode, akin to those on the items at your local grocery store. This phase begins in November, but the FDA has delayed enforcement until 2018. Jung says that the grace period is due to industry feedback that generating these barcodes, stamping them onto each package, and storing the data will take time.

The third and final phase, to take effect in 2023, is for companies to track each package of medicine from when it’s made until it reaches the pharmacy. This level of tracking should make it easier to weed out counterfeit drugs.

“If a manufacturer determines that a product has been counterfeited, now they can tell FDA and the people that they sold it to,” Jung said. “Once you have a unique number, you’ll identify the counterfeits a lot quicker.”

Getting into compliance with track and trace will require major investments by members of the drug-supply chain. Eli Lilly has already poured over $110 million into safeguarding medicines such as its erectile dysfunction pill Cialis — a popular target for counterfeiters. And Dave Sternasty, vice president of corporate engineering at Lilly, says the company is on track to meet the upcoming deadline for serial barcodes.


“We’ve put a lot of effort into being able to serialize the packages,” Sternasty said. “It’s really important to us that our patients get the . . . medicines that they’re counting on.”

‘If a manu-facturer determines that a product has been counter-feited, now they can tell FDA and the people that they sold it to.’

In some cases, companies don’t already have the know-how to meet the new requirements. That’s where third parties like TraceLink come in. TraceLink offers cloud-computing software to help companies create unique serial codes and relay product information from one member of the supply chain to the next. The company works with over 600 clients in more than 20 countries.

“In working with a company, we’re not just going to work with your [systems],” said Brian Daleiden, cofounder of TraceLink. “We’re going to work with you to identify every . . . connection between you and every network partner.”

The FDA has regularly held public meetings for companies to discuss the upcoming track and trace requirements. And it’s creating a pilot program for companies to test different solutions. The program is open for public comment on what the focus of the pilot projects should be and has gotten input from a wide range of stakeholders, including Novo Nordisk, TraceLink, and the American Pharmacists Association.

The United States isn’t the only country cracking down on counterfeit drugs. China, Turkey, Brazil, Argentina, and the European Union all have new regulations — though details vary from country to country.

“The biggest challenge is the global harmonization of standards,” said Lilly’s Sternasty. “We are working with a number of different countries and regulatory groups — each have their own requirements and specific timing.”

There has been a growing push in the United States for access to drugs abroad. Consumers and advocacy groups cite the need to reduce costs and provide patients with life-saving medications — some of which are not yet approved in the United States. But critics, including the FDA, point to safety concerns and say that other countries’ efforts to tighten their supply chains won’t eliminate these concerns.

“For counterfeits, you don’t know who made them. You don’t know how they were made. Someone may claim yes, these are made in a certain country. [But] you don’t really know,” said Jung of the FDA. “As a consumer, I would think you would . . . have some hesitancy if you didn’t have control.”

Jonathan Wosen can be reached at