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Fade to Black: Importation and Counterfeit Drugs

Published online by Cambridge University Press:  06 January 2021

Bryan A. Liang
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Americans rely extensively upon prescription medications to maintain health and quality of life. According to the National Center for Health Statistics, in 2002, at least 1.5 billion drugs were prescribed to patients in physician offices, 196 million in US emergency departments, and 140 million in outpatient settings. Almost two-thirds of visits to physician offices and hospital outpatient departments had at least one drug associated with the visit, and 7% of visits had five or more drugs. In 2004, US pharmacies dispensed over 3.5 billion prescriptions to patients. Estimates indicate that annual expenditures for prescription drugs in the US top $230 billion dollars each year—and there is every indication that these numbers will only increase.

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American Journal of Law & Medicine , Volume 32 , Issue 2-3 , June 2006 , pp. 279 - 323
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Copyright © American Society of Law, Medicine and Ethics and Boston University 2006

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References

Thanks to Shannon M. Biggs and James Class for assistance in preparing and editing this manuscript and Walter Burke for source materials. Disclosure: Professor Liang does not receive financial support from brand name pharmaceutical companies and does not have a financial interest in any of the medicines or manufacturers discussed in this article. The Institute of Health Law Studies is a member of Partnership for Safe Medicines, whose membership includes the Pharmaceutical Research and Manufacturers Association, the brand name pharmaceutical company trade group, as well as other groups such as the World Health Organization, the Council for Affordable Health Insurance, the Interamerican College of Physicians & Surgeons, the Latino Coalition, and the Kidney Cancer Association.

1 National Center for Health Statistics, Therapeutic Drug Use, www.cdc.gov/nchs/fastats/drugs.htm (last visited June 30, 2005).

2 Id.

3 IMS Health, U.S. Prescription Activity by Channel, 2004, http://www.imshealth.com/ims/portal/front/articleC/0,2777,6599_49695974_68913551,00.html (last visited June 30, 2005).

4 IMS Health. U.S. Purchase Activity by Channel, 2004, http://www.imshealth.com/ims/portal/front/articleC/0,2777,6599_49695983_69891354,00.html (last visited June 30, 2005).

5 See id. (indicating that there was an 8% growth in sales last year).

6 NATIONAL CENTER FOR HEALTH STATISTICS, U.S. DEP't OF HEALTH AND HUMAN SERVICES, CENTERS FOR DISEASE CONTROL AND PREVENTION, PUBL’N NO.2004-1232 , HEALTH, UNITED STATES, 2004 50-53 (2004), http://ww.cdc.gov/nchs/data/hus/hus04.pdf.

7 Id.

8 FAMILIES USA, COST OVERDOSE: GROWTH IN DRUG SPENDING FOR THE ELDERLY, 1992-2010 2 (July 2000), available at http://www.familiesusa.org/assets/pdfs/drugod852b.pdf.

9 Id. at 4. Since these estimates were performed in 2000, it is likely that cost will be even higher.

10 HHS TASK FORCE ON DRUG IMPORTATION, US DEP't OF HEALTH AND HUMAN SERVICES, REPORT ON PRESCRIPTION DRUG IMPORTATION 37-38 (Dec. 2004), http://www.hhs.gov/importtaskforce/Report1220.pdf. [hereinafter TASK FORCE]. Note that the only parties that can legally import drugs for domestic use are the manufacturers themselves.

11 See, e.g., Frankish, Helen, WHO Steps Up Campaign on Counterfeit Drugs, 362 LANCET 1730 (2003)CrossRefGoogle ScholarPubMed; Gibson, Liza, Drug Regulators Study Global Treaty to Tackle Counterfeit Drugs, 328 BRIT. MED. J. 486 (2004)CrossRefGoogle ScholarPubMed; Rudolf, Paul & Bernstein, Ilisa, Counterfeit Drugs, 350 NEW ENG. J. MED. 1384 (2004)CrossRefGoogle ScholarPubMed; Wertheimer, Albert et al., Counterfeit Pharmaceuticals: Current Status and Future Projections, 43 J. AM. PHARM. ASS’N. 710 (2003)CrossRefGoogle ScholarPubMed; INTERNATIONAL COUNCIL OF NURSES, NURSES FOR PATIENT SAFETY: TARGETING COUNTERFEIT AND SUBSTANDARD MEDICINES (2005), http://www.icn.ch/indkit2005.pdf.

12 World Health Organization, Fact Sheet No. 275: Substandard and Counterfeit Medicines (Nov. 2003), http://www.who.int/mediacentre/factsheets/2003/fs275/en [hereinafter Fact Sheet No. 275].

13 Id. In some cases, such as drugs to treat malaria, up to 90% have been found to be fake. See Dr Shigeru Omi, WHO Regional Director for the Western Pacific, Talks at the Fifty-sixth Session of the Regional Committee, PR NEWSWIRE, (Sept. 19, 2005), available at http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/09-19-2005/0004109770&EDATE= .

14 Fact Sheet No. 275, supra note 12 (10%); Robert Cockburn et al., The Global Threat of Counterfeit Drugs: Why Industry and Governments Must Communicate the Dangers, 2 PLOS MEDICINE 0302, 0302 (Apr. 2005), available at http://medicine.plosjournals.org/archive/1549-1676/2/4/pdf/10.1371_journal.pmed.0020100-S.pdf (15%).

15 “Shell pharmacies” have been used to illegally buy and sell drugs, illustrating the ease by which systems may be penetrated for inappropriate means. See, e.g., Denise Kalette, Florida Authorities Arrest 10 in Massive Internet Drug Sweep, DAYTONA BEACH NEWS, July 16, 2005, available at http://www.americaputmeoutofbusiness.com/news-july-16-05-001.php (describing Internet pharmacy selling millions of dollars of drugs illegally after creating shell pharmacies).

16 World Health Organization, Essential Drugs and Medicines Policy (June 28, 2004), http://www.who.int/mediacentre/factsheets/fs275/en/.

17 See FDA Kicks Off Crackdown on Rising Rate of Counterfeit Drugs: Recalls of Bottles of Fake Lipitor Highlights Problem Infecting Nation's Medicine Supply, CHARLESTON POST & COURIER, July 17, 2003, available at http://www.medicalhelpnet.com/forums/viewtopic.php?p=6996

18 Federal Authorities Cease Sale and Distribution of Counterfeit Lipitor, FDA NEWS, Aug. 31, 2005, available at http://www.fda.gov/bbs/topics/news/2005/NEW01228.html

19 TASK FORCE, supra note 10, at 13.

20 Don Oldenburg, Raising the Alarm on Counterfeit Drugs, WASH. POST, Apr. 5, 2005, at C9 (quoting most recent figures from the Pharmaceutical Security Institute).

21 Food and Drug Administration, U.S. Dep’t. of Health and Human Services, FDA Talk Paper T04-28: FDA Warns Consumers About Counterfeit Drugs Purchased in Mexico, (July 30, 2004), available at http://www.fda.gov/bbs/topics/ANSWERS/2004/ANS01303.html. [hereinafter FDA Talk Paper]. Drug purchases by US citizens from Mexico is particularly insidious. The focus over the border is now on pharmaceutical sales to US customers, virtually all medicines are available, and the appearance of those selling the product lend confidence to the transaction. See Matt Taibbi, Pill City, ROLLING STONE, Feb. 24, 2005, at 47 (describing journalist experience in obtaining medicines, including morphine derivatives, Ritalin, and other drugs, and experiencing “being ripped off … my battering average for counterfeits is about .350.”). Id. at 49. Additionally, one can purchase “medicines” that do not exist: the author of this article traveled to Tijuana, Mexico in February 2005, and asked for “generic Viagra”. All six pharmacies were able to sell this product. However, there is no such thing as “generic Viagra”. Further, medicines such as flu vaccine were also available. Upon purchase, the vaccine was at room temperature; yet flu vaccine must be kept refrigerated to maintain activity.

22 See FDA Talk Paper, supra note 21.

23 Frederik Balfour, Fakes!, BUS. WEEK, Feb. 7, 2005, available at http://businessweek.com/magazine/content/05_06/b3919001_mz001.htm.

24 Julie Appleby, Stolen, Counterfeit Drug Problems Rise, USA TODAY, May 10, 2005, available at http://www.usatoday.com/news/health/2005-05-10-counterfeit-drugs-usat_x.htm.

25 Associated Press, Counterfeit Drug Problem Getting More Attention, WWSB ABC 7, Aug. 7, 2005, available at http://www.wwsb.com/frameset.asp?page=http://www.wwsb.com/news/details.asp?id=32963 (last visited August 10, 2005).

26 Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. No. 108-173, 117 Stat. 2066 (codified as amended in scattered sections of 42 U.S.C.).

27 TASK FORCE, supra note 10.

28 Id. at 56 fig. 5.3.

29 This does not count other delivery mechanisms such as Federal Express, UPS, etc. See MARV D. SHEPHERD, DRUG IMPORTATION AND THE VULNERABILITY OF OUR PHARMACEUTICAL SUPPLY CHAIN, IMPROVING PATIENT CARE AND MEDICATION SAFETY, PROCEEDINGS OF THE NINTH ANNUAL ASHP MANAGEMENT CONFERENCE FOR LEADERS IN HEALTH-SYSTEM PHARMACY 8 (Oct. 18-19, 2004), http://www.ashp.org/practicemanager/LeadershipDev/2004LeadershipSummary.pdf.

30 TASK FORCE, supra note 10, at xii-xiii. Note that the Task Force report indicated middlemen would garner most of the savings; other analysis has also concluded that consumers will have limited savings associated with importation. See CONGRESSIONAL BUDGET OFFICE, ECONOMIC AND BUDGET ISSUE BRIEF: WOULD PRESCRIPTION DRUG IMPORTATION REDUCE U.S. SPENDING? (Apr. 29, 2004), http://www.cbo.gov/ftpdocs/54xx/doc5406/04-29-PrescriptionDrugs.pdf. Parallel import experience in Europe indicates similar pricing dynamics, with the parallel traders gaining the benefits of differential pricing. See, e.g., Kanavos, Panos et al., The Economic Impact of Pharmaceutical Parallel Trade in the European Union Member States: A Stakeholder Analysis (London School of Economics, Working Paper, 2004)Google Scholar, executive summary available at http://www.lse.ac.uk/collections/LSEHealthAndSocialCare/pdf/Workingpapers/executivesummary.pdf. Apparently, any savings that is occurring now is being reduced annually, perhaps on the basis of Canadian suppliers seeking economic rents from US consumers. See Theresa Agovino, Savings from Canada Drug Purchasing Fall, WASH. POST, Jan. 5, 2005, available at http://www.wtopnews.com/index.php?sid=380318&nid=106# (describing study by PharmacyChecker.com showing a drop of price discounts between Canada and the US from 38% in 2003 to 29% in 2004). Further, it is difficult to determine actual price differentials because of the varying methodologies being used to assess price, including assessment of prices charged by manufacturers, consumer prices, insurer/HMO prices, government prices, and the particular drugs chosen for comparison. See, e.g., Drabiak, Benjamin A., Reimportation of Prescription Drugs: Longlasting Relief or a Short-term Analgesic? 4 WASH. U. GLOBAL STUDIES L. REV. 135, 143-44 (2005)Google Scholar. Other factors are also involved, such as the litigation system differences between countries. See id. at 148-150.

31 Rudolf & Bernstein, supra note 11.

32 Cockburn et al., The Global Threat of Counterfeit Drugs, supra note 14.

33 Ben Hirschler, Criminals Make Killing from Fake Drugs, REUTERS HEALTH, Aug. 1, 2005, available at http://www.ucsfhealth.org/childrens/health_library/reuters/2005/08/20050801elin017.html (describing the ubiquity of counterfeit ‘lifestyle’ drugs).

34 Cockburn et al., The Global Threat of Counterfeit Drugs , supra note 14.

35 LEW KONTNIK, PHARMACEUTICAL COUNTERFEITING: PREVENTING THE PERFECT CRIME 2 (2004), http://www.fffenterprises.com/web_files/fff_wht_ppr_111804.pdf. Note that pharmaceutical manufacturing and labeling equipment is also available on Ebay; see, e.g., GLOBALOPTIONS INC., AN ANALYSIS OF TERRORIST THREATS TO THE AMERICAN MEDICINE SUPPLY 29-30 (2003), available at http://www.globaloptions.com/booktext2003.pdf. Ebay has been found to allow sales of counterfeit drugs such as steroids and Viagra. See The £4billion Car Boot Sale, NEWS & STAR (UK), August 20, 2005, available at http://www.newsandstar.co.uk/familylife/viewarticle.aspx?id=277293.

36 See Kontnik, supra note 35.

37 See generally U.S. Dep’t. of Justice, Professor of Opthalmology/Director of Occulo-Facial Plastic Surgery at University of Kentucky Charged in Fake Botox Prosecution (Mar. 22, 2005), http://www.usdoj.gov/usao/fls/BakerRobertMD.html.

38 Id.

39 Rudolf & Bernstein, supra note 11.

40 Catherine Wilson, Two Florida Men Sentenced for Drug Scam, AP NEWS, Aug. 29, 2003, available at: http://www.aegis.com/news/ap/2003/AP030846.html. See also Chris Hansen, Inside the World of Counterfeit Drugs, NBC DATELINE, June 4, 2006, available at: http://www.msnbc.msn.com/id/13137839/ (last visited June 11, 2006) (describing drug dilution case and broader problem of counterfeit drugs in the US).

41 See Charles W. Schmidt, Phony Pharm, MOD. DRUG DISCOVERY, Nov. 2002, at 27.

42 See Continuing Concerns Over Imported Pharmaceuticals: Hearing Before the Subcomm. on Oversight and Investigations of the H. Comm. on Energy and Commerce, 107th Cong. (2001) (Prepared Testimony of James Christian, Vice President and Head of Security, Novartis International AG). available at: http://energycommerce.house.gov/107/hearings/06072001Hearing267/Christian404print.htm (discussing additional deaths).

43 Ethylene glycol is the chemical name for antifreeze. The substance is sweet so detection of its presence in artificially sweetened cough syrup is almost impossible. See Agency for Toxic Substances and Disease Registry, Medical Management Guidelines for Ethylene Glycol, http://www.atsdr.cdc.gov/MHMI/mmg96.html (last visited Apr. 19, 2006).

44 Fact Sheet No. 275, supra note 13.

45 See Attorney General Sues Tampa Couple Over Fake Cystic Fibrosis Drug, FOX 35 NEWS, Apr. 8, 2005, http://www.wofl.com/_ezpost/data/14958.shtml.

46 See Elizabeth Cady Brown, Pharmaceutical Fakery: Counterfeit Drugs Threaten Patients’ Health, LONG ISLAND PRESS, June 9, 2005, available at http://www.longislandpress.com/?cp=188&show=article&a_id=4250; See also Oldenburg, supra note 20, at C9 (Discovery of an AIDS patient's fake growth hormone treatment after the injection left a burning sensation.). Small markets have also been found to sell tainted and counterfeit drugs, particularly in minority communities. See, e.g., Lisa Reyes, Prescription Drugs Sold Illegally, NEWS CHANNEL 14, July 20, 2005, http://www.news14charlotte.com/content/local_news/?ArlD=98236&SecID=2. Other recent examples of drugs that have been counterfeited include Lipitor, Procrit, Neupogen, Viagra, and Zyprexa. Packaging and materials were of high quality. See Rudolf & Bernstein, supra note 11, at 1385.

47 See, e.g., Susan Todd, Florida Man Admits Sale of Fake Lipitor, STAR-LEDGER (NJ), Feb. 10, 2005 (describing Lipitor salting by convicted cocaine traffickers).

48 Cockburn et al., The Global Threat of Counterfeit Drugs, supra note 14. See generally Liang, Bryan A., Parallel Trade in Pharmaceuticals: Injecting the Counterfeit Element into the Public Health, 31 N.C. J. INT’L L. & COM. REG. (2006)Google Scholar, forthcoming (reviewing issues of profits and low penalties for drug counterfeiters).

49 See, e.g., GLOBALOPTIONS INC., supra note 35, at 13-14, 69-70, 159-165 (2003); Celia Hall, Internet Fuels Boom in Counterfeit Drugs, TELEGRAPH (UK), Aug. 16, 2005 (“Much of the [counterfeit drug] supply comes from India and Asia and there are signs that the counterfeit medicines trade is linking up with organi[z]ed crime. ‘If people buy these drugs, they should be aware of the risk they are taking as well as being aware they may be supporting organi[z]ed crime or terrorism.'” (quoting Naeem Ahmed, head of medicines intelligence, UK Medicines and Healthcare Products Regulatory Agency)). Hirschler, supra note 33 (“given the low production costs[, counterfeit drug production] is a hugely lucrative trade and some criminals now prefer it to narcotics”); Mark Sherman, 87 Charged in Counterfeit Drugs, Money, Cigarettes, CHI. TRIBUNE, Aug. 22, 2005 (describing crime bust of counterfeit drugs, money, cigarettes, and consumer products); Gavin Phipps, Counterfeit Pills are Not Placebos: Many People Regularly Take Prescription Pills. Unfortunately, It is Quite Likely the Pills are Not What They are Supposed to Be, TAIPEI TIMES, August 21, 2005 (describing Taiwan's fake drug problem with up to 30% of some drugs counterfeit and involvement of organized crime).; and Elizabeth Thompson, Counterfeit Items Pose Real Threat to Public, MONTREAL GAZETTE, Sept. 6, 2005 (discussing influx of counterfeits into Canada, including counterfeit drugs, leading the US to place Canada on its watch list “in large part because the United States believes [Canada] is not doing enough to stop counterfeits at the border and [Canada] is being used as a transit point for goods destined for the U.S. market”). Further, Canada Border Services Agency officials do not have the right to search shipments for goods bearing a counterfeit trademark, nor can it alert the holders of the intellectual property rights there is an actual or potential trademark infringement. Id. See also INTERNATIONAL ANTICOUNTERFEITING COALITION, WHITE PAPER: THE NEGATIVE CONSEQUENCES OF INTERNATIONAL INTELLECTUAL PROPERTY THEFT: ECONOMIC HARM, THREATS TO THE PUBLIC HEALTH AND SAFETY, AND LINKS TO ORGANIZED CRIME AND TERRORIST ORGANIZATIONS (Jan. 2005), http://www.iacc.org/WhitePaper.pdf (describing product piracy effects, including counterfeit drugs, on US economy and public health).

50 See Jay Solomon & Gordon Fairclough, North Korea's Counterfeit Goods Targeted: US Seeks to Curb Illicit Business in Cigarettes, Drugs, Currency to Augment Diplomacy, WALL ST. J., June 1, at A4. It is interesting to note that at least one commentator indicates that drug companies should not subsidize undemocratic regimes through low drug prices. See Griffiths, Philip G., Dying for Drugs: Drug Companies Should Not Have to Subsidize Incompetent Governments [letter], 327 BRIT. MED. J. 7410 (2003)CrossRefGoogle ScholarPubMed.

51 Associated Press, FDA: Al-Qaida Could Poison Medicines, Aug. 12, 2004, http://msnbc.msn.com/id/5682351; Fake Drugs Are Real Dangers for U.S. Consumers, PRNEWSWIRE, Aug. 13, 2004, available at http://www.prnewswire.com/cgibin/stories.pl?ACCT=109&STORY=/www/story/08-13-2004/0002231340&EDATE= (last visited August 30, 2004).

52 Kerry Capell et al., What's in That Pill?, BUS. WEEK, June 18, 2001, available at www.businessweek.com/magazine/content/01_25/b3737153.htm

53 Id.

54 Id.

55 Id.

56 Id.

57 Id.

58 Id.

59 For example, estimates in Peru are that 15-20% of the drugs sold in the country are fake, stolen, or have expired. See Encarna Nunez-Diaz, Minsa Reports That 20% of Medicines Sold in Peru Are Counterfeit, WORLD MARKETS ANALYSIS, Apr. 14, 2005. Indeed, because of the limited enforcement budget, it is estimated that 30% of the 6,000 pharmacies in Lima, the capital, are unlicensed. Compounding the problem is that one-fifth of the medicines trade occurs in the “informal sector”, id., such as night markets and other non-standard, non-pharmacy locations. The notorious “triple frontier” area between Argentina, Brazil, and Paraguay is infamous for its counterfeiting activities in pharmaceutical and other products. See Martin Krause, A New Balance on Counterfeit Goods, TECH CENTRAL STATION, Aug. 22, 2005, http://www.techcentralstation.com/082105C.html.

60 18 U.S.C. §2320 (2000)

61 U.S. Food and Drug Administration, Protecting Consumers from Counterfeit Drugs, FDA CONSUMER MAG, May-June 2004, available at http://www.fda.gov/fdac/features/2004/304_drug.html; see also Stearn, Douglas W., Deterring the Importation of Counterfeit Pharmaceutical Products, 59 FOOD & DRUG L.J. 537, 549-550 (2004)Google Scholar (discussing ramifications of limited criminal penalties and extensive complexity to prosecute illegal importers).

62 See, e.g., L.A. Man Sentenced in Fake Viagra Case, ASSOCIATED PRESS, May 17, 2005, available at http://dailynews.muzi.com/news/ll/english/1363157.shtml?cc=25506 (man caught smuggling and manufacturing counterfeit Viagra given six months home detention and 2,500 hours community service as penalty).

63 Light punishments for counterfeiters have resulted in problems in the UK as well. See infra notes 90-94 and accompanying text.

64 Todd, supra note 47, at 60; see also Cristina C. Birondo, Drive vs. Fake Drugs, THE FREEMAN (Philippines), July 10, 2005, available at http://www.thefreeman.com/local/story-20050710-32228.html (describing Philippines's Councilor Arsenio Pacaña who warns that illicit drug lords have moved into counterfeit drug production).

65 See Bob LaMendola & Sally Kestin, Former Convicts Try a Safer Venture: Pharmaceuticals, SUN-SENTINEL (Florida), May 26, 2003, at 1A (outlining numerous cases of convicted felons obtaining state licenses to distribute medications and selling counterfeit drugs).

66 Bernadine Healy, Mean-Street Medicine, U.S. NEWS & WORLD REPORT, May 16, 2005, at 56.

67 GLOBALOPTIONS INC., supra note 35, at 21-22; Willard, Laura A., Allocating Responsibility for Counterfeit Prescription Drugs, 8 J. BIOLAW & BUS. 41 (2005)Google Scholar; Healy, supra note 66, at 56; Bette Hileman, Counterfeit Drugs, CHEM. & ENG. NEWS, Nov. 10, 2003, at 36.

68 Jeff Siegel, Secondary Wholesalers: The Ghost in the Machine, PHARMACEUTICAL COMMERCE, Dec. 27, 2005, available at http://www.pharmaceuticalcommerce.com/frontEnd/main.php?idSeccion=214 (noting that there are legitimate dealers in the secondary market, but that trading outside of these legitimate parties is the gray market that enables fakes to enter); See Jenn Abelson, CVS Takes Step to Keep Fake Drugs off Shelves: Firm Tightens Criteria for Picking Suppliers, BOSTON GLOBE, May 25, 2005, available at http://www.boston.com/business/articles/2005/05/25/cvs_takes_step_to_keep_fake_drugs_off_shelves/ (discussing secondary market and efforts of drug distributors to limit counterfeit drugs in supply chain); See also Mary Pat Flaherty & Gilbert M. Gal, Lax System Allows Criminals to Invade the Supply Chain, WASH. POST, Oct. 22, 2003, at A01 (noting all of the “big three” pharmaceutical distributors have been affected by counterfeit drug sales).

69 Kontnik, supra note 35, at 5-6; See Susannah Patton, Cracks in the Pharmaceutical Supply Chain, BIO-ITWORLD.COM, January 18, 2006, http://www.bio-itworld.com/newsitems/2006/january/11-18-06-news-supply-chain (discussing the trade of pharmaceuticals between numerous and often unknown sources in the secondary market); see also Flaherty & Gilbert M. Gal, supra note 68 (discussing the “numerous middlemen” who handle pharmaceuticals during their “circuitous route” and noting that even the “big three” distributors have unknowingly purchased counterfeits).

70 Kontnik, supra note 35, at 5.

71 See id.

72 Id. at 5-6. Note that some entities have indicated they will no longer accept drugs from wholesalers who use middlemen. Abelsen, supra note 68. Elliot Spitzer, the Attorney General of New York, has also opened investigations of wholesalers dealing in the gray market in a larger investigation into the safety of the medicines supply chain and presence of counterfeits. See Cardinal Health Gets Subpoena in NY Probe, REUTERS, Apr. 8, 2005, available at http://www.foxnews.com/story/0,2933,152867,00.html. Other wholesalers have been subject to investigations associated with illegally imported and fake drugs. See, e.g., Arons v. Rite Aid Corporation, No. BER-L4641-03, 2005 WL 975462 (N.J. Super. Ct. Law Div. Mar 23, 2005) (allowing plaintiffs to pursue individual claims against wholesaler and retailer who distributed fake Lipitor); Government Files Motion to Intervene in Drug Wholesaler's Lawsuit, ASSOCIATED PRESS, Apr. 7, 2005, available at http://www.contracostatimes.com/mld/cctimes/11334350.htm (describing federal government motion to intervene in lawsuit against Kansas City wholesaler for its role in selling fake Lipitor). For an overview of the complexities of the gray market and its impact upon counterfeit drug distribution and sale, see generally KATHERINE EBAN, A TRUE STORY OF COPS, COUNTERFEITERS, AND THE CONTAMINATION OF AMERICA's DRUG SUPPLY (2006).

73 See Joel B. Finkelstein, Drug Reimportation Situation is Shifting as Canada Could Cut Availability, AMERICAN MED. NEWS, January 24, 2005. Note that counterfeiters are also entering into the medical device market, including surgical supplies. See Bob LaMendola Firm Pleads Guilty in Sale of Potentially Tainted Product; A Hollywood-Area Company May be Hit With a $10,000 Fine, SUN-SENTINEL (Florida), Apr. 28, 2005, at 3B (describing company who purchased fake surgical mesh overseas and then resold to a distributor as one of the first cases of counterfeit medical devices in the country). See generally Liang, supra note 48 (reviewing challenges of counterfeit drug detection).

74 A case from China illustrates this tragically well. A father of a six year old girl died after receiving a fake hepatitis A vaccine; physicians repeatedly assured him that his daughter was fine even though she exhibited clinically worsening signs, turned purple and blue, and foamed at the nose and mouth. See Father Was Told Dying Daughter Was Fine After Illegal Vaccination, RADIO FREE ASIA, June 29, 2005, available at http://www.fra.org/english/news/social/2005/06/29/china_vaccinations.

75 For example, in one counterfeit drug case, only 10% of the fake drug was ever recovered; hence 90% of the counterfeit drug may have gone undetected to 25,000 cancer and HIV patients. See Flaherty & Gaul, supra note 68, at A01. Further, in some cases, the provider may believe that the patient is not being truthful when asked whether he or she is taking the drug appropriately, and attribute therapeutic failure to patient noncompliance. In addition, some fake drugs are made for asymptomatic clinical conditions such as high cholesterol levels, so that any therapeutic, or lack of a therapeutic effect is not noticed. As well, the placebo effect may result in clinical action, even though there is no active ingredient in the drug. See Shepard, Marv, Drug Quality, Safety Issues and Threats of Drug Importation, 36 CAL. W. INT’L L.J. 77 (2005)Google Scholar.

76 See, e.g., Gross, Joel S. et al., Autopsy Study of the Elderly Institutionalized Patient: Review of 234 Autopsies, 148 ARCHIVES INT. MED. 173, 173 (1988)CrossRefGoogle ScholarPubMed (describing findings that treatable illnesses are underdiagnosed); Szende, B. et al., Accuracy of Admission and Clinical Diagnosis of Tumours as Revealed by 2000 autopsies, 32A(7) EUR. J. CANCER 1102, 1102 (1996)CrossRefGoogle Scholar (describing diagnostic error rate in tumor related deaths verified by autopsy).

77 This may be due to embarrassment or stigma associated with a particular disease state or frustration with access to the care desired. See Jim Thomson, Chief Executive, Centre for Mental Health, Stigma? What Stigma? (Sep. 6, 2005) (edited transcript available at http://www.ehiprimarycare.com/comment_and_analysis/index.cfm?ID=100).

78 Note also that if the drug is a suspected fake, first, drug levels to test for the legitimate drug may not be available; and second, if attempting to determine if a fake material was used, one has to know what to test for—a daunting task with the plethora of substances used to create counterfeits.

79 Even well known cases where information and the fake materials are available present challenges to any investigation and prosecution. Governments may also attempt to suppress information about counterfeit drugs, including through false certification of these drugs, which also creates significant barriers to detection. See Cockburn et al., supra note 14 (noting that often broad information about detection and scope of counterfeits is not provided because of fear of the negative affects this will have on legitimate sales). Further, physicians and government officials may actually be compromised and be part of the illegal activity. See 12 Doctors Involved in Spreading of Fake Drugs, SUN STAR (PHILIPPINES), August 21, 2005, available at http://www.sunstar.com.ph/static/pan/2005/08/21/news/12.doctors.involved.in.spreading.of.fake.drugs.health.office.html.

Another related issue is that physicians have little tendency to discuss issues of medication costs with their patients, which avoids a substantive discussion of where to obtain legitimate drugs for the best price. See Alexander, G.C. et al., Physician Strategies to Reduce Patients’ Out-of-Pocket Prescription Costs, 165 ARCHIVES INT. MED. 633 (2005)CrossRefGoogle ScholarPubMed. There are, however, well-defined means by which physicians and others can educate patients regarding lower prices for drugs. See, e.g., Bryan A. Liang & Stephen H. Carson, A Physician's Guide to Helping Patients Obtain Medication Savings, SAN DIEGO PHYSICIAN, May 2005, at 23; Partnership for Safe Medicines, Safe Savings Brochure, SafeMedicines.org, http://www.safemedicines.org/resources/resources/safesavings.pdf; Partnership for Prescription Assistance, http://www.pparx.org (last visited Apr. 18, 2006) (describing the Partnership for Prescription Assistance as a program to join various players in the health care industry “to help qualifying patients who lack prescription coverage get the medicines they need through the public or private program that's right for them”).

80 See Luma Muhtadie, Fake-Drug Case: Huge Forensic Challenges, HAMILTON SPECTATOR (Ontario), July 16, 2005, at A01 (describing the unique challenges facing investigations into seven deaths associated with suspected counterfeit drugs).

81 Drug Importation - Top European Security Expert Warns US Senate Panel on Risks, MEDICAL NEWS TODAY, Apr. 20, 2005, available at http://www.medicalnewstoday.com/medicalnews.php?newsid=23168

82 “When people [in the US] think of counterfeits, they don't usually think pharmaceuticals … [But] [a]n entire range of products are counterfeited and some of them produce obvious health and safety issues.” Oldenburg, supra note 20 (quoting Darren Pogoda, Staff Attorney, International Anti- Counterfeiting Coalition). Note, however, that US citizens may be putting themselves at risk by traveling to countries that have a high level of counterfeits. This becomes more of a risk as increased numbers of Americans travel to countries such as India for medical care. See, e.g., Ramola Talwar Badam, Westerners Seek Cheap Medical Care in Asia, ASSOCIATED PRESS, Sept. 24, 2005, available at http://www.freenewmexican.com/news/32944.html (describing increased number of western patients who seek medical attention overseas).

83 See, e.g., Olenka Frenkiel, One Woman's War with Fake Drugs, BBC NEWS, July 12, 2005, available at http://news.bbc.co.uk/1/hi/programmes/this_world/4656627.stm (describing Nigeria's Dr. Dora Akunyili, the director of Nigeria's National Agency for Drug and Food Administration, whose sister died from fake insulin and whose country is filled with fake and sub-standard medicines that have killed adult and pediatric patients while noting the UK and US are not immune); Huge Amount of Fake Pills Seized, BULGARIAN NEWS NETWORK, August 5, 2005 (describing anti-organized crime police unit seizing 200,000 fake anti-headache pills); Henderson, Mark, It Would be Healthier for all of Us if Drug Companies Sounded Alerts on Counterfeits, TIMES (London), Mar. 19, 2005, at 5Google ScholarPubMed (describing conviction of counterfeiter who was found with over £6 million worth of fake medicines and a laboratory capable of producing half a million pills per day); Wandera Ojanji, Weak Medicine: Ever Wondered why Sometimes You Take a Drug but Your Condition Worsens Instead of Improving? Chances Are You Are on a Counterfeit Drug, STANDARD (Kenya), August 17, 2005, available at http://www.eastandard.net/archives/cl/mags/executives/articles.php?articleid=27417&date=17/08/2005 (reporting over 50% of all medicines in Kenyan market are counterfeits); Erick Wamanji, The Sh10 Billion Fake Drugs Rip-Off, ALL AFRICA, August 24, 2005, (describing “almost one out of every three people buying drugs from private pharmacies—even Government hospitals—are walking away with no more than plain water or chalk”). See also infra notes 84-105 and accompanying text (describing some European issues with counterfeit drugs). See generally Liang, supra note 48 (reviewing importation issues of parallel trade).

84 Patricia Barry, States Defy FDA on Drug Importation, AARP BULLETIN, Oct. 2004, available at http://www.aarp.org/bulletin/prescription/Articles/a2004-10-08-fda_importation.html.

85 Global Forum on Pharmaceutical Anticounterfeiting Calls for Increased Corporate Responsibility and a Framework Convention, EMEDIA WIRE, Mar. 21, 2005, at 1 available at http://pdfserver.prweb.com/pdfdownload/219649/pr.pdf (describing Second Global Forum on Pharmaceutical Counterfeiting, Paris, France, and noting the existence of “hugely divergent prices … which in turn allows counterfeit products to be introduced”). Switzerland has been subject to at least two major cases of counterfeit drug trafficking in the last three years, and has convened a Council of Europe meeting on the topic sponsored by the Swiss Agency for Therapeutic Products (Swissmedic). See Matthew Allen, Switzerland Joins Fight Against Fake Drugs, SWISSINFO, Sept. 20, 2005, available at http://www.nzz.ch/2005/09/20/eng/article6099293.html Note also that Europe has had similar problems with foodstuffs, which represent very much the same dynamic. For example, both Switzerland and Northern Ireland have reported illegally imported foods that are linked to organized crime and unsafe product conditions. See, e.g., Adam Beaumont, Illegal Meat Trade Sparks Health Fears, SWISSINFO, May 23, 2005, available at http://www.nzz.ch/2005/05/23/eng/article5799697.html; Illegal food import seizures rise, BBC NEWS, May 25, 2005, available at http://news.bbc.co.uk/2/hi/uk_news/northern_ireland/4579099.stm.

86 See COMMISSION OF THE EUROPEAN COMMUNITIES, COMMISSION COMMUNICATION ON PARALLEL IMPORTS OF PROPRIETARY MEDICINAL PRODUCTS FOR WHICH MARKETING AUTHORIZATIONS HAVE ALREADY BEEN GRANTED (Dec. 30, 2003), http://europa.eu.int/eurlex/en/com/cnc/2003/com2003_0839en01.pdf.

87 See id. at 12 (“It follows that the proprietor of the trade mark may not use his trade mark right in order to prevent repackaging when … the repackaging cannot adversely affect the original condition of the product.”).

88 In response to the growing issue of counterfeits, the Heads of Medicines Agency (HMA) has formalized a working group of European Risk Management Strategy to address pharmacovigilence and concern over counterfeit medicines. See EU agencies to take action on safety and counterfeiting, SCRIP PHARMACEUTICAL NEWS, July 19, 2005. Further, Maud de Boer-Buquicchio, Deputy Secretary of the Council of Europe in her opening speech to the Council of Europe seminar, Counteract the Counterfeiters! noted:

Let me summarize some facts about the counterfeit medicine situation in Europe:

  • WHO estimates that counterfeit medicines make up for 8% to 10% of the European pharmaceutical market and in some countries even as much as 12%.

  • Experts are convinced that counterfeiting medicine is on the rise in Europe.

  • Counterfeit medicines often appear so like the genuine product that neither healthcare professionals nor patients can detect which is the genuine product before using it. Hence, the patient undergoes the risk of using an ineffective, or less effective or even toxic compound not worth being called a medicine or worth the price the individual or the health-care system pays for it.

  • All categories of medicine are profitable targets for counterfeiters – so called lifestyle medicines as well as essential medicines like antibiotics and insulin.

  • Several indicators suggest that organised crime has found a currently lucrative and nearly safe business of counterfeiting medicines to generate resources for other criminal activities. Organised crime puts public heath and the health of individual citizens at stake, and aims at creating widespread corruption networks which hinder democratic and economic development and welfare. This also deprives the private sector of legitimate revenue.

Against this background, it is very worrying that there is no recognised central reference point in Europe entrusted with surveillance, trend analysis and policy recommendations in the field of counterfeit medicines. This situation helps the counterfeiters who can rely on lacking national and international co-operation information gaps in Europe. Even when they are caught, they far too often get away with administrative fines with no deterrent effect.

Maud de Boer-Buquicchio, Deputy Secretary General of the Council of Europe, Limiting the Risks of Counterfeit Medicines to Public Health in Europe by Adequate Measures and Mechanisms (Sep. 21-23, 2005) (transcript available at http://www.coe.int/T/E/Com/press/News/2005/20050921_disc_sga.asp>http://www.coe.int/T/E/Com/press/News/2005/20050921_disc_sga.asp).

89 Sam Lister, The £6m Secret Factory That Churned out Thousands of Fake Viagra Tablets, TIMES (LONDON), Nov. 27, 2004, at 9.

90 Id.

91 Id.

92 Id.

93 Counterfeit Zantac from Greece was detected in the UK in 1994. See GRAHAM SATCHWELL, A SICK BUSINESS 49 (The Stockholm Network, 2004)Google Scholar. Counterfeit Cialis and Reductil were detected in August and September 2004, respectively. See Department of Health, Medicines and Healthcare Products Regulatory Agency, Drug Alert Class 2 Medicines Recall (Action Within 48 Hours): Cialis 20 mg Tablets – Counterfeit Product (August 23, 2004), http://www.mhra.gov.uk/home/groups/is-md/documents/drugalert/con1002584.pdf (UK); DEP’T. OF HEALTH, MEDICINES & HEALTHCARE PRODUCTS REGULATORY AGENCY, DRUG ALERT CLASS 2 MEDICINES RECALL (ACTION WITHIN 48 HOURS): REDUCTIL 15 MG CAPSULES (SIBUTRAMINE) PL 0037/0327 – COUNTERFEIT PRODUCT (Sept. 2, 2004), http://www.mhra.gov.uk/home/groups/ismd/documents/drugalert/con1002582.pdf (UK).

94 An individual found selling £440,000 worth of counterfeit Viagra in the UK was sentenced to 150 hours of community service and £1,250 in costs by Isleworth Crown Court. See Viagra Faker Sentenced, CHEMIST & DRUGGIST (UK), July 2, 2005, available at 2005 WLNR 10561397.

95 Fake Lipitor has been found in the UK salted with real Lipitor. See DEP’T. OF HEALTH, MEDICINES AND HEALTHCARE PRODUCTS REG. AGENCY, DRUG ALERT CLASS 2 MEDICINES RECALL (ACTION WITHIN 48 HOURS): LIPITOR TABLETS 20 MG, ATORVASTATIN (AS CALCIUM TRIHYDRATE), PL 16051/0002 (July 28, 2005), http://www.mhra.gov.uk/home/groups/ismd/documents/drugalert/con2018023.pdf.; Sam Lister, Heart Pills Taken by Millions Recalled as Fakes are Found, TIMES (UK), July 28, 2005, at 2 (reporting statements by Nimo Ahmed, head of intelligence at the Medicines and Healthcare products Regulatory Agency, indicating that the discovery of the drugs which came from outside of the EU showed that counterfeit medicines could get into any supply chain, even the UK’s, which is one of the most difficult to penetrate). See also Celia Hall, Internet Fuels Boom in Counterfeit Drugs, DAILY TELEGRAPH (UK), Aug. 16, 2005, at 9 (“In the past year three counterfeit medicines have reached the public in Britain, having penetrated legitimate pharmacy outlets. They were fake Cialis, a drug for impotence, fake Reductil, a slimming drug, and fake Lipitor, a drug to lower cholesterol.”); Catherine Humble, Inside the Fake Viagra Factory, SUNDAY TELEGRAPH (UK), Aug. 22, 2005, at 11 (describing another discovery of fake Viagra and the unsanitary conditions for production of counterfeit medicines)Andrew Jack, Probe Ordered After Fake Drugs Find, FINANCIAL TIMES (UK), Aug. 16, 2005, at 3 (“The medicines regulator has launched fresh inquiries into pharmaceutical distributors after discovering a second batch of counterfeit anti-cholestoral drugs in two weeks. The agency said it had found new copies of Pfizer's best-selling drug Lipitor, which had been packaged for the UK market.”); Andrew Jack, Tackling Counterfeiters Who Make Pills in Cement Mixers, FINANCIAL TIMES (UK), Aug. 16, 2005, at 3 (“The World Health Organisation and other international bodies have called for greater efforts to tackle a problem which -- above all in the developing world -- is not only widespread but can be fatal: by failing to give patients the right medicines at best, and killing them outright at worst.”).

96 See Drug Importation -- Top European Security Expert Warns Senate Panel on Risks, Apr. 22, 2005, http://www.procosolutions.com/html/drug_importation.html. (quoting former detective superintendent and Association of Chief of Police Officers’ spokesperson Graham Satchwell on counterfeiting). Note also that there are other risks of using Europe as a source of medicines: foreign drugs may have the same name as US drugs but contain different ingredients due to differences in naming across borders. See Marilyn Chase, Buying the Wrong Medicine Overseas, WALL. ST. J., August 16, 2005, at D1.

97 See Julian Mount, Safer Pharmaceutical Distribution in Europe, in PROGRESSIONS 2005: THE ERNST & YOUNG GLOBAL PHARMACEUTICAL REPORT 15 (2004).

98 See SATCHWELL, supra note 93.

99 See PARTNERSHIP FOR SAFE MEDICINES, COUNTERFEIT DRUGS IN EUROPE FACT SHEET (2005), http://www.safemedicines.org/resources/europe.pdf (citing Claude Foquet, Increase in counterfeit goods seized in France, LES ECHOS, Mar. 22, 2005).

100 See Partnership for Safe Medicines, supra note 99 (citing Pharmaceutical Security Institute Memorandum, June 24, 2005).

101 Id.

102 Id.

103 See Epilepsy Action – News Archive, Conference Spotlights Medication Importing and Counterfeiting, Sept. 14, 2004, http://www.epilepsy.org.uk/news/archive/20040914.html.

104 Counterfeit Lipitor: Pfizer Urges UK Govt, EU Action Including a Repackaging Ban, PHARMA MARKETLETTER (UK), August 2, 2005, available at 2005 WLNR 12969838 (quoting Jim Thomson of the UK Centre for Mental Health).

105 See PARALLEL TRADE IN MEDICINES: RESULTS OF A SOCIAL MARKET FOUNDATION DISCUSSION SEMINAR 19 (Maclean, Niall ed., The Stockholm Network 2004)Google Scholar. See also Severin Carrell, IOS Investigation: On the Trail of the World-Wide Web of Fake Lifestyle Drugs, INDEPENDENT ON SUNDAY (UK), Jan. 18, 2004, at 8 (“Poland, Bulgaria and Turkey … . [A]re all poised to join the European Union, and are havens for illegal drugs factories and smugglers. Their long frontiers border countries such as Russia that are notorious for the ready availability of fake drugs.”); Severin Carrell, Over 50 Per Cent of Viagra Sold Online is Fake, INDEPENDENT ON SUNDAY (UK), October 3, 2004, at 14 (“Paypill.com, which claimed to be a London-based business, was exposed in January for selling counterfeit Viagra. It promised it would stop selling the drug. But after relocating from south-east France to Spain, Paypill again began selling tablets … Paypill reacted by closing down its website late on Friday – but continued to insist it bought its tablets from the same wholesalers that supply the NHS. It claimed: ‘We have never, ever knowingly sold counterfeit drugs.’”).

106 See Americans Don't Favor Drug Imports from Non-Canadian Countries; Details of Drug Import Bill Meet Stiff Resistance in All Quarters, with Older Americans, Women Most Strongly Opposed, U.S. NEWSWIRE, Mar. 8, 2005, http://releases.usnewswire.com/GetRelease.asp?id=44001.

107 Interestingly, there was more support for importation from Greece, Portugal, and Spain than from the European Union generally. See id.

108 See id. Other patient groups are also opposed to importation from Canada. See, e.g., William P. Bro, Canadian Drugs No Miracle Cure, SEATTLE POST-INTELLIGENCER, February 8, 2005, at B7 (describing the dangers of importation and the limitations on treatment development from the perspective of a cancer survivor).

109 Here again, surveys find disparate results. AARP claims wide support for importation under the Dorgan bill. See supra note 106. See also infra note 156 and accompanying text. However, another study indicates that seniors oppose importation strongly after being given details about the legislation. See Study: Seniors, AARP Members Have Serious Concerns with Rx Importation; Study Finds AARP Not Representing Seniors on Drug Importation Issue, U.S. NEWSWIRE, July 28, 2005, http://releases.usnewswire.com/GetRelease.asp?id=51045.

110 Marv Shepherd, What if Canada Says ‘No’ to U.S. on Drug Imports? USA TODAY, Dec. 29, 2004, at 13A (including information that Canada imports drugs from countries such as Ecuador, Singapore, India, Hungary, and China).

111 Andrew Johnson, Support for Drug Imports Varies: Medicines from Canada Favored, WASH. TIMES, Mar. 9, 2005, at C8. (“‘I think a part of what surprised us looking at the various bills that are being debated on [Capitol] Hill go beyond Canada,’ said Steven Gibson, vice president of government relations and public affairs for the Amyotrophic Lateral Sclerosis (ALS) Association. ‘That really hasn't been coming out through the media or the grass roots.’”).

112 For example, Illinois created the I-Save-Rx program, which is probably one of the most well known programs. See 27 ILL. REG. 10122 (July 7, 2003). Note that some Governors have suggested circumventing federal prohibitions through contracting with sovereign Native American nations, although this, too, is considered illegal. See Maggs, Amy J., Reimportation: Panacea or Prescription for Disaster, 18 BENEFITS L. J. 112, at n. 21 and accompanying text (2005)Google Scholar.

113 It is interesting to note that state programs continue to expand the countries through which it will allow purchases, even countries that have experienced problems with counterfeiting and the polity appears resistant to allow. See, e.g. Pawlenty to Announce Prescription Plan Including Europe, WCCO ASSOCIATED PRESS, Mar. 15, 2005, available at http://wcco.com/consumer/local_story_074143827.html (describing Minnesota Governor Pawlenty's announcement to extend drug importation program to multiple European outlets); Pharmacists React to CanaRx Exploring Importation of Drugs from India: Bloomberg Article Reveals Canadian Internet Pharmacy is Considering Use of Drugs from Country Associated with Counterfeits, PRNEWSWIRE, Mar. 16, 2005 (describing CanaRx, supplier to the Illinois I-Save-Rx drug importation program that also supplies drugs to Missouri, Wisconsin, Kansas, and Vermont, which “‘has joined other Canadian Internet pharmacies in finding sources of drugs from partners in the U.K., Continental Europe, Israel, Australia, and India.’ India, according to a study by the Temple University Center for Pharmaceutical Health Services Research, is the worldwide leader in the production of counterfeit drugs with as much as 35 percent of the world's counterfeiting originating from that country.”).

In addition, state representatives in some cases have not actually secured permission of the country's government, nor addressed significant legal issues. For example, the I-Save-Rx program announced it had expanded its scope of pharmacies in the program to Australia. However, program officials did not speak to the Australian government nor doctor groups; exporting Australian domestic drugs subsidized by the government is illegal, and physicians must write prescriptions for Australian pharmacies to be able to dispense medicines—something they will likely resist because they do not see the patient. See Mark Coultan, Bitter Pill Poppers Cut Costs, SYDNEY MORNING HERALD (AU), July 20, 2005, available at http://www.smh.com.au/news/national/bitter-pill-poppers-cutcosts/2005/07/19/1121538975659.html?one.

114 See Canadian and U.S. Pharmacists Meet in Texas to Warn Against Internet Drug Sales, CAN. PRESS, Apr. 7, 2005. Note that both Texas pharmacists and Canadian pharmacists were vocal about their resistance to the state importation bill. See Texas and Canadian Pharmacists, State Legislator, Align to Fight Importation of Internet Drugs, PR NEWSWIRE, Apr. 5, 2005. The FDA considers such Canadian purchasing programs in violation of federal law. The Texas Board of Pharmacy will not act upon the legislation until it receives an advisory opinion from the state Attorney General. See Canada Prescription Drug Law on Hold, AP ALERT – TEXAS, Aug. 31, 2005.

115 See Testimony of John Theriault, Before the U.S. Dep’t. of Health & Human Services Importation Task Force (Apr. 5, 2004), available at http://www.hhs.gov/importtaskforce/session2/transcript.html) [hereinafter Theriault]; Coroner Probes Five Deaths in Pharmacy Investigation, CBC NEWS, June 23, 2005, http://toronto.cbc.ca/regional/servlet/View?filename=to-pharmacy20050623.; Muhtadie, supra note 80; Pharmacist Charged in Counterfeit Drug Case, GLOBE & MAIL, Sept. 10, 2005, at A15 (describing criminal charge against a pharmacist in Canada for dispensing counterfeit drugs to patients that has resulted in five patient deaths). See also Ontario Pharmacist Charged After RMCP Seize Bootleg Viagra from India, BROADCAST NEWS, Sept. 27, 2005 (describing sale of fake Viagra in Canada and raising concerns about safety of Canadian drug supply).

116 See TASK FORCE, supra note 10, at 60-61 (“Health Canada does not assure that products being sold to U.S. citizens are safe, effective, and of high quality, and does not intend to do so in the near future.”).

117 See Id.; World Health Organization, supra note 16; Clark, Christine, British Pharmaceutical Conference 2003: Counterfeiting, 271 PHARMACEUTICAL J. 453, 454 (2003)Google Scholar; Bill Kirven, Drugs from Canada are No Bargain, ROCKY MTN. NEWS, January 17, 2005, at 44A (“Canada isn't a willing player in the reimportation game. ‘The government of Canada has never stated that it would be responsible for the safety and quality of prescription drugs exported from Canada into the United States,’ Canadian Health Minister Ujjal Dosanjh said in November.”). See also Shepherd, supra note 110; Maine and Canadian Pharmacists Join Hands to Fight Importation Programs That Threaten Patient Safety, PR NEWSWIRE, Mar. 29, 2005 (“Drugs that enter Canada to be exported to customers in the United States are not subject to review or regulation by Health Canada. There is no guarantee that imported drugs are safe.”).

118 India and China produce a large portion of the world's counterfeit drugs. Other countries have had long experience with these countries’ fakes and have banned many drugs from these countries. See, e.g., Joydeep Ray, Pharma Firms Face Fake-Drugs Charge in Nigeria, BUS. STANDARD, Apr. 8, 2005, at 11.; Nigeria Blacklists 11 Indian Drug Companies, BUS. LINE, Apr. 6, 2005 (reporting that Nigeria has banned pharmaceutical imports from companies based in India, China, and Pakistan).

119 Shepherd, supra note 110. Note that World Health Organization figures indicate that 40 percent of medicines from Mexico are fake. See, e.g., Counterfeit Drugs Deemed Threat in Europe, AP ONLINE, Sept. 22, 2005.

120 Indeed, as Canadian Minister of Health Ujjal Dosanijh has stated, not only may it not wish to be America's drugstore, it physically cannot be. See The Honourable Ujjal Dosanjh, Can. Minister of Health, Health in a Global Society: A Canadian Perspective, Address at Harvard Medical School, Cambridge (Nov. 10, 2004) (transcript available at http://www.hc-sc.gc.ca/ahc-asc/minist/healthsante/speeches-discours/2004_11_10_e.html).

121 See Shepherd, supra note 110.

122 See id. See also Pharmacists Fault Maine Drug Reimportation Plan, MAINETODAY.COM, Mar. 31, 2005, http://business.mainetoday.com/news/050331.drugs.shtml (“How is a country with 30 million citizens going to be able to supply the prescription needs of a country with 280 million? Raiding Canada's medicine cabinet will not solve health care problems in the U.S.,” quoting Marc Kealy, Ontario Pharmacists’ Association).

123 See, e.g., Rosenfield, Todd A., Comment, The Counterfeit Drug Invasion: How Drug Re- Importation Unjustifiably Poses a Threat to the Health of the U.S. Public, 25 U. PA. J. INT’L ECON. L. 1047, 1067 (2004)Google Scholar (explaining that drug shortages, increased prices, and ironically, higher resultant prices to US consumers may result from importation). See also Christopher Conkey, States’ Bid for Cheaper Medicine Sputters, WALL ST. J., Feb. 14, 2005 (“Many Canadian pharmacies have had to buy supplies from fellow retailers at higher prices.”); Brian Ferguson, Alice in Borderland: Why Canadians Cannot Afford to be Complacent About American Drug Re-Importation, AIMS COMMENTARY 1 (Oct. 2004), available at http://www.aims.ca/library/reimportation.pdf (asserting that if drug importation is allowed in the US from Canada, US prices will not fall and Canadian prices will rise to US levels or supplies will be restricted resulting in shortages).

124 See Ban of Prescription Drug Imports in the Works, GLOBE AND MAIL (Can.), June 27, 2005, available at http://www.globetechnology.com/servlet/story/RTGAM.20050627.gtnats27-2/BNStory/Technology.

125 S.334, 109th Cong. (1st Sess. 2005), available at http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=109_cong_bills&docid=f:s334is.txt.pdf. (Co-sponsors include Sens. Snowe, Grassley, Kennedy, McCain, Stabenow, Chafee, Jeffords, Lott, Dayton, Clinton, Bingaman, Boxer, Conrad, Durbin, Feingold, Feinstein, Inouye, Johnson, Kohl, Leahy, Levin, Nelson, Obama, Pryor, Salazar, Sarbanes, Schumer, and Collins. The Dorgan bill has bipartisan support and the most cosponsors, making it the leading legislative vehicle.)

Note that there has actually been federal law allowing for importation. In 2000, the Medicine Equity and Drug Safety Act was passed, which would allow drug importation in the effort to reduce medication prices. 21 U.S.C. § 284 (2000). However, then-Secretary of the Department of Health and Human Services, Donna Shalala, de-implemented the statute. Secretary Shalala was empowered to do so if she could not certify that implementation of bill would “pose no additional risk to the public's health and safety”. 21 U.S.C. § 384(l)(1)(2000). Due to the inability of the Secretary to do so, the bill's importation provision was decertified. In addition, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 superseded the Medicine Equity and Drug Safety Act, and allowed for importation from Canada, again only if the Secretary could certify no additional risk to the public's health and safety. Pub. L. No. 108-173, 117 STAT. 206 (2003), No such certification has been made to date

The Pharmaceutical Market Access Act of 2003, H.R. 2427, 108th Cong. (2004), the Safe IMPORT Act of 2004, S. 2493, 108th Cong. (2004) and the Pharmaceutical Market Access and Drug Safety Act of 2004, S. 2328, 108th Cong. (2004) are recent, failed efforts to allow drug importation. The latter bill is virtually identical to the current S.334.

126 21 U.S.C. §§ 381-384 (2000).

127 S. 334 at § 4. See generally Liang, supra note 48 (criticizing Dorgan Bill).

128 Id.

129 Id.

130 15 U.S.C. §§ 12, 13, 14-19, 20, 21, 22-27 (2000).

131 S. 334, supra note 125, at § 4.

132 See Jazz Photo Corp. v. Int’l Trade Comm., 264 F.3d 1094 (Fed. Cir. 2001), cert denied, 536 U.S. 950 (2002).

133 Members of the Senate Health, Education, Labor, and Pensions Committee also had some concerns about safety within the bill. Sen. Gregg, former Committee chairman, “challenged [Sens. Dorgan, Stabenow, Snowe, and Vitter] on their legislation, saying it would make too many changes to existing food and drug law.” Kate Schuler, Drug Reimportation Hearing Allows Sen. Enzi to Drop Hints on Possible Legislation, CQ TODAY, Apr. 19, 2005 (“In a heated exchange with Snowe, Gregg pressed the issue of safety and grilled her on the changed that the bill would make to the current FDA inspection and approval system. ‘We have a system that works,’ Gregg said. ‘To stop into this area requires that we do it correctly, and I have serious reservations’ about the bill.”). Other experts were also wary. According to Graham Satchwell, a noted expert on pharmaceutical fraud in Europe, the bill would “not afford your citizens the protections they currently enjoy. As it stands, S.334 does not afford confidence that a drug from a ‘permitted country’ will have originated there or have been subject to appropriate regulation.” Top European Security Expert Warns Senate Panel on Risk of Drug Importation; Urges Congress to Learn from Problems Faced by European Union, PHARMALIVE, Apr. 19, 2005.

134 See S. 334 at 9-10.

135 See supra notes 67-87 and accompanying text (discussing EU and Canadian problems with counterfeit drugs). Countries that would immediately be allowed to provide imported drugs hence would include Austria, Belgium, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Luxembourg, The Netherlands, Portugal, Spain, Sweden, and the UK. Some of these countries, see id., have encountered significant problems with counterfeits. Indeed, testimony by John Theriault, Vice President for Global Security, Pfizer, Inc., before the Drug Importation Task Force noted that “With the exception of Italy and Luxembourg, counterfeit Pfizer products were found in each of the EU member countries, as well as in eight of the fifteen candidate countries (Bulgaria, Estonia, Hungary, Malta, Poland, Romania, Slovakia, and Turkey). Austria. Australia, Israel, Japan, New Zealand, Norway, Switzerland and South Africa are also among the countries where counterfeit Pfizer products were detected. Seizures in the Asia-Pacific region included counterfeit packaging not for the local markets, but for those in the U.S. and Australia.” Theriault, supra note 115.

136 See S. 334 at 10-11.

137 For example, Russia may be a country that fulfills this provision, as may China and India— countries that have legitimate pharmaceutical industries, but also have significant counterfeit medicines production. See, e.g., Moscow Police Bust Counterfeit Medicine Factory, MOSCOW NEWS (Russia), July 12, 2005, available at http://www.mosnews.com/news/2005/07/12/falsedrugs.shmtl (describing Moscow police bust of counterfeit medications which were sold in Moscow, St. Petersburg, and other regions).

138 See, e.g., Bryan A. Liang, Flaws in the U.S. Drug Safety System, S.D. UNION TRIBUNE, Nov. 29, 2004, at B7, available at http://www.signonsandiego.com/uniontrib/20041129/news_lz1e29liang.html

139 See Vioxx Concerns Spawn New FDA Drug Safety Board, NEWSTARGET, Feb. 28, 2005, available at http://www.newstarget.com/005048.html (last visited Mar. 1, 2005).

140 See, e.g., Arthur A. Levin, Science Under Attack by the Bush Administration, CENTER FOR MED. CONSUMERS (Nov. & Dec. 2002), http://www.medicalconsumers.org/pages/science_under_attack.html (“User fees also have provided Congress with cover for their historic underfunding of the FDA. The result is that the agency cannot adequately carry out many of the public protection duties that Congress has assigned it.”); Marwick, Charles, FDA Funding Problems Imperil Safety of Biological Products in the United States, 279 JAMA 899 (1998)CrossRefGoogle ScholarPubMed; Mark D. Uehling, A New Drug Safety Database for Pharma, FDA, ITWORLD.COM, (May 17, 2005), http://enterprisesecurity.symantec.com/industry/healthcare/article.cfm?articleid=5713&EID=0 (“Congress chronically underfund[s] the FDA's MedWatch drug safety program … .”).

141 See S. 334 at 12-13.

142 See id.

143 See id. at 13-14.

144 See id.at 18.

145 “(3) The exporter or importer obtained the drug—(B) directly from an entity that, by contract with the exporter or importer—(i) provides to the exporter or importer a statement … that, for the chain of custody from the establishment, identifies each prior sale, purchase, or trade of the drug ….” See id. at 23.

146 See On the Loose: Protect Yourself from Counterfeit Drugs, http://www.fraud.org/fakedrugs/faq.htm (last visited Apr. 18, 2006).

147 See Robb Miller, Tracking Papers Won't Help, USA TODAY, May 30, 2005 (indicating pedigree papers are easily forged, would impose high costs, and may result paradoxically in a false sense of security since they can be used to “wash” products to make them appear legitimate).

148 See S. 334 at 24.

149 Id. at 24.

150 See id. at 25. The duty of the Secretary of Department of Health and Human Services is to inspect and verify chain of custody. Id. at 31.

151 See id. at 26.

152 See id. at 27.

153 See id. at 36,41.

154 See supra note 35 and accompanying text.

155 Note that the number of inspections of registered exporters in the first year would be a minimum of 600 (12 inspections a year with a minimum of 50); see id. at 92. For the second year, a minimum of 1200 (12 inspections a year with a minimum of 100); the number of importers would be even greater, with at least 1200 the first year (12 inspections a year with a minimum of 100), and at least 2400 the second year (12 inspections a year with a minimum of 200). See S. 334 at 93-94.

156 See id. at 28-29.

157 See id. at 29-30.

158 See id. at 32.

159 See id. at 37.

160 See, e.g., Marcia Angell, What Ails the FDA? Payola, BOSTON GLOBE, Mar. 10, 2005; Fontanarosa, Phil B., et al., Postmarketing Surveillance—Lack of Vigilance, Lack of Trust, 292 JAMA 2647 (2004)CrossRefGoogle ScholarPubMed; Lawson, Gary W., Letter to the Editor, FDA Dependence on Drug Industry, 97 J. NAT’L MED. ASS’N 1039 (2005)Google Scholar; Alexandra Marks, How Drug-Approval Woes Crept up on FDA: Critics Charge Conflict of Interest in a System Where Pharmaceutical Giants Fund the Regulatory Process, CHRISTIAN SCI. MONITOR, Nov. 26, 2004.

161 See S. 334 at 36. The Bureau of Customs and Border Protection would be an optional beneficiary of such fees. Id.

162 See supra note 160 and accompanying text.

163 See S. 334 at 61-63.

164 Excipients are the non-therapeutic materials within the drug. See Thomas A. Wheatley, What Are Excipients?, in EXCIPIENT TOXICITY AND SAFETY (Myra L. Weinger & Lois A. Kotkoskie eds., 1999).

165 See, e.g., Akers, M. J., Excipient-Drug Interactions in Parenteral Formulations, 91 J. PHARM. SCI. 2283 (2002)CrossRefGoogle ScholarPubMed; Baldrick, Paul, Pharmaceutical Excipient Development: The Need for Preclinical Guidance, 32 REGULATORY TOXICOLOGY & PHARMACOLOGY 210 (2000)CrossRefGoogle ScholarPubMed; Golightly, L. K., et al., Pharmaceutical Excipients: Adverse Effects Associated with Inactive Ingredients in Drug Products (Part I), 3(2) MED. TOXICOL. ADVERSE DRUG EXP. 128 (1988)Google ScholarPubMed; Pifferi, G. et al., Quality and Functionality of Excipients, 54 FARMACO 1 (1999)CrossRefGoogle ScholarPubMed; Wong, Y. L., Adverse Effects of Pharmaceutical Excipients in Drug Therapy, 22(1) ANN. ACAD. MED. SING. 99 (1993)Google Scholar.

166 See Osterberg, R. E. & N. A. See, Toxicity of Excipients—a Food and Drug Administration Perspective, 22 INT’L J. TOXICOL. 377 (2003)CrossRefGoogle ScholarPubMed.

167 See Mark D. Grebenau, URGENT: Reports of Substitution of NEORAL® with Generic Equivalents of SANDIMMUNE®, NOVARTIS-TRANSPLANT.COM, http://www.novartistransplant.com/medpro/drug_substitution.jsp (describing that one form of a tranplant drug described by the FDA as therapeutically equivalent was in fact not equivalent to the other form) (last visited Apr. 18, 2006).

168 See, e.g., Trevor Cook, Regulatory Data Collection of Medicinal Products in Europe, BIOSCIENCE L. REV. (Mar. 6, 2003), available at http://pharmalicensing.com/features/disp/1046957520_3e674dd06906d (stating that European definition of “essentially similar” is absent under EU directives, or is established by each independent regulatory authority); NÚRIA HOMEDES ET AL., GENERIC DRUG POLICIES IN LATIN AMERICA, HEALTH, NUTRITION, AND POPULATION DISCUSSION PAPER (Mar. 2005), http://siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/Resources/281627-1095698140167/HomedesGenericDrugFinal.pdf (describing survey study discovering bioequivalence has different meanings across countries).

169 See S. 334 at § 4. Note also that individual importation would also be allowed if nonbioequivalent labeling is provided. Id. Yet this is a highly dangerous action; if excipients make the drug a poor choice for the patient, the drug actually is a different formulation, or the patient discovers the non-bioequivalence and decides not to take the drug, significant negative therapeutic consequences can result.

170 See id. at 73-74.

171 See id. at 75.

172 See id.

173 See id. at 89.

174 See generally Jazz Photo Corp., 264 F.3d 1094.

175 See S.334.

176 See id. at 108-109.

177 Id.. at 110.

178 Of course, this only relates to beginning use. FDA NEWS, FDA Announces New Initiative to Protect the U.S. Drug Supply Through the Use of Radiofrequency Identification Technology, Nov. 15, 2004, http://www.fda.gov/bbs/topics/news/2004/NEW01133.html.

179 Robert P. Giacalone, Drug Wholesaling and Importation: Challenges and Opportunities? 1st Annual San Diego Health Policy Conference, June 3, 2005 (noting that Cardinal Health, one of the three major drug wholesalers and distributors in the United States, found on testing that only 73% of RFID tags were readable, and that broader testing found that wholesalers had failure rates of 3.5% to 21%. It is illustrative to note that a major event in the RFID track and trace pharmaceutical effort was a pilot project announced by a single drug manufacturer, a single wholesaler (not one of the “big three”), a single technology company, for one drug. See, e.g., SupplyScape and Unisys Pilot Pharmaceutical Industry's First Electronic Pedigree System for Commercial Drugs, UNISYS, May 31, 2005, http://www.unisys.com/about__unisys/news_a_events/05318546.htm. It can be imagined that the costs associated with such projects will be exceedingly high, given capital costs that will be required to implement the program. Creating systems for broader industrial use will be even greater.

180 See Giacalone, supra note 179.

181 Id.

182 James Christian, Vice President and Head of Global Corporate Security, Novartis International AG, Oral Statement before the House Energy and Commerce Committee: Subcommittee on Commerce, Trade, and Consumer Protection, Product Counterfeiting: How Fakes Are Undermining U.S. Jobs, Innovation, and Consumer Safety (June 15, 2005) at 7-9, available at http://energycommerce.house.gov/108/Hearings/06152005hearing1551/Christian.pdf.

See also J. Alan Cates, FDA's Placebo for Counterfeit Drugs, FRAUD PREVENTION INSTITUTE,, available at http://www.fraudpreventioninstitute.org/FakePillsArticle.pdf. Cates notes that “The FDA's recent decision to use radio tags to track drug shipments from manufacturer to major wholesalers may dampen diversion of legitimate drugs. However, the real threat is not legitimate—but counterfeit drugs.” Note also that many in the industry still question the business case for RFID and the manufacturing benefits, and Europe lags in adoption. See Rick Lingle, Survey: What's the Value of RFID/EPC? PACKING WORLD MAG., Sept. 2004, http://www.packworld.com/articles/Related_Articles/18118.html (indicating that survey of manufacturing representatives indicate benefits from investment from RFID/EPC are unclear to twothirds of survey participants); see also Half of Manufacturing Executives Expect High Return on RFID Investment, Finds Accenture Survey, 2004 News Releases, http://www.accenture.com/xd/xd.sp?it=enweb&xd=_dyn%5Cdynamicpressrelease_731.xml (finding only three percent of respondents are rolling out RFID implementations).

Industry specialists note other implementation challenges, such as industry agreement on a rollout timetable, technology standards, RFID tag and reader availability, and agreements on data sharing. See Kontnik, supra note 35, at 8. Further, countries such as Russia, with a large counterfeits problem, note that security systems will have little effect on piracy due to ability of counterfeiters to mimic security systems as well. See, e.g., translated by Dmitry Sudakov Fake Medications Inundate the Russian Pharmaceutical Market: The Russian Experience in Introducing Special Marks for Licensed Video and Audio Production has not Resulted in any Positive Changes, PRAVDA, May 4, 2005, available at http://english.Pravda.ru/main/18/89/357/15406_medicine.html

183 For example, molecular tracers are progressing that provides access to flexible as well as rigid plastics. However, this still only follows packaging rather than product. See Molecular Tracer Tags Rigid, Flexible Packaging, IN PHARMATECHNOLOGIST, July 27, 2005, available at http://www.in-pharmatechnologist.com/news/news-ng.asp?n=61564-molecular-tracer-tags; and Tracey Boles, Scanner Will Fight $6bn Counterfeit Medicines Market, BUS. ONLINE, Sept. 25, 2005, available at http://www.thebusinessonline.com/Stories.aspx?StoryID=A7F19D68-049D-4EB6-894A-0E7657B18CE1&SectionID=F3B76EF0-7991-4389-B72E-D07EB5AA1CEE.

184 See Letter from John D. Dingell, Ranking Member, Committee on Energy and Commerce, and Bart Stupak, Ranking Member, Subcommittee on Oversight and Investigations, U.S. House of Representatives, Committee on Energy and Commerce, to The Honorable Michael O. Leavitt, Secretary, Department of Health and Human Services, July 20, 2005, at 3-4, available at http://www.house.gov/commerce_democrats/Press_109/109ltr29.pdf [hereinafter Dingell].

185 See id. at 1-2.

186 The author at a Federation of State Medical Boards Patient Safety Task Force meeting notified the Federation of State Medical Boards representatives, including the President and Vice President for Legislative Affairs, about its program inclusion in S.334. They indicated that they had no knowledge of the Federation's inclusion, and that their Clearinghouse was not created for the purpose of monitoring Internet pharmacies but instead for the purpose of detecting physicians prescribing without seeing patients. Personal Communication with Jim Thompson, MD, President, and Lisa Robin, Vice President, Federation of State Medical Boards, May 12, 2005.

187 Id.

188 According to the FDA:

virtually all prescription drugs imported for personal use into the United States … violate the [Federal Food, Drug, and Cosmetics Act (FFDCA)] because they are either unapproved new drugs (21 U.S.C. § 355), labeled incorrectly (21 U.S.C. §§ 352, 353), or dispensed without a valid prescription (21 U.S.C. § 353(b)(1)). Importing a drug into the United States that is unapproved and/or does not comply with the labeling requirements in the FFDCA is prohibited under 21 U.S.C. §§ 331(d), and/or (a). See also 21 U.S.C. § 381(a).

FDA approvals are manufacturer-specific, product-specific, and include many requirements relating to the product, such as manufacturing location, formulation, source and specifications of active ingredients, processing methods, manufacturing controls, packaging location, container/closure system, and appearance. 21 C.F.R. § 314.50. Generally, drugs sold outside of the United States are not manufactured or packaged by a firm that has FDA approval for that drug. Moreover, even if the manufacturer has FDA approval for a drug, the version produced for foreign markets usually does not meet all of the requirements of the United States approval, and thus is unapproved. 21 U.S.C. § 355. The version also may be misbranded because it may lack certain information that is required under 21 U.S.C. §§ 352 or 353(b) but is not required in the foreign country, or it may be labeled in a language other than English (see 21 C.F.R. § 201.15(c)).

Second, with respect to “American goods returned,” it is illegal for any person other than the original manufacturer of a drug to import into the United States a prescription drug that was originally manufactured in the United States and sent abroad (21 U.S.C. § 381(d)(1)). This is true even if the drug at issue were to comply in all other respects with the FFDCA. Importing a drug into the United States in violation of section 381(d)(1) is prohibited under 21 U.S.C. § 331(t).

Thus, to ensure compliance with the FFDCA, any person that intends to import prescription drugs into the United States must ensure, among other things, that it only imports FDA-approved drugs that comply with their FDA approvals in all respects, including manufacturing location, formulation, source and specifications of active ingredients, processing methods, manufacturing controls, container/closure system, and appearance. 21 C.F.R. § 314.50. The importer must also ensure that each drug meets all applicable U.S. labeling requirements, and that such drugs are not imported in violation of the “American goods returned” provision in 21 U.S.C. § 381(d)(1).

Letter from Randall W. Lutter, Ph.D., Assoc. Comm’r for Policy and Planning, U.S. Food and Drug Admin., to Governor Kenny Guinn, Governor of Nev. (May 20, 2005), available at http://www.fda.gov/oc/opacom/hottopics/importdrugs/guinn052005.html. FDA personnel do have some discretion regarding personal importation under certain circumstances, such as:

  1. when the intended use is appropriately identified, such use is not for treatment of a serious condition, and the product is not known to represent a significant health risk; or

  2. when a) the intended use is unapproved and for a serious condition for which effective treatment may not be available domestically either through commercial or clinical means; b) there is no known commercialization or promotion to persons residing in the U.S. by those involved in the distribution of the product at issue; c) the product is considered not to represent an unreasonable risk; and d) the individual seeking to import the product affirms in writing that it is for the patient's own use (generally not more than 3 month supply) and provides the name and address of the doctor licensed in the U.S. responsible for his or her treatment with the product, or provides evidence that the product is for the continuation of a treatment begun in a foreign country.

Office of Regulatory Affairs, U.S. Food and Drug Admin., Subpart Coverage of Pers. Importations in Regulatory Procedures Manual, available at http://www.fda.gov/ora/compliance_ref/rpm_new2/ch9pers.html. However, this provision is expressly noted to not be a license for personal importation generally. Id.

189 See Dingell, supra note 184, at 3. See generally Liang, supra note 48 (reviewing Internet vulnerabilities).

190 Julie Appleby, Canada's Cheap Drugs Not the Answer, USA TODAY, Aug. 28, 2003, available at http://www.usatoday.com/tech/news/2003-08-27-canadadrugs_x.htm. This use of Internet pharmacies is a tremendous safety issue because, amongst other things, children are using these sites to obtain drugs for abuse. See, e.g., Crack Down on Online Pharmacies that are Selling Drugs to Kids, DEMOCRAT & CHRON., Aug. 5, 2005, available at http://www.democratandchronicle.com/apps/pbcs.dll/article?AID=/20050805/OPINION04/508050365/1041/OPINION (describing National Center on Addiction and Substance Abuse study reporting abuse by children of oxycontin and Ritalin obtained through online pharmacies).

191 Pfizer and Microsoft have joined forces to prosecute international spam syndicates that attempt to sell counterfeit Viagra. CanadianPharmacy is one entity targeted by Pfizer and Microsoft. The identities of the individuals controlling these sites are unknown, while the drugs and purchasing supply chain “spans the globe”, including India, which is notorious for its fake drug supply. See, e.g., John Leyden, Pfizer and MS Sue Viagra Span Gangs, REGISTER (UK), Feb. 10, 2005, available at http://www.theregister.co.uk/2005/02/10/spam_lawsuit. The difficulty in finding counterfeiters is tremendous, particularly on the Internet. A web address may be licensed in Russia; the server in China; the company payee for the credit card charge in the UK; the processing of payment in Australia; and the product mailed from Chicago, using a return address of a unwitting customer of the website. See Christopher Rowland, Drug Makers Press Fight vs. Counterfeiters, BOSTON GLOBE, Feb. 14, 2005, available at http://www.boston.com/news/globe/health_science/articles/2005/02/14/drug_makers_press_fight_vs_counterfeiters/.

192 See Christopher Rowland, Drugs From Anywhere: As Importation Networks Spread, Concerns for Consumer Safety Grow, BOSTON GLOBE, Dec. 16, 2004, available at http://www.boston.com/news/world/articles/2004/12/16/drugs_from_anywhere?pg=full.

193 See SHEPHERD, supra note 29, at 10.

194 See Ricardo Alonso-Zaldivar, FDA Casts Suspicion on Online Pharmacies, SEATTLE TIMES, June 15, 2005, available at http://seattletimes.nwsource.com/html/nationworld/2002336462_fda15.html. See Jeff Clabaugh, Survey Finds Few Online Pharmacies Sell Drugs, WASH. BUS. J., June 13, 2005, available at http://www.bizjournals.com/washington/stories/2005/06/13/daily3.html. Cyveillance notes that online brand abuses seen “a lot” are in the pharmaceutical industry. See Donna Howell, Cyber Sleuths Monitor Internet's Action On Lookout For Crooks Cyveillance Seeks Fraud Schemes, Illegal Uses of Clients’ Brands, Products, INVESTOR's BUS. DAILY, Aug. 4, 2005.

195 See Alonso-Zaldivar, supra note 194.

196 See Top European Security Expert Warns Senate Panel on Risk of Drug Importation; Urges Congress to Learn from Problems Faced by European Union, PHARMALIVE, Apr. 19, 2005.

197 See supra notes 117-119 and accompanying text.

198 See, e.g., Deanna Lites, Medication Meltdown, WHDH-TV, Aug. 23, 2005, available at http://www1.whdh.com/features/articles/healthcast/BOS4011 (describing effects of poor conditions for transport and storage of medications that can result in therapeutic failure and side effects).

199 “The sale of drugs to U.S. residents via foreign websites is an extremely challenging area… . Foreign sales pose the most difficult challenge for U.S. law enforcement because the seller is not within U.S. boundaries. Although the FDA may have jurisdiction over a resident in a foreign country who sells in violation of the [Food, Drug and Cosmetic Act] to a U.S. resident, from a practical standpoint, the Agency working with DOJ has a difficult time in enforcing the law against foreign sellers, when they are hard to reach and outside our borders.” Statement of William K. Hubbard, Assoc. Comm’r for Policy and Planning, Committee on Gov't Reform, U.S. House of Representatives, Hearing on Internet Drug Sales, Mar. 18, 2004, available at http://www.fda.gov/ola/2004/Internetdrugs0318.html.

200 “Potent substances are freely available on the internet and can be ordered easily without any prescription and any authentication of sources, making the public vulnerable to health hazards and public health vulnerable to growing antimicrobial and drug resistance.” Global Forum on Pharmaceutical AntiCounterfeiting Calls for Increased Corporate Responsibility and a Framework Convention, EMEDIA WIRE, Mar. 21, 2005, http://www.emediawire.com/releases/2005/3/emw219649.htm [hereinafter Global Forum].

201 Statement of William K. Hubbard, Ass. Comm’r for Policy and Planning, Before the Comm. on Government Reform, U.S. House of Representatives, Hearing on Internet Drug Sales, Mar. 18, 2004, available at http://www.fda.gov/ola/2004/Internetdrugs0318.html.

202 Charles W. Schmidt, Phony Pharm, MOD. DRUG DISCOVERY, Nov. 2002, at 27, 28 (quoting William K. Hubbard, during a Senate committee hearing, July 9, 2002), available at http://pubs.acs.org/subscribe/journals/mdd/v05/i11/pdf/1102rules.pdf?sessid=6006l3.

203 Online, Mail-Order Firms Fastest Growing Sources of Counterfeit Drugs, IHEALTHBEAT, Apr. 28, 2005, http://www.ihealthbeat.org/index.cfm?Action=dspItem&itemID=110666. See, e.g., Suzanne Gamboa, DEA Cracks Down on Illegal Rx Web Site, BIZ REPORT, Sept. 21, 2005, http://www.bizreport.com/print/9312/ (discussing DEA arrest of at least 18 persons, registrations suspensions of 20 physicians and 22 Internet pharmacies, shutdown of 4,600 web sites, seizure of 2,400 checks and money orders, and legal proceedings to seize several homes worth $7.85 million in sting on illegal Internet pharmacy business).

204 Statement of William K. Hubbard, supra note 202. See also Audra Ang, Twelve Arrested in International Drug Scheme, BOSTON GLOBE, Sept. 8, 2005, available at http://www.boston.com/news/world/asia/articles/2005/09/08/12_arrested_in_international_drug_scheme (describing a $4.3 million counterfeit drug operation that sold drugs to patients in Britain, Israel, Switzerland, and the U.S. through the Internet).

205 Prescription Drug Program, Washington State Health Care Authority, Accessing Canadian Pharmacies, http://www.rx.wa.gov/prescriptionhelp/canada.shtml (last visited Apr. 18, 2006).

206 “The state of Minnesota makes no warranty, express or implied, of merchantability and fitness for a particular purpose, and accepts no legal liability, with respect to any product offered, or pharmaceutical care provided, by the pharmacies listed on this website.” See Minnesota RxConnect Online, Legal Information, http://www.state.mn.us/cgibin/portal/mn/jsp/content.do?programid=536902438&agency=Rx (last visited Apr. 18, 2006). “[T]he State of Illinois cannot guarantee the safety of any particular prescription drug purchase. The State of Illinois makes no representations or warranties as to the safety or efficacy of prescription drugs purchased from foreign sources.” See I-SaveRx, Order Form, http://www.isaverx.net/assetsrx/il_enrollment.pdf (last visited Apr. 18, 2006).

207 See Dingell, supra note 184.

208 “There are tens of thousands of Web sites that sell prescription drugs of unknown origin to Americans illegally… . A Web site based in Canada may get its products from India or China, or may traffic in counterfeits.” Matthew Herper, Bad Medicine, FORBES, May 23, 2005, available at http://www.forbes.com/home_europe/free_forbes/2005/0523/202.html. Further, “Argentinean export records seem to show tens of thousands of doses of drugs, including knockoffs of erythropoietin and the cancer drugs Eloxatin and methotrexate, making their way from Argentina into Canada.” Id.

209 See Global Forum, supra note 200. For a more detailed interdisciplinary strategy, see generally Liang, supra note 48. For an assessment of the limits of technology, see Bryan A. Liang, Structurally Sophisticated or Lamentably Limited? Mechanisms to Ensure Safety of the Medicine Supply, ALB. L. J. SCI. & TECH. (2006), forthcoming.

210 Id.

211 Id.

212 Id. (quoting Ian Lancaster, Director, Reconnaissance International, specialists in anticounterfeiting strategies).

213 Reporting systems in the U.S., such as MedWatch, should be coordinated with other international sites. The International Pharmaceutical Federation announced that it will create a website to target counterfeit medicine, and includes a means for counterfeit reporting. FIP Website Tackles Fake Drug Peddlers, IN-PHARMATECHNOLOGIST, Mar. 12, 2005, http://www.inpharmatechnologist.com/news/news-ng.asp?n=58730-fip-website-tackles. This site was spurred by the expanding reach of counterfeits in developing countries, including antibiotics, painkillers, and even multivitamins. See Fake Drugs Spreading Rapidly, Warns WHO, MSNBC, May 6, 2005, http://msnbc.msn.com/id/7761725.

214 Reporting systems for patient safety and aviation safety have been created that have garnered thousands of reports each year. See Liang, Bryan A., Risks of Reporting Sentinel Events, 19(5) HEALTH AFF. 112–120 (2000)CrossRefGoogle ScholarPubMed (describing reports from the Aviation Safety Reporting System); see Pennsylvania Patient Safety Authority, Annual Report for 2004, available at http://www.psa.state.pa.us/psa/cwp/view.asp?a=1275&q=445714 (last visited Apr. 18, 2006).

215 A preventive strategy, such as limiting online pharmaceutical sales to online pharmacies that have established their compliance with national safety standards, could assist greatly. A bill to create such a requirement has been introduced in Congress. Walden, Davis Re-Introduce Rx Safety Bill: Legislation Would Protect Americans by Establishing Safety Standards for Web-Based Pharmacies, BEND, Apr. 23, 2005, http://bend.com/news/ar_view.php?ar_id=22371 (describing H.R.1808, the Safe Online Drug Act of 2005).

216 One state is considering such a bill. See David Pitt, Iowa House Passes Law Against Making Counterfeit Drugs, WATERLOO CEDAR FALLS COURIER, Apr. 22, 2005, available at http://www.wcfcourier.com/articles/2005/04/22/news/breaking_news/doc4268d24b27870940659285.txt (discussing possible life sentence in prison for involvement in sale of counterfeit drugs resulting in death). See also Counterfeit Drug Prevention Act of 2006, H.R. 5156, 109th Cong., 2nd Sess. (2006) (increasing counterfeiting penalties to 20 years imprisonment, and up to life imprisonment if a counterfeit drug is the proximate cause of consumer death).

217 See supra notes 178-182 and accompanying text (reviewing limitations of security technology).

218 Note also that patients are the last barrier to harm from medication errors in dispensing, and all medication dispensing is subject to human error. See, e.g., Amelia Graham, 6 News Discovers More Trouble with Prescriptions from Local Pharmacy, WATE-TV (TN), July 14, 2005, available at http://www.wate.com/Global/story.asp?S=3595262 (describing medication error by CVS pharmacy). Detection and safety require redundancy of human processes that accept that error will occur and implement a system that can block that error from resulting in harm. See Bryan A. Liang, Special Report: Medical Errors Part I—Reporting the Wrench, S. CAL. PHYSICIAN 19, 20-1 (Apr. 2005), available at http://socalphys.com/site/apr05/feature2.pdf (describing systems processes).

219 Partnership for Safe Medicines, http://www.safemedicines.org (last visited Apr. 18, 2006). See, e.g., Don Oldenberg, Raising the Alarm on Rise in Counterfeit Drugs, WASH. POST, Apr. 5, 2005, at C9 (discussing the SAFE DRUG checklist of safety tips).

220 Id.

221 Id.

222 Id.

223 Id.

224 Id.

225 See Theriault, supra note 115.

226 See, e.g., Food and Drug Administration, Recalls, Market Withdrawals and Safety Alerts Archive, http://www.fda.gov/opacom/7alerts.html (last visited Apr. 18, 2006). Note that these alerts cover all aspects of FDA activities, such notifications on food safety. Hence, pharmaceutical safety is only a subset of information disseminated. The FDA has also announced the formation of a Counterfeit Alert Network, which will provide information to co-sponsor organizations and their members, including consumer groups. Currently the system is limited to entities; individuals cannot sign up to be part of the notification system. See Food and Drug Administration, Combating Counterfeit Drugs: A Report of the Food and Drug Administration Annual Update, May 18, 2005, available at http://www.fda.gov/oc/initiatives/counterfeit/update2005.html.

A promising approach for areas with limited personal Internet access was announced by the World Health Organization, which will create a web-based system to track fake drugs and disseminate information to national authorities for action. WHO Launches Web-Based System to Track Fake Drugs, CTV (Canada), May 3, 2005, http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/1115117564266_14/?hub=Health. It is essentially a clearinghouse of information; reports sent/emailed/faxed and communicated to it are then disseminated to national authorities. However, the system does not reach individual consumers, primarily because the region to be served, Southeast Asia, has a technology deficit. Burma has only 0.5 Internet users per 1,000, Cambodia has 2.2 per 1,000, and Laos has 2.7 per 1,000, compared to technologically savvy countries, like Singapore which has 504 Internet users per 1,000 and Malaysia with 320 per 1,000. Marwaan Macan-Markar, Fake Drugs in Poor Nations Worry Health Experts, CYBER DYARYO, May 16, 2005, http://www.cyberdyaryo.com/features/f2005_0516_03.htm.

227 Partnership for Safe Medicines Introduces First Consumer Counterfeit Drug Alert System, PRNEWSWIRE, June 13, 2005, http://www.prnewswire.com/cgibin/stories.pl?ACCT=109&STORY=/www/story/06-13-2005/0003868132&EDATE=.

228 It is interesting to note that Canadian analysis indicates that lower prices in Canada may not be from price controls, but in fact due to the lower standard of living in Canada in comparison to the United States and other industrialized countries, including France, Switzerland, the United Kingdom, Sweden, and Italy. Also, Canadians face higher generics prices than U.S. citizens. See JOHN R. GRAHAM & BEVERLY A. ROBSON, PRESCRIPTION DRUG PRICES IN CANADA AND THE UNITED STATES—PART 1: A COMPARATIVE SURVEY, 42 PUB. POL’Y SOURCES, Sept. 25, 2000, http://www.fraserinstitute.ca/admin/books/files/PrDrgPr1(42).pdf; JOHN R. GRAHAM, PRESCRIPTION DRUG PRICES IN CANADA AND THE UNITED STATES—PART 2: WHY THE DIFFERENCE?, 43 PUBLIC POL’Y SOURCES, Sept. 25, 2000, http://www.fraserinstitute.ca/admin/books/files/PrDrgPr2(43).pdf. See also Ricardo Alonso-Zaldivar, For Generic Drugs, the Price Is Right in US, L.A. TIMES, Aug. 9, 2005, available at http://www.americaputmeoutofbusiness.com/news-aug-09-05-003.php (reporting that generics up to 78% more expensive in Canada).

229 See, e.g., Erin Julius, Help for Prescriptions is on the Way: Medicare to Offer Insurance Coverage for Medication, NEWS LEADER, July 13, 2005, available at http://www.newsleader.com/apps/pbcs.dll/article?AID=/20050713/NEWS01/507130321/1002 (describing Medicare Modernization drug coverage as well as additional financial coverage for eligible Medicare beneficiaries).

230 In the Medicare drug program, after paying a monthly premium of roughly $37/month and a $250 deductible, Medicare beneficiaries will have 75% of drug costs for the next $2,000 covered under the plan. From that $2,000 level up to $5,100 in drug costs, the program will cover nothing. Finally, above the $5,100 level of drug costs, the program will cover 95% of prescription drug costs. See Centers for Medicare & Medicaid Serv., Drug Coverage, http://www.cms.hhs.gov/medlearn/drugcoverage.asp (last visited Apr. 18, 2006).

231 See Mary Massingale, Medicare may cut appeal of I-SaveRX: New Drug Plan Won't Count Meds Purchased Abroad, STATE-JOURNAL REGISTER, July 5, 2005. Note also that credit card purchases for Canadian drugs may subject the US consumer to transaction fees. See Senior Charged Fee to Buy Canadian Prescriptions, NBC 10 (Penn.), Aug. 18, 2005, http://www.nbc10.com/consumeralert/4869614/detail.html (last visited Apr. 18, 2006).

232 See RxForIllinois, http://www.rxforillinois.org (last visited Apr. 18, 2006).

233 See RxForIndiana, http://www.rxforindiana.org (last visited Apr. 18, 2006).

234 See Stacy Forster, Program Saving Money on Drugs; But Badger Rx Gold Isn't Cheaper for Everyone, MILWAUKEE J. SENTINEL, Aug. 6, 2005, http://www.jsonline.com/news/state/aug05/346695.asp (describing Wisconsin state program Badger Rx which provides access to discounted drugs and monitors patient prescription for potential drugdrug adverse interactions) (last visited Apr. 18, 2006).

235 See supra notes 203-210 and accompanying text (discussing domestic alternatives for affordable medicines).

236 Id.

237 Particularly in the context that widespread, legalized importation may not be the pricereducing panacea for US consumers. See, e.g., TASK FORCE , supra note 10, at 37-38; see also CONGRESSIONAL BUDGET OFFICE COST ESTIMATE: H.R. 2427 THE PHARMACEUTICAL MARKET ACCESS ACT OF 2003 (Nov. 19, 2003), http://www.cbo.gov/graphics/pdf-off.gif (estimating saving from prescription drug importation at less than 10% of claimed estimates under Pharmaceutical Market Access Act of 2003, an earlier importation bill) (last visited Dec. 5, 2004).

238 See, e.g., Deanna Wren, 33,000 Quality for Drug Aid in Initial Week of Web Site, FT. WAYNE J. GAZETTE, Mar. 19, 2005, available at 2005 WLNR 4390951. Note that the Department of Health and Human Services Office of Inspector General has indicated that prescription assistance programs for needy Medicare Part D beneficiaries are permissible without running afoul of fraud and abuse laws. See U.S. Dept. of Health and Human Services, HHS Applauds Pharmaceutical Patient Assistance Programs, April 18, 2006, available at: http://www.hhs.gov/news/press/2006pres/20060418a.html.

239 See, e.g., supra notes 235 & 236 and accompanying text.

240 See, e.g., Millions Access Free or Deeply Discounted Prescription Medications Through RX HELP for CALIFORNIANS, PHARMALIVE, Mar. 16, 2005, available at http://www.forrelease.com/D20050316/sfw073.P2.03162005130634.03156.html (describing the rxhelpforca.org site, providing translation for 15 languages and assistance in enrollment in the state Medicaid program). Similar clearinghouse programs also exist in Ohio, Rhode Island, Washington, West Virginia, and Washington, DC. Id. See also Jennifer Maloney, Drug Card Gives $3M Dose of Savings, NEWSDAY, Aug. 24, 2005, at A26, available at 2005 WLNR 13314284 (describing Nassau County discount card NassauRx program).

241 Partnership for Prescription Assistance, http://www.pparx.org. Pharmaceutical companies have also created an independent program known as Together Rx, www.togetherrxaccess.com, which also provides discounted pharmaceuticals to patients using a discount card. See, e.g., Together Rx Access Launches Ads to Encourage Americans with No Prescription Drug Coverage to Enroll in Savings Program, http://togetherrxaccess.com/en/pressroom/TRx_Access_PR_25Apr05.pdf. The Partnership for Prescription Assistance has been reported to have aided more than 600,000 people over three months; the state of New Jersey, which is a state chapter of the Partnership for Prescription Assistance, has provided assistance for greater than 80,000 as of July 2005. See Jeff May, Ed Silverman & George E. Jordan, Needy Get a Short in the Arm on Rx Aid, STAR-LEDGER, July 28, 2005, available at 2005 WLNR 11854353.

242 See, e.g., Partnership for Safe Medicines, http://www.safemedicines.org, a site that describes programs such as HelpingPatients.org, RxOutreach.com, and TogetherRx.com in its Safe Savings Brochure. Although clearinghouse programs would appear to be the most effective in creating affordable prices for medicines using domestic supplies, other methods may also be effective in reducing the financial burden of pharmaceutical treatments. In conjunction with comparison shopping through web sites such as PillBot.com and DestinationRx.com, as well as focus on the use of generics, samples, and other options can reduce medication costs. See id. State creation and support of comparison shopping sites could also provide incentives for lower prices while utilizing the domestic supply. See, e.g., Attorney General Unveils Drug Site, CINCINNATI BUS. COURIER, Apr. 5, 2005, available at http://cincinnati.bizjournals.com/cincinnati/stories/2005/04/04/daily18.html (describing Ohio Attorney General Jim Petro's consumer site, http://www.ag.state.oh.us, that allows comparison shopping for 25 common prescription drugs that has attracted greater than 200 competing pharmacies); New York Rx Price Posting Law is Most Comprehensive in Nation, ARRIVENET, Aug. 1, 2005, http://press.arrivenet.com/pol/article.php/676855.html (describing New York State program that provides comprehensive listing of retail prescription drug prices of 150 most prescribed drug from every pharmacy in the state, updated weekly). The Centers for Medicare and Medicaid Services will also create a prescription drug price comparison site when it rolls out Medicare Part D. See CMS Previews Online Tool to Compare Drug Costs, IHEALTHBEAT.ORG, Aug. 2, 2005, http://www.ihealthbeat.org/index.cfm?Action=dspItem&itemID=113132.

243 See Christopher Conkey, States’ Bid for Cheaper Medicine Sputters, WALL ST. J., Feb. 14, 2005, available at http://online.wsj.com/article/0..SB110835072729353797.00.html?mod=health%5Fhome%5Fstories (describing limited foreign drug purchasing from state web sites due to concerns about drug safety, a weaker dollar, and consumer confusion); Jim Ritter, Gov Gives Drug Plan a Shot in the Arm, CHI. SUN-TIMES, Mar. 14, 2005, available at 2005 WLNR 4837745 (describing state I-Save-RX plan which has signed up only 3,000 persons, compared with competing Illinois Pharmacists Association clearinghouse program Rx-for-Illinois, which “has helped more than 180,000 residents.”).

244 Such as generic purchases, comparison shopping using price tools available on the Internet, and other strategies. See Safe Savings Brochure, http://www.safemedicines.org; see also Maria M. Perontin, Patient Cut Drug Costs in Half, BRADENTON HERALD, July 25, 2005, available at http://www.bradenton.com/mld/bradenton/news/local/12215970.htm (describing pill splitting programs to reduce medication costs); Prescription Drug Savings Available Through AAA, July 27, 2005, http://www.aaanewsroom.net/Main/Default.asp?PageSearchEnginePageSize=&LoosenSearch=&FileSearchEnginePageSize=&ArticleSearchEnginePageSize=&CategoryID=8&ArticleID=388 (describing AAA discount drug program available to any person or family).

245 See Nunez-Diaz, supra note 42 (noting that only 30% of Peruvians have access the drugs due to high costs, thus fueling counterfeit production and sales).

246 U.S. Food and Drug Administration, FY 2003 Performance Report to the President and the Congress, http://www.fda.gov/oc/pdufa/report2003/default.htm ($800 million) (last visited Apr. 18, 2006) [hereinafter FY 2003]; Tufts Center for the Study of Drug Development, Total Costs to Develop a New Prescription Drug, Including Cost of Post-Approval Research, is $897 Million, May 13, 2003, http://csdd.tufts.edu/NewsEvents/RecentNews.asp?newsid=29.

247 Pharmaceutical Research and Manufacturers of America, Why Do Medicines Cost So Much?, http://lobby.la.psu.edu/002_Patent_Extension/Organizational_Statements/PhRMA/Why.htm (last visited Apr. 18, 2006).

248 See FY 2003, supra note 246.

249 Creech, Michele L., Comment: Make a Run for the Border: Why the United States Government is Looking to the International Market for Affordable Prescription Drugs, 15 EMORY INT’L L. REV 593, 608 (2001)Google Scholar.

250 See, e.g., Frank, Richard G. & Salkever, David S., Generic Entry and the Price of Pharmaceuticals, 6 J. ECON. & MGMT. STRATEGY 75 (1997)CrossRefGoogle Scholar.

251 In the U.S., the patent period for pharmaceuticals is generally 20 years from patent filing, 35 U.S.C. §154 (2005). However, the period in practical terms is often much less due to the period required to obtain FDA approval.

252 See id. See also Richard E. Caves, et al., Patent Expiration, Entry, and Competition in the U.S. Pharmaceutical Industry, in BROOKINGS PAPERS ON ECONOMIC ACTIVITY, MICROECONOMICS, (Martin Neil Baily & Clifford Winston eds., 1991), available at http://www.jstor.org/cgibin/jstor/printpage/10578641/di009484/00p00183/0-150.pdf?backcontext=page&dowhat=Acrobat&config=jstor&userID=a87a5060@bu.edu/01cc99333c1b94f108f2f31056&0-150.pdf (generic drug entry results in substitution and increasing drug price reductions as additional generic forms enter).

253 Note that brand name companies are also attempting to extend their hold on markets they obtained through introduction of their new drugs past patent expiration. This process, through issuing—or threatening to issue—their own generic form of the drug, sometimes known as “pseudogenerics”, “authorized generics”, or “branded generics”, has become a hotly contentious issue regarding the pro- or anti-competitive effects of this practice. The Federal Trade Commission has come down on both sides of this issue, depending on the facts of the particular case. See, e.g., FEDERAL TRADE COMMISSION, GENERIC DRUG ENTRY PRIOR TO PATENT EXPIRATION: AN FTC STUDY (July 2002), http://www.ftc.gov/os/2002/07/genericdrugstudy.pdf. Other commentators have been firmly against the practice; see, e.g., Bryan A. Liang, The Anticompetitive Nature of Brand-Name Firm Introduction of Generics Before Patent Expiration, THE ANTITRUST BULLETIN: THE JOURNAL OF AMERICAN AND FOREIGN ANTITRUST AND TRADE REGULATION 599 (Fall 1996) (illustrating the U.S. markets’ perspective); Hollis, Aiden, The Anti-Competitive Effects of Brand-Controlled ‘Pseudo- Generics’ in the Canadian Pharmaceutical Market, 29(1) CANADIAN PUBLIC POL’Y 21 (2003)CrossRefGoogle Scholar, available at http://economics.ca/cgi/jab?journal=cpp&view=v29n1/CPPv29n1p021.pdf (illustrating the Canadian markets’ perspective).

254 See, e.g., Stanton, Jerry, Comment, Lesson for the United States from Foreign Price Controls on Pharmaceuticals, 16 CONN. J. INT’L L. 149, 165, 167 (2000)Google Scholar. A variety of systems are used to control prices, such as reference pricing in Canada, price setting for government reimbursement such as in France, and caps on profit as is done in the U.K. Rosenfield, supra note 123, at 1052-53 Note, however, that certain sectors of the United States have negotiated pricing: for example, the Department of Veteran's Affairs program and state Medicaid programs negotiate price. See U.S. DEP't OF HEALTH AND HUMAN SERVICES, REPORT TO THE PRESIDENT: PRESCRIPTION DRUG COVERAGE, SPENDING, UTILIZATION, AND PRICES 108, 101 (2000), http://aspe.hhs.gov/health/reports/drugstudy/c3.pdf. Note also that large purchasers, such as pharmaceutical benefits managers that cover millions of lives in the private sector, also negotiate price with pharmaceutical companies. Id. at 8-14

255 Rosenfield, supra note 123, at 1053.

256 See 150 CONG. REC. S4226, S4229 (daily ed. Apr. 24, 2004) (statement of Sen. McCain), available at 2004 WL 854311 (“The United States represents the largest pharmaceutical market in the world. Our taxpayers make substantial investments into pharmaceutical research and development. And yet, Americans are still paying 30 to 75 percent more for their prescriptions than consumers in Canada, the European Union, and elsewhere.”).

257 See ALFONSO GAMBARDELLA ET AL., GLOBAL COMPETITIVENESS IN PHARMACEUTICALS: A EUROPEAN PERSPECTIVE, at 44 (2000), available at http://europa.eu.int/comm/enterprise/library/enterprise-papers/pdf/enterprise_paper_01_2001.pdf (“[T]he relative position of the US as a locus of innovation has increased over the past decade compared to Europe.”); PHARM. RESEARCH & MFRS. OF AM., PHARMACY INDUSTRY PROFILE 2004, at 5 (2004), http://www.trinity.edu/sbachrac/drugdesign/Drug%20Costs%20Articles/Phrma%202004%20review.pdf (“The increased concentration of research efforts in the United States is reflected by the fact that 8 of the top 10 medicines by sales originate from the United States, compared to 2 from Europe.”).

258 See, e.g., Peter Benesh, What to Do About Cheap Drug Imports? Coordinate, INVESTOR's BUS. DAILY, June 20, 2005, at A8, available at 2005 WLNR 9823068.

259 A step in this direction can be seen in the United States and Australian discussions for a trade agreement, which expressly, for the first time, discusses drug pricing and disparities thereof. See OFFICE OF THE U.S. TRADE REP., U.S.-AUSTRALIA FTA SUMMARY OF THE AGREEMENT (2004), http://www.ustr.gov/Trade_Agreements/Bilateral/Australia_FTA/USAustralia_FTA_Summary_of_the_Agreement.html (last visited Aug. 1, 2005). Commentators have agreed that such trade leverage should be used to address worldwide drug pricing issues. See Benesh supra note 263; Editorial, Drug Trade, WASH. POST, Jan. 13, 2004, at A20, available at 2005 WLNR 9618864.

260 Similar conclusions have been published in the U.S. Surgeon General's Report. See TASK FORCE, supra note 10. Note also that an analysis by the Department of Commerce of OECD countries has concluded that European price controls reduce pharmaceutical company returns and concomitantly, research and development expenditures. See U.S. DEP't OF COMMERCE, PHARMACEUTICAL PRICE CONTROLS IN OECD COUNTRIES: IMPLICATIONS FOR U.S. CONSUMERS, PRICING, RESEARCH AND DEVELOPMENT, AND INNOVATION, at 12 (2004), available at http://trade.gov/td/chemicals/drugpricingstudy.pdf.

261 See THE AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE 716 (Pickett, Joseph, et al. eds., Houghton Mifflin Company 4th ed. 2000)Google Scholar (defining “G8” as the “countries of Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States. Representatives from these countries meet to discuss economic concerns.” G8 is the abbreviation for Group of Eight).

262 See Press Release, World Trade Organization, Decision Removes Final Patent Obstacle to Cheap Drug Imports (Aug. 30, 2003), available at http://www.wto.org/english/news_e/pres03_e/pr350_e.htm (describing public health exception allowing countries to produce and import medicines without violating intellectual property rights of patent holders).

263 Ironically, legalizing importation could overwhelm the Canadian system, raise prices, and heighten risks of counterfeits during over the border “buying trips.” See Finkelstein, supra note 73.

264 See supra notes 80, 115 (discussing Canadian counterfeit investigations).

265 Cockburn et al., supra note 14, at 302-303. The Global Threat of Counterfeit Drugs, supra note 14.

266 Fade to black is common slang for killing oneself. See Urban Dictionary, http://www.urbandictionary.com (enter “fade to black” in the “Search” box) (last visited Aug. 16, 2005) (“Popularized in the 80's, as a term for suicide, by the band Metallica in the song ‘Fade To Black’.”). See, e.g., METALLICA, Fade to Black, on RIDE THE LIGHTNING (Elektra Records 1984):

Life it seems, will fade away
Drifting further every day
Getting lost within myself
Nothing matters no one else
I have lost the will to live
Simply nothing more to give
There is nothing more for me
Need the end to set me free
Things are not what they used to be
Missing one inside of me
Deathly lost, this can't be real
Cannot stand this hell I feel
Emptiness is filling me
To the point of agony
Growing darkness taking dawn
I was me, but now he's gone
No one but me can save myself, but it's too late
Now I can't think, think why I should even try
Yesterday seems as though it never existed
Death greets me warm, now I will just say good-bye