James Christian, vice president and head of global corporate security for Novartis, has been tracking down counterfeiters and security leaks for almost two decades. Pharm Exec talks with the security chief to find out what Novartis is doing to secure its supply chain.
So, do you have the fun job?
I have the fun job. The phone rings, and it’s never good news.
It has been a few years now since FDA allowed pharma to test new serialization technology such as RFID. Has it panned out as a security effort?
I don’t personally have much confidence in RFID at all. Back in 2004, the FDA task force was looking for an answer to satisfy Congress and they didn’t really have one. So they came out and said RFID will solve all our problems in a couple of years. And it hasn’t and it won’t. It’s an inventory management tool.
That’s true, but it can be used for tracking and tracing a product through the supply chain.
Other industries have used it and had problems. In some instances RFID had about a 30 percent failure rate. What we have to realize is high tech does not mean high security. Everybody thinks that if it’s data-based, computer-based, high tech then it’s going to be high security and that often is not the case. So, I think we’re looking for something that is not available yet.
So, how do you prove that your drugs are indeed your drugs? Are you looking at on-dosage security?
There’s a number of things coming down the line but you still have to take a pill, a capsule, a tablet and you take it into the lab and you destroy it and after you’ve destroyed it you say, “Yeah, that pill capsule or tablet was genuine.” It doesn’t mean the other [drugs] in the same container are. One of the famous counterfeit cases in the US was with Lipitor, where the genuine product from the UK was mixed with counterfeit product from Latin America. One day you were taking a counterfeit product and one day you were taking a genuine product.
I’ve heard testimony from congressmen and senators saying we can have somebody on the Canadian border and they can reach in and take a sample or do a field test and then if that’s okay then the truckload can come in, and that’s ludicrous. Even a field test doesn’t tell you anything because maybe about 20 percent of the counterfeiting has the active ingredient but they generally have it in the wrong dose.
What is the main strategy right now from pharma to make sure things are secure technology-wise or non-technology-wise?
Technology-wise you have to monitor what’s out there. You have to listen to what people have. You have to sit through some God-awful presentations so that you’re familiar with what’s available, what’s coming online, and what has potential.
What security strategies is Novartis using?
We have a multi-pronged approach. Wherever there’s a counterfeit problem, even if it’s not our products, we try and develop some intelligence sources. And we monitor what the other companies are doing and the problems they’re having because if somebody’s having a problem in a particular country, we can guess that we’re going to have a problem eventually.
We develop contacts with the law enforcement, the regulatory and the health authorities so that we’re not strangers when we walk in the door when there is an issue. In addition to that, we’re trying to support the judiciary all the way through because the worst thing that a company can do is walk away after the arrest or the seizures and not worry about the prosecution. So we try and hold their hands through the whole process. We had a major case in the Middle East recently and we got them convicted after a major effort and everybody’s congratulating themselves and then [the criminals] got three month sentences.
Are counterfeit drugs a financial problem for Novartis?
It’s not a financial issue for us, but it could become one. One guy [from another drug company] stood up at a meeting and said, “This product of ours is a $5 billion product of which we have $1.7 billion and the counterfeiters have the rest.” Obviously, they have a health problem but they also have a severe financial issue.
Is there a primary area that pharma is still having a tough time with?
Well, obviously the biggest problem is China because they’re making products that pop up all over the world. The China stuff appears virtually everywhere and a lot of it’s going off on the Internet.
There’s an ongoing case now where [seven products from five major companies] were manufactured in China, shipped by truck into Hong Kong, flown to Dubai, held in a duty-free area in Dubai, and then shipped to the Bahamas via London Heathrow. The product was used to fill prescriptions that were ordered over the Internet from a Canadian Web site. Then they just bulk ship it back to the UK, break it down, and then ship [the product] individually to the US.
Have you seen a spike in counterfeit sales since the Internet became more prevalent?
Oh, absolutely. Back in 2004 when Giuliani was running his consulting business his group went out to Kennedy airport and out to Dallas airport with Customs and FDA and they found that both airports were getting about 40,000 packages a day that contained some kind of medical product. They opened 1,500 in both locations and found that 86 percent of them were illegal in the US.
What people are taking and what people are getting sick and dying from, you don’t know. One of the congressmen said, “Where are all the bodies in Canada?” Well, you wouldn’t know them if they were there. And we don’t know them here for the most part. Usually people die of the disease they had, whether it’s heart disease, hypertension, cancer, or whatever. The family comes back from the funeral home and takes the unused prescription drugs and dumps them down the toilet. So you don’t really know what the numbers are.
Is the US supply chain as safe as it has every been?
There’s some wheeling and dealing going around and there are distributors who, to save a half cent on a dose, will buy products from unknown sources. Overall, you go to the pharmacy, you’re 99.9 percent assured right now. But there’s constant moves in Congress to change things and to allow a lot of [drugs] to flow in from the outside and that’s a very dangerous thing to do.
Small Caribbean islands were ordering 50,000 doses or something when they had 10,000 citizens and it was sold at 80 percent off and then they sit in the hot sun on a dock on the island for two months and then come back in [to the US], virtually worthless. But they were accepted by Customs as American goods returned.