SICK CRIME: COUNTERFEIT DRUGS IN THE UNITED STATES HEARING BEFORE THE SUBCOMMITTEE ON CRIMINAL JUSTICE, DRUG POLICY, AND HUMAN RESOURCES OF THE COMMITTEE ON GOVERNMENT REFORM HOUSE OF REPRESENTATIVES ONE HUNDRED NINTH CONGRESS FIRST SESSION NOVEMBER 1, 2005 Serial No. 109–194 Printed for the use of the Committee on Government Reform ( Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html http://www.house.gov/reform U.S. GOVERNMENT PRINTING OFFICE 30–672 PDF WASHINGTON : 2006 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 VerDate 11-MAY-2000 11:41 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 D:\DOCS\30672.TXT HGOVREF1 PsN: HGOVREF1 COMMITTEE ON GOVERNMENT REFORM TOM DAVIS, Virginia, Chairman CHRISTOPHER SHAYS, Connecticut HENRY A. WAXMAN, California DAN BURTON, Indiana TOM LANTOS, California ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York JOHN M. MCHUGH, New York EDOLPHUS TOWNS, New York JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania GIL GUTKNECHT, Minnesota CAROLYN B. MALONEY, New York MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland STEVEN C. LATOURETTE, Ohio DENNIS J. KUCINICH, Ohio TODD RUSSELL PLATTS, Pennsylvania DANNY K. DAVIS, Illinois CHRIS CANNON, Utah WM. LACY CLAY, Missouri JOHN J. DUNCAN, JR., Tennessee DIANE E. WATSON, California CANDICE S. MILLER, Michigan STEPHEN F. LYNCH, Massachusetts MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland DARRELL E. ISSA, California LINDA T. SANCHEZ, California JON C. PORTER, Nevada C.A. DUTCH RUPPERSBERGER, Maryland KENNY MARCHANT, Texas BRIAN HIGGINS, New York LYNN A. WESTMORELAND, Georgia ELEANOR HOLMES NORTON, District of PATRICK T. MCHENRY, North Carolina Columbia CHARLES W. DENT, Pennsylvania ——— VIRGINIA FOXX, North Carolina BERNARD SANDERS, Vermont JEAN SCHMIDT, Ohio (Independent) ——— ——— MELISSA WOJCIAK, Staff Director DAVID MARIN, Deputy Staff Director/Communications Director ROB BORDEN, Parliamentarian/Senior Counsel TERESA AUSTIN, Chief Clerk PHIL BARNETT, Minority Chief of Staff/Chief Counsel SUBCOMMITTEE ON CRIMINAL JUSTICE, DRUG POLICY, AND HUMAN RESOURCES MARK E. SOUDER, Indiana, Chairman PATRICK T. MCHENRY, North Carolina ELIJAH E. CUMMINGS, Maryland DAN BURTON, Indiana BERNARD SANDERS, Vermont JOHN L. MICA, Florida DANNY K. DAVIS, Illinois GIL GUTKNECHT, Minnesota DIANE E. WATSON, California STEVEN C. LATOURETTE, Ohio LINDA T. SANCHEZ, California CHRIS CANNON, Utah C.A. DUTCH RUPPERSBERGER, Maryland CANDICE S. MILLER, Michigan MAJOR R. OWENS, New York VIRGINIA FOXX, North Carolina ELEANOR HOLMES NORTON, District of JEAN SCHMIDT, Ohio Columbia EX OFFICIO TOM DAVIS, Virginia HENRY A. WAXMAN, California MARC WHEAT, Staff Director MICHELLE GRESS, Professional Staff Member MALIA HOLST, Clerk TONY HAYWOOD, Minority Counsel (II) VerDate 11-MAY-2000 11:41 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 D:\DOCS\30672.TXT HGOVREF1 PsN: HGOVREF1 C O N T E N T S Page Hearing held on November 1, 2005 ........................................................................ 1 Statement of: Eban, Katherine, author, Dangerous Doses; Kevin Fagan, father of Timo- thy Fagan, counterfeit drug victim (Epogen); and Max Butler, brother of Maxine Blount, counterfeit drug victim (Procrit) ................................... 62 Butler, Max ................................................................................................ 75 Eban, Katherine ........................................................................................ 62 Fagan, Kevin .............................................................................................. 71 Lutter, Randall W., Ph.D., Acting Associate Commissioner for Policy and Planning, Food and Drug Administration .................................................. 16 Pitts, Peter J., director, Center for Medicines in the Public Interest; Carmen Catizone, executive director, National Association of Boards of Pharmacy; James A. Dahl, former Assistant Director of Investiga- tions, FDA Office of Criminal Investigations; and Donald Dekieffer, Dekieffer & Horgan ...................................................................................... 96 Catizone, Carmen ...................................................................................... 100 Dahl, Jim ................................................................................................... 109 Dekieffer, Donald ...................................................................................... 115 Pitts, Peter J. ............................................................................................. 96 Letters, statements, etc., submitted for the record by: Butler, Max, brother of Maxine Blount, counterfeit drug victim (Procrit), prepared statement of ................................................................................... 77 Catizone, Carmen, executive director, National Association of Boards of Pharmacy, prepared statement of ............................................................... 102 Cummings, Hon. Elijah E., a Representative in Congress from the State of Maryland, prepared statement of ............................................................ 10 Dahl, James A., former Assistant Director of Investigations, FDA Office of Criminal Investigations, prepared statement of .................................... 111 Dekieffer, Donald, Dekieffer & Horgan, prepared statement of ................... 117 Eban, Katherine, author, Dangerous Doses, prepared statement of ............ 64 Fagan, Kevin, father of Timothy Fagan, counterfeit drug victim (Epogen), prepared statement of ................................................................................... 73 Gutknecht, Hon. Gil, a Representative in Congress from the State of Minnesota, Pharma ad ................................................................................. 89 Lutter, Randall W., Ph.D., Acting Associate Commissioner for Policy and Planning, Food and Drug Administration, prepared statement of ........... 19 Pitts, Peter J., director, Center for Medicines in the Public Interest, prepared statement of ................................................................................... 98 Souder, Hon. Mark E., a Representative in Congress from the State of Indiana: Prepared statement of ............................................................................... 5 September 17, 2005 article ....................................................................... 92 (III) VerDate 11-MAY-2000 11:41 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 D:\DOCS\30672.TXT HGOVREF1 PsN: HGOVREF1 VerDate 11-MAY-2000 11:41 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 D:\DOCS\30672.TXT HGOVREF1 PsN: HGOVREF1 SICK CRIME: COUNTERFEIT DRUGS IN THE UNITED STATES TUESDAY, NOVEMBER 1, 2005 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON CRIMINAL JUSTICE, DRUG POLICY, AND HUMAN RESOURCES, COMMITTEE ON GOVERNMENT REFORM, Washington, DC. The subcommittee met, pursuant to notice, at 2:05 p.m., in room 2154, Rayburn House Office Building, Hon. Mark E. Souder (chair- man of the subcommittee) presiding. Present: Representatives Souder, Burton, Gutknecht, Schmidt, Cummings, Watson, and Norton. Staff present: Marc Wheat, staff director and chief counsel; Michelle Gress, professional staff member and counsel; Malia Holst, clerk; Tony Haywood, minority counsel; and Jean Gosa, mi- nority assistant clerk. Mr. SOUDER. The subcommittee will come to order. Good after- noon and thank you all for being here. We’re here because selling fake prescription drugs within the United States is a serious public threat and a growing problem. This hearing will examine the vulnerabilities that allow counter- feit or substandard drugs to end up in legitimate pharmacies, how such vulnerabilities expose this Nation to terrorist attacks through our medicines, and the anticipated widespread counterfeiting of lifesaving avian flu treatment in the midst of a potential pandemic, compounding the deadly toll of an outbreak. Just this morning the President asked Congress for $1.2 billion for vaccines to prepare for an avian flu pandemic. We cannot risk vaccinating Americans with counterfeited therapies. This is a very serious issue to which we are calling our attention. According to the World Health Organization, 10 percent of global pharma- ceutical commerce this year will be counterfeit. That is expected to double by the year 2010 as international criminal organizations be- come more sophisticated. Last year within the United States the FDA’s counterfeit drug investigations rose 150 percent in only 12 months. One key to un- derstanding this disturbing problem is the so-called ‘‘gray market’’ which stems from the practice of drug diversion. Drug diversion is the principal method by which counterfeits enter the legitimate drug market. The FDA confirmed with subcommittee staff that drug diversion was the entry point for every case investigated by that agency involving counterfeit drugs going into legitimate phar- macies. For example, closed-door or own-use pharmacies are pri- (1) VerDate 11-MAY-2000 11:41 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 D:\DOCS\30672.TXT HGOVREF1 PsN: HGOVREF1 2 mary sources for diversion. Own-use pharmacies such as nursing homes or hospitals agree to provide medications solely to their own patients. Accordingly, such pharmacies