Falsified and substandard medicines can be ineffective, promote drug resistance and even cause severe illness and death, said panel chairman Lawrence Gostin, Georgetown University Law Center professor and director of the WHO Collaborating Center on Public Health Law and Human Rights. The report [“Countering the Problem of Falsified and Substandard Drugs” available at www.nap.edu] urged regulators to adopt international practices on surveillance, regulation and enforcement, including technical quality standards developed by the International Conference on Harmonization.

Most important to pharma companies, the panel backed a mandatory U.S. electronic drug track-and-trace system able to identify products at the unit level through unique serial numbers. This approach is supported by the Food and Drug Administration – which requested the report — but considered too costly and complex by manufacturers, pharmacists and wholesalers.

The expert panel also proposed to strengthen supply chain tracking through tighter state regulation of drug wholesalers, including creation of a public database of distribution firms that have had licenses suspended or revoked. And the federal government would help low- and middle-income countries detect substandard products by identifying new sampling and analytical technologies through a central repository at the National Institute of Standards and  Technology (NIST).

Counterfeits separate

One strategy for building support for all these activities is the panel’s decision to drop the term “counterfeit” in describing substandard drugs that pose a public health risk. The aim is to narrow the use of “counterfeit” to refer to products that infringe on trademarks and intellectual property protections, but are not necessarily substandard or adulterated. Calling all poor quality drugs “counterfeit,” the report notes, is seen by advocates for generic and low-cost medicines as a way to use the campaign against “bad drugs” as a guise to enforce patent and trademark regulations.

Similarly, the report  defines more clearly “substandard,” “falsified” and “unregistered” drugs to provide a basis for regulatory agencies to target their legal and regulatory efforts.

The panel also calls for international development and financing agencies to support drug manufacturers in low-income countries that seek to upgrade facilities to meet good manufacturing practices. Such investment efforts would counter fake drug marketing by boosting local capacity for producing quality medicines.

Although an international treaty enforcing drug quality standards is the ultimate goal, publication of guidance on best practices as an interim step “is more realistic,” noted panel member Hans Hogerzeil, professor of global health at Groningen University in the Netherlands. The IOM panel also is asking the World Health Assembly to support its basic recommendations at its May 2013 annual meeting.

There’s some optimism that this report may spur FDA, manufacturers, distributors and pharmacists to reach agreement on an effective drug track-and-track system, an issue that has generated heated debate for more than a decade. Congressional action is needed to authorize mandatory tracking, as well as to require states to support a database on licensed drug wholesalers. Added resources for FDA to take on these tasks also is a real challenge.

While cost is an issue everywhere in implementing new regulatory and oversight programs, Gostin noted that limiting the use of substandard drugs would bring notable benefits in terms of lower hospital costs and fewer drug-resistant medicines. Adopting the panel’s recommendations, he said, is “a very good investment.”

Julian Mosquera

The pharmaceuticals industry is undergoing major disruption and every comparative benchmark indicates that the sector needs to make a step change in asset performance, with working capital targeted for direct improvement. All players are planning major reconfigurations of their supply and distribution operations, from end to end, in a bid to improve cost and service efficiency. This challenge is all the more prescient with a large number of blockbusters coming off patent over the next five years, opening the door to generic producers, who are actively “forging strategic alliances” to secure the rights to produce cheaper copies, according to researchers at Frost & Sullivan. While expenditure on new medicine has risen dramatically over the past decade, regulatory approval for new drugs has declined. Where big pharma could turn to blockbusters in the past, they are now looking to smarter portfolio management for competitive advantage.

Historical margins meant pharma paid little attention to their supply chains. However, over the last decade such complacency has become unacceptable to boards. Directors in the current environment are looking to their COOs and supply chain directors to build resilience into supply chain networks, to protect against market volatility and to drive real cost reduction.

The industry’s manufacturing footprint is increasingly challenged by significant overcapacity. Efficiency, agility and flexibility are priorities, with slow moving/low volume production calling for a different supply approach. Now, more than ever, companies should look to increase product speed through the supply chain, challenging inventory touch and holding points in every market in which they operate.
Managing the chill chain is producing real challenges for the sector. As part of a much wider traceability issue, the sector has been slow to adopt the necessary technology and levels of control that may be expected of such a high-value, sensitive product line. Reliance on third parties to introduce such capabilities has had limited success. It is time for the sector to upgrade its capabilities as the new pharma supply chains emerge over the next decade, where chill control and traceability challenges will be far more critical.

There is an opportunity for companies to better leverage scale through structural change, working towards best practices, and most notably by improving and integrating sales and operations planning — something that is commonplace in other industries such as FMCG. Competition is becoming fierce, putting emphasis onto accurate forecasting and supply chain visibility.

Supply chain cost management is now a priority. Having leveraged scale and rationalised productive capacity businesses are looking for further cost-savings. The global nature of distribution has given rise to over-complex and under-managed supply chains, which are now recognised as a source of major cost reductions. Without a clear framework for delivering these savings, businesses are at risk of compromising service and the integrity of supply.

In this context, it is alarming how few pharma businesses know with any accuracy their ‘Cost to Serve’. Which products, distribution channels, customers or regions need more attention, and which need less? How should stock holding policies be tuned to these different groups? Where can lead times or touch points be reduced? Cost to Serve allows companies to calculate the true cost of servicing any combination of customer, product or market and takes a truly end-to-end approach (materials sourcing, manufacturing, logistics, distribution and consumption). By establishing clear policies for customer-product groupings, alongside disciplined, systematic control, it is possible to realise dramatic and permanent cost reductions.

Julian Mosquera is a Director at LCP Consulting, a specialist in customer-driven supply chain management.

Pharmaceutical manufacturing in the US is in rapid decline. Higher regulatory standards for efficacy and safety, among other reasons, have led to a significant level of difficulty in replacing “blockbusters” developed in the 1980s and 1990s that are now coming off patent. The rapid growth in biological understanding remains a source for current and future drugs, but has also raised the bar on selectivity and toxicology expectations. Industry is also grappling with issues of quality and compliance in manufacturing. There are also fundamental reasons why pharmaceutical manufacturing has lagged behind other high-tech industries. Every product is a different molecule, with different characteristics, method of manufacture, analytical methodology, stability characteristics, and so forth. Most pharmaceutical products involve powder processing, which is—at best—a partially understood field. As a result, for every product, the entire product-development process is developed from scratch.

In contrast, other large-scale manufacturing industries such as petrochemicals, automobile, and microelectronics, deal with a much smaller number of materials and use processes that are better understood. The products and manufacturing methods evolve and improve with time because one can build on what was done before.

New divisions of players
Industry faces a pressing conundrum: how to manage the quality and compliance of pharmaceutical manufacturing, which has lagged behind other industries even in the best of times, during a period of cost-cutting and fragmentation, with a myriad of manufacturers of various degrees of sophistication in a variety of countries and cultures. At the same time, our country seeks to increase manufacturing as a percentage of the US economy as a means of remaining competitive as a nation. We propose here that these two imperatives are related and can be managed in an integrated fashion.

It is useful to separate pharmaceutical manufacturing, both primary and secondary, into two groups: those operations that have become conventional and essentially commoditized, which are now being executed around the globe, and which are unlikely to return to the US; and those operations which relate to novel, “smart” products and processes that are knowledge-intensive, have IP protections, and are less sensitive to labor costs.

In the case of the first group, commoditized manufacturing, quality and regulatory compliance remain crucial. Indeed, quality compliance has become more challenging in the outsourced-manufacturing environment because it now must be managed across many more intercompany barriers. Fortunately, a solution has been demonstrated in the chemical industry. The answer is to make manufacturing technology mature, transparent, and portable. The operations involved must be categorized and described in detail, making it possible to harmonize methods, approaches, operations, control algorithms, and quality tests, such that the operations can be understood fundamentally, modeled mathematically, and then executed under predictive-model controls as is done by other high-tech industries.
The later group of “smart” products and processes involve targeted drugs and delivery systems, personalized medicine, medicines prepared locally on demand, complex hybrid biologics, sensors, and new diagnostics. These technologies are enormously promising, but they require long-term fundamental research to create new products, new manufacturing methods, and new technologies.

A plan forward

Given this environment, re-energizing pharmaceutical manufacturing in the US is likely to take place only if a coherent plan is implemented. Such a plan must address four crucial elements: strong long-term technology development, a nurturing ecosystem where collaborations among innovation players are facilitated while transactional costs between them are minimized, science-based compliance with high quality standards, and a concerted effort to create and maintain a highly skilled labor pool capable of supplying the needs of industry, government, and academia. Thus, we propose a strategy involving the following components:
1. Create a long-term, strategically driven research center, bringing industry, academia, and government together.

2. Develop a well-funded, agile innovation ecosystem where technology customers (i.e., finished goods commercialization companies) and technology suppliers (e.g., NME suppliers, equipment and instrumentation companies, CROs, CMOs, commercial integrators, and universities) can work together effectively, with access to funding, and with minimal transactional overhead.

3. Establish a regulatory science center that can provide scientific support to the FDA and to ensure that regulations are updated, transparent, and promote higher quality standards while decreasing regulatory risk.

4. Enable training and educational programs that ensure a supply of properly skilled labor for all of the noted parties. To rejuvenate pharmaceutical product and process development and manufacturing in the US, an entire generation of pharmaceutical scientists (and their management) must be educated, or in some cases, re-educated on modern product and process engineering methodologies.

This approach is entirely feasible. One of the few silver linings of the recent massive restructuring in US-based branded pharma is that there is a ready supply of available scientists eagerly awaiting the opportunity to upgrade their technical skills. It is hard to conceive a better use of educational resources than to devote them to this purpose.

A plan such as the one proposed here will not happen spontaneously. It will take time and effort. It will take leadership and aggressive advocacy. However, if we consider the alternative, which is to let yet another great American industry leave our shores, the path forward appears self-evident.

To advance these goals, the authors plan to organize a Summit Meeting at Rutgers University in Spring 2012 to gather input from all sectors and to develop concrete plans. We call all leaders in the pharmaceutical industry, government, and academia to join us in an effort to bring these ideas to Washington.

For the full version of this article, click here.

About the authors
Fernando Muzzio, PhD, is director of NSF Engineering Research Center at Rutgers University. Mauricio Futran, PhD, is professor and chair of the Department of Chemical and Biochemical Engineering at Rutgers University (mauricio.futran@rutgers.edu)

The new “Office of Drug Security, Integrity & Recalls (ODSIR)” will “take the lead in dealing with issues such as supply chain security, counterfeit and diverted drugs, economically motivated adulteration, import operations, and drug recalls,” Woodcock wrote in the memo. Organizationally, the ODSIR division will be housed along with three other divisions under the Office of Compliance. As a result, the Office of Compliance will be turned into a “Super Office,” meaning it houses subordinate offices.

Woodcock tapped Deb Autor, director of the compliance office, to lead the super office. Autor is behind FDA’s efforts – beginning in 2006 – to eradicate unapproved products from the market.

“The drug industry we regulate has become a global enterprise, and our mission of ensuring the safety, quality, and integrity of drugs for the American people has become an increasingly complex challenge,” Woodcock wrote in the memo.

It isn’t customary for European Union legislation to win backing from all sides. Usually, there’s a large rump of disappointed players sniping at any agreement (and if you want to see that in Technicolor and on a bigger screen that medicines legislation can offer, just watch the fights that will break out in the coming weeks over the Franco-German bid to put slack southern economies into a strait-jacket in a bid to restore Europe’s uneven and flagging growth!).

The draft directive on falsified medicines, has, however been greeted with sighs of relief almost all round. It is now only weeks away from finalization, now that the European Parliament has agreed its position on the proposals.

European health commissioner John Dalli was first into the fray when the law won the backing of EuroMPs in mid-February.  ”I welcome today’s vote on a Directive that will increase the protection our citizens from the dangers of falsified medicines”, he carolled.

The EU estimates that the number of fake medicines seized at its outer borders has tripled between 2006 and 2009 to reach 7.5 million items.

The European Federation of Pharmaceutical Industries and Associations added its own statistic, that in 2009, more than 11 million counterfeit or illegal medicines were stopped at EU borders.

French EuroMP Françoise Grossetête upped the ante even further, noting that in only two months at the end of 2009, 34 million falsified pills were confiscated — and she rejoiced that at last rules would stop ’silent killers’ getting into the supply chain.

Marisa Matias, the Portuguese EuroMP who piloted the discussions through the parliament, claimed that “since 2005, seizures of counterfeit medicines have risen by 400% and this type of counterfeiting has been a very profitable market for organized criminal networks valued at €45 billion per year.”

Worse, while the problem used to be related mainly to ‘lifestyle’ medicines, nowadays even innovative and life-saving medicines such as cardiovascular agents are being increasingly falsified. And worse still, these products are finding their way into the legal supply chain in the EU — so fakes are no longer limited just to illegal trading channels through online sales.
So these measures will ensure easier identification of falsified medicines, and improved verifications and controls at EU borders and inside the EU.

There will be strengthened record-keeping requirements for wholesale distributors, strengthened rules on inspections, and obligations on manufacturers and distributors to report any suspicion of falsified medicines.

The European Association of Pharmaceutical Full-line Wholesalers was particularly pleased that new requirements — including inspection — will apply to brokers.

And the European Association of Euro-Pharmaceutical Companies, which represents parallel distribution in Europe, called it “a leap forward for patient safety” — as well as preening itself that the new rules amounted to a “clear recognition of the parallel distribution industry”.

Even the normally taciturn (not to say obscure) Active Pharmaceutical Ingredients Committee and the European Fine Chemicals Group got in on the act, describing the vote as “a major step forward in the fight against falsified active pharmaceutical ingredients”. It was particularly jubilant that excipients had been included in the new rules.

There are, inevitably for a measure affecting so many different sub-sectors, some secondary reservations. Some groups wanted tougher enforcement, including through mandatory inspections of ingredient producers beyond the EU — which the new law doesn’t require. Some feel the proposals are still too vague, and others fear that careless drafting risks making them too constraining. So new battles are now going to take place as the mechanisms for putting the new law into effect are fine-tuned.

But at least Europe can be reasonably sure that it isn’t going to hear fundamental objections from those most penalized by the new laws — the counterfeiters themselves. If they popped their heads up in EU lobbying, that really would give the art of imitation a new dimension!

Reflector is Pharmaceutical Executive’s EU correspondent.

Global pharmaceutical outsourcing has become increasingly prevalent, but is creating a complex and risky supply chain environment that has pharmaceutical and life sciences executives on high alert, according to a major study co-sponsored by PwC and published by Axendia, a life science and healthcare analyst firm. In the report, 50 percent of pharmaceutical and life sciences executives surveyed said they see raw materials sourced outside of the US as the greatest vulnerability to the supply chain, and 61 percent view contaminated or nonconforming raw materials as the top threat in the next five years.

According to the report, titled “Achieving Global Supply Chain Visibility, Control & Collaboration in Life Sciences: Business Imperative, Regulatory Necessity,” the emerging economies of China, India, Mexico, and Brazil are becoming the most attractive places in which to sell medicines. In the drive to lower costs, these countries also are playing a more prominent role in the manufacturing and sourcing process. Yet, outsourcing drug development to manufacturers in developing nations carries significant operational risks. Moreover, it is more difficult to manufacture and distribute biologics, which are more sensitive to the elements, than chemical entities. Against this backdrop, Axendia’s survey of 112 industry executives from pharmaceuticals, medical devices, and biotechnology companies around the globe found:

• Ninety-four percent said global product sales outside of the US will be increasing in the next few years, while 78 percent said global sourcing outside of the US will be increasing, followed by 76 percent who said their global manufacturing outside of the US will be increasing.

• Threats that were considered limited or small scale as few as 10 years ago, such as drug counterfeiting and illegal product diversions, are becoming major concerns, with 44 percent and 35 percent of industry executives, respectively, citing them as business risks in the next five years.

• Visibility into the supply chain is primarily based on “snapshots in time,” with little sharing of common practices and information. Seventy-seven percent of industry executives stated that the primary method used to gain visibility into their suppliers’ practices is a periodic audit. Only 25 percent stated that they share common practices and information with suppliers and only 3 percent have access to suppliers’ data in real time.

• When asked about their ability to gain global visibility into the supply chain, including accessing data from multiple locations and sites to provide a global view, 66 percent said although they can do it, the procedures are still primitive; most need to manually aggregate the data.

• Nearly 60 percent of industry executives said they are concerned about the willingness of suppliers to provide information to address regulatory requirements, and 44 percent are concerned about their distributors’ willingness to provide information required to meet these requirements.

• The availability of track and trace technology to enable the industry to gain better control over the supply chain exists today. However, industry executives identified four hurdles to implementing such technology: cost, difficulty of implementation; lack of industry standards, and lack of regulatory requirement and guidance.

• Industry executives said their preferred method for creating best practices around standards and guidance is through industry consortium, such as the Pharmaceutical Supply Chain Initiative, the Experimental Physics and Industrial Control System, and the Rx-360 consortium.

According to the report, these forces are driving the industry to develop a supply chain that is more extended, globally dispersed, and virtual. However, the ability to control the safety, efficacy, and effectiveness of products will continue to be a challenge until the industry implements systems that can provide real-time, global visibility into the supply chain, including practices and information from suppliers, distributors, shippers, and contract manufacturers.

“With manufacturing, sourcing, and the sale of medical products expected to increase dramatically in the emerging markets, the geographical
expansion of the supply chain will make it more difficult to manage, as will the industry’s changing product mix,” says Wynn Bailey, Pharmaceutical and Life Sciences Advisory Services Partner, PwC.  “In order to meet the demands of globalization, the pharmaceutical supply chain will need to become much more flexible, with different manufacturing routes and distribution channels for different kinds of products. Companies will need to implement new strategies, processes, and technology to proactively reduce and control risks.”

Because of the size and complexity of global supply chains, the most cost-effective option to oversee them end to end involves the sharing of information to facilitate the safety, efficacy, and effectiveness of products.

Global pharmaceutical outsourcing has become increasingly prevalent, but is creating a complex and risky supply chain environment that has pharmaceutical and life sciences executives on high alert, according to a new study co-sponsored by PwC and published last week by Axendia, a life science and healthcare analyst firm. The report reveals that 50 percent of pharmaceutical and life sciences executives said they see raw materials sourced outside of the US as the greatest vulnerability to the supply chain, and 61 percent view contaminated or nonconforming raw materials as the top threat in the next five years.

According to the report, Achieving Global Supply Chain Visibility, Control & Collaboration in Life Sciences: Business Imperative, Regulatory Necessity, the emerging economies of China, India, Mexico, and Brazil are becoming the most attractive places in which to sell medicines. In the drive to lower costs, these countries also are playing a more prominent role in the manufacturing and sourcing process. Yet, outsourcing drug development to manufacturers in developing nations carries significant operational risks.  Moreover, it is more difficult to manufacture and distribute biologics, which are more sensitive to the elements, than chemical entities.

Against this backdrop, Axendia’s survey of 112 industry executives from pharmaceuticals, medical devices, and biotechnology companies around the globe found:

• 94 percent said global product sales outside of the US will be increasing in the next few years, while 78 percent said global sourcing outside of the US will be increasing, followed by 76 percent who said their global manufacturing outside of the US will be increasing.

• Threats that were considered limited or small-scale as few as 10 years ago, such as drug counterfeiting and illegal product diversions, are becoming major concerns, with 44 percent and 35 percent of industry executives, respectively, citing them as business risks in the next five years.

• Nearly 60 percent of industry executives said they are concerned about the willingness of suppliers to provide information to address regulatory requirements, and 44 percent are concerned about their distributors’ willingness to provide information required to meet these requirements.

• The availability of track and trace technology to enable the industry to gain better control over the supply chain exists today.

However, industry executives identified four hurdles to implementing such technology: cost, difficulty of implementation, lack of industry standards, and lack of regulatory requirement and guidance.

According to the report, all of these forces are driving the industry to develop a supply chain that is more extended, globally dispersed, and virtual. However, the ability to control the safety, efficacy, and effectiveness of products will continue to be a challenge until the industry implements systems that can provide real-time global visibility into the supply chain, including practices and information from suppliers, distributors, shippers, and contract manufacturers.

“In order to meet the demands of globalization, the pharmaceutical supply chain will need to become much more flexible, with different manufacturing routes and distribution channels for different kinds of products,” said Wynn Bailey, Pharmaceutical and Life Sciences Advisory Services Partner, PwC.

To access the report, click here.

Health and regulatory officials of Brazil are making the rounds with a message for pharmaceutical companies and clinical research sponsors about what a great place it is to do business. Most pharma companies have had operations in Brazil for years, but largely to import and sell products made elsewhere. Now Brazilian officials are offering attractive financing and touting a sound regulatory system and clinical research network to persuade R&D and manufacturing operations to expand their presence in the market.

Washington was a logical choice for conference hosted by the Brazilian Health Ministry last month, coinciding with the signing of a information exchange agreement between the drug regulatory agency, the National Health Surveillance Agency  or ANVISA, and the FDA.  Brazilian officials used the occasion to describe the opportunities offered pharma and biotech firms from its large ($50 billion) retail drug market and the capacity of its export-import bank to finance investment projects. Brazil wants active pharmaceutical ingredient producers to set up shop so domestic manufacturers don’t have to import these products.

One attraction to pharma companies may be growing opportunities to conduct clinical trials in Brazil. The country boasts a large, ready patient population, a universal health care system with hospitals able to support clinical research, and rules to ensure adherence to ethical review standards. A National Clinical Research Network is taking its cue from the U.S. National Institutes of Health in establishing a network of research centers (Pesquisa Clinica), many linked to universities or teaching hospitals able to evaluate and study new technologies, pointed out Reinaldo Guimaraes, Brazil’s secretary of science and technology.  ANVISA has developed capacity to evaluate clinical protocols and monitor studies, while also conducting more plant inspections to ensure compliance with quality manufacturing standards, working with international authorities to approve new vaccines, and streamlining its registration process to cut the time to analyze new drugs to only 12 months.

IP: Still on the Radar Screen
One challenge is concern about the country’s poor record for recognizing and protecting intellectual property rights. Despite a lack of patent protection for medicines until 1996, Brazil is now in compliance with TRIPS, explained Jorge Raimundo, president of Interfarma, the country’s R&D-based pharmaceutical manufacturers’ association. More patents are being registered in Brazil, he said, acknowledging that this has created an immense backlog in patent applications.

However, US companies and key officials at the Office of the US Trade Representative [USTR] complain that the slow speed of patent reviews and regulatory overlaps make it difficult to enforce IP rights in Brazil.  The biggest challenge is coping with the lack of coordination between regulatory approval staff and the patent office. Local generic players continue to take advantage by obtaining marketing rights from officials who do not certify whether the reviewed product is under patent or not.  By the time an infraction of the patent terms is documented, the product is already on the market and competing with the originator.

Despite this implicit homegrown advantage, leading generic drug makers have not yet set up subsidiaries in Brazil, partly due to the complexity of Brazil’s generic policies. Prior to enacting a generics law in 1999, Brazil permitted marketing of “similaires” that did not have to document bioequivalence. In the past decade, generic drugs that meet standards for bioequivalence and interchangeability have become more common and are gaining a larger share of the market. The similaires are supposed to be eliminated by 2014, but are very cheap, and thus still very popular.

Ultimately, the real goal is to attract research operations able to spur development of new treatments that meet Brazil’s key areas of medical need. Brazil offers “spectacular areas for research,” said Raimundo, noting progress in stem cells, genetic engineering, and drugs for neglected diseases. A prime attraction is Brazil’s biodiversity, with 60,000 unique plant species.

Looking for Long-Term Gain
The transition to a new government next month is unlikely to force any dramatic changes in policy toward the sector, considering that the more conservative candidate in the run-off election has a record of supporting aggressive actions to require foreign drug-makers to make essential medicines available at low prices, nvestors can expect the next government to push for pro-generic policies on the international front while seeking to stabilize the environment for the innovative side of medicines in its domestic industrial strategy for the sector. A truly pro-patent approach to innovation may be too much to expect:  although Brazil has weathered the global economic downturn relatively well, the government remains under pressure to reduce its spending, which could prompt cuts in pharmaceutical coverage.  Still, taking a long term view of change, Novartis, Pfizer and other pharma companies are investing and purchasing local operations and launching clinical trials.

Called “The Toxic Pipeline,” the series is a truly groundbreaking investigation into the counterfeit, adulterated, and dangerous drugs that are made in China and sold to an unsuspecting world. Reporters Walt Bogdanich and Jake Hooker spent the better part of the past year tracking the drug industry’s global supply chain across four continents to locate its faulty links where no regulation of corrupt officials facilitate a crisis level of contamination.

Wiith Hooker working at the source of the problem—in the part of China called chemical country, home to countless unregulated makers of drug ingredients—Bogdanich traveled to Panama, where a tainted cough-syrup ingredient made resulted in a mass poisoning and 350 deaths; to the free-trade zone of Dubai, where products made in China are repackaged or relabeled to erase their provenance; and to Milan, where he found 82 unlicensed Chinese chemical companies, several of them charged with counterfeiting, marketing their services at the biggest annual trade show for makers of pharma ingredients.

Right in the middle of the series, FDA announced that Baxter International’s heparin was killing people—and the Times team was all over the story. With Hooker already deep in chemical country, they were able to track the supply chain back from the Shanghai factory to the tiny village suppliers who process the pig intestines, painting an unforgettable picture of this anything-goes economy with which Big Pharma does more and more business. They dropped a bombshell or two, such as getting the response of China’s FDA: Not our problem.

They also revealed how our own FDA’s investigation into the mess was foundering because—contrary to the agency’s sunny public reassurances that China was cooperating fully—it could not gain, or would not demand, access to the same upstream supply chain that the Times had already covered.

The reporters even beat FDA in IDing the actual contaminant: a molecule apparently manipulated to look and act like heparin, the result apparently of a highly sophisticated—and intentional—adulteration that could easily deceive Baxter’s controls. FDA scrambled to make the same announcement hours after the Times story broke.

Just yesterday, the agency announced that there have been five times as many heparin-related deaths (103) than it had previously reported.

For drugmakers and consumers alike, it’s hard to know which of the series’ revelations is most disturbing: that Chinese drug counterfeiters have achieved such a high level of technical prowess? Or that our own FDA seems to be cowed by, and almost covering up for, China? But we have The New York Times to thank for alerting us—and reminding us of the importance of good, old-fashioned journalism.

Check out the five-part series, “The Toxic Pipeline,” on the New York Times Web site.

The California State Board of Pharmacy just announced that it would delay its e-pedigree law that would require all drugs that pass through the state to be electronically tracked. The date has been pushed from January 2009 to January 2011 giving everyone–from pharma to the pharmacists–a chance to properly implement their systems.

The plan is to have every drug coded with some form of tracking device–be it RFID tags, traditional barcodes, or 2D barcodes–to follow a shipment as it travels down the supply chain. Companies such as Pfizer are tracking every bottle of Viagra with RFID chips that can sense the contents of a pill bottle without even opening a shipping container.

California law isn’t requiring anything that fancy, but it insists that there is some form of chain of custody that can document a drug from manufacturer to the point of dispensing.

The pedigree also can be used to track expired goods, find a missing shipment, or determine whether an unmarked shipment has been diverted into the supply chain or if it contains counterfeit product.