Transcript Merck Global Security

Good Intentions – Bad Drugs
Washington, DC
Thursday, 10 March 2005
Robert D. Moore, Executive Director; Global Security Group
Merck & Co., Inc.
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In Perspective
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“Counterfeiting of Pharmaceuticals is now a global trade”
Source: Eye on Europe – Stockholm Network Autumn 2004
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“China…is an economic gorilla; its counterfeiting is turning into quite the beast
as well – yet slowing down the counterfeiters in China and elsewhere will take
heroic efforts…Counterfeiting thrives on…globalization itself. Globalization is
the spread of capital and know how to new markets.”
“Armed with digital technology, counterfeiters can churn out perfect
packaging”
“Financing comes from a variety of sources, including Middle East middlemen,
local entrepreneurs and organized crime”
Source: Business Week – 7 February 2005
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“New technologies are clearly providing the offense an advantage over the
defense”
Source: David Kay – Center for Strategic & Int’l Studies; Washington, D.C.
EPOGEN® / PROCRIT®
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110,000 counterfeit vials of EPOGEN®
reached market in 2002
 Used
to boost red blood cells in cancer pts
 Low-dose vial relabeled as high-dose
 Same vial, cap etc used
 Wholesaler purchased legal product, PROCRIT®,
and relabeled as EPOGEN®
 $22/vial vs. $445/vial
 $48,000,000 profit
Source: www.fda.gov
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Factors Leading To Increased Counterfeiting
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Well funded counterfeiters
 Organized crime, syndicates, illicit drug cartels
Varying degrees of intellectual property laws
Advancing technology to duplicate products and
packaging
Global economies and international commerce
Internet as a sales and marketing tool
Relatively light penalties
MONEY
Estimated earnings of $32- 46 billion per year
Source: WHO Fact Sheet No. 275 – www.who.int/mediacentre/factsheets/2003/fs275/en/print.html
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How Does It Happen?
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Interception of expired goods
 Relabeled to extend expiration date
Theft of authentic product
 Often relabeled to hide theft
Relabeled authentic product
 Change potency/dosage information
Generic materials marketed as authentic
Completely counterfeited
 Most often performed in parts
 May contain actual API at reduced concentrations
Pharmaceutical Criminal Distribution System
Stolen
Genuine
Products
Diverted
Product
Expired
Product
Adulterated
Product
Counterfeit
Product
Contraband
Distributor / Repackager
Government
Health
Systems
Pharmacies
Hospitals
Patients
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Export
Counterfeit Commerce
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Source: Merck Global Security
Source: Merck Global Security
Counterfeit Manufacturing
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Source: Merck Global Security
China: Tienam 2003
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China: Tienam (2003)
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England (2004)
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A small appliance store was found to be a front for
counterfeit pharmaceutical operation capable of
producing and packaging 500,000 tablets per day
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Used high tech tablet presses and blister packaging
machines similar to those used in the pharma industry
Authorities seized 580,000 counterfeit tablets and
raw materials for another 5.5 million tablets valued at
$11.5 million
Drugs were traced to countries all over Europe and
the Mediterranean
Despite 14 prior convictions, operator sentenced
to 5 ½ years in prison for copyright infringement
Source: www.timesonline.co.uk
Merck’s Strategy
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Clients
Sales
& Marketing Groups
Governments, Patients & Healthcare Providers
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Immediate Response
Evaluation Team
 Global
Security Regional Director
 Manufacturing Quality Assurance (Central)
 Manufacturing QA Legal Support (Central)
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Key Decisions
 Testing
 Investigation
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 Regulatory
Merck’s Strategy
Visual Inspection of Product
Source: Merck Global Security
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Source: Merck Global Security
Merck’s Strategy
CONCLUSIONS
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Counterfeit medicine is a challenging global problem
Incidences are increasing
Supply chain management is key issue
As counterfeiters become more sophisticated, the
methods and technologies to detect them need to
follow
Major pharmaceutical companies are aggressively
pursuing product security measures, as well as
detection capabilities, to assure the safety of the drug
supply
By it’s nature, the Internet is a commercial channel for
counterfeiters
Merck’s Strategy
CONCLUSIONS
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Manufacturers have:
Recognized criminal nature of this issue
 Responded by:
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Assisting government authorities
 Building structures to thwart counterfeiters
 Continued evaluations of supply chain security
 Dedicating resources, and
 Supported stronger penalties
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