Rising Drug Costs Create Concern About Drug Diversions

The diversion of medications from legitimate channels has increased as drug costs rise for both legitimate and illegitimate users. This, in turn, has resulted in more opportunities to obtain and sell diverted drugs through e-commerce and global trading channels. Although the diversion of narcotics and other controlled prescription medications has been getting much of the attention, there are many other ways medications leave the legitimate supply chain.

“Diversion is when a pharmaceutical product is illegally transferred from one market to another,” said Sebastian J. Mollo, MD, intelligence director for the Americas at the Pharmaceutical Security Institute in Vienna, Va. “This can take many forms, such as smuggling from one country to another or when transferred from institutional markets, such as Medicaid or Medicare, to the private market through fraud or illegal claim.”

Three Areas

This tends to break down into legitimate trade, gray market trade and illegal trade. The first is where the manufacturer of a product hands it off to a known wholesaler or distributor, who then gets it to the final customer. For the entire time, it is under the control of regulated and vetted entities that make sure it is not adulterated, that it is stored properly and that there is a high degree of certainty that the patient is getting a genuine product that is still efficacious.

“The gray market includes legitimate product, but you can’t be certain how it was handled during distribution,” said David Kent, vice-president and head of security at Sanofi North America, Cambridge, Mass. “It might have left the legitimate supply chain by any number of means and now is in the hands of the patient. You don’t know for sure if proper temperature, humidity or other factors that impact efficacy have been maintained.”

The third arm is illegal trade. This can take many forms, such as the counterfeiting of medications or the diversion and selling of narcotic drugs.

DEA and FDA Involvement

The Drug Enforcement Administration (DEA) and the U.S. Food and Drug Administration (FDA) look at different parts of the diversion problem. Under their enabling legislation, the DEA enforces the Controlled Substances Act and deals mainly with scheduled medications with varying potentials for abuse that are removed from the legitimate supply chain. The FDA is tasked by the Food, Drug and Cosmetic Act to grant pre-market approval to all drugs based on a demonstration of safety and efficacy for the intended indication, as well as to ensure compliance with federal regulatory standards for manufacturing quality, purity and potency of all approved medications.