The continuing fight against counterfeits in the U.S. Bruce Longbottom Assistant General Counsel Trademarks Eli Lilly and Company
Drug Quality and Security Act (DQSA) (signed into law Nov. 2013) Track & Trace law requires pharmaceutical manufacturers to: Begin capturing and reporting product transaction histories by January 1, 2015 Implement systems to report suspect or illegitimate products by January 1, 2015 Serialize individual products by 2017 However, when a patient goes online to acquire medicines (with or without a prescription) they are relying on an unknown supply chain It is the opposite of Track & Trace It is Lost in Space Eli Lilly and Company 2
Overview of the problem The Internet is the largest marketplace for counterfeit drugs At any one time, there are approximately 35,000 50,000 active online drug sellers operating worldwide 97% of online drug sellers operate illegally, peddling counterfeit, substandard, adulterated, unapproved, or otherwise illegitimate products 50% of the prescription medicines sold online by websites that hide their physical address are counterfeit 1 in 6 Americans 36 million people have bought medication online without a valid prescription Eli Lilly and Company 3
Headlines from August and September 2014 Eli Lilly and Company 4
Examples of some problem sites Eli Lilly and Company 5
Examples (continued) Eli Lilly and Company 6
Examples (continued) Eli Lilly and Company 7
Examples (continued) Eli Lilly and Company 8
Examples (continued) Eli Lilly and Company 9
What US Laws govern online pharmacies? Ryan Haight Online Consumer Protection Act of 2008 For controlled substances, requires online pharmacy to: Display specified information on website (e.g., pharmacy contact info/certification, pharmacist qualifications, contracted physicians) Comply with pharmacy licensure laws in each state in which it operates or sells Provide 30 days notice to the Attorney General and relevant state boards of pharmacy prior to offering to sell Practical effect: to drive suppliers of controlled substances offshore, but they still have online reach to US market Does not apply to pharmaceuticals that are not controlled substances State laws/regulations (varies by state) Prohibit questionnaires Define valid prescription Practical effect: very little impact Non-Internet laws still apply: Drug must be approved by FDA, cannot be counterfeit, misbranded or adulterated, and must be dispensed only with valid prescription by a licensed pharmacist. Eli Lilly and Company 10
Google settles with US Dep t of Justice (2011) https://www.youtube.com/watch?v=vszcf4tehko August 24, 2011 - U.S. Attorney Peter Neronha and Kathleen Martin-Weis, acting director of FDA/OCI (Office of Criminal Investigations) hold a press conference announcing the forfeiture of $500 million by Google for allowing online Canadian pharmacies to place ads through its AdWords program targeting US consumers. Eli Lilly and Company 11
Before settlement Sponsored Links Eli Lilly and Company 12
After settlement Sponsored Links Eli Lilly and Company 13
State attorneys general vs. Google (2014) December 2013: 24 state attorneys general sent Google a grievance letter Alleged Google profits off dangerous and illegal content through its promotion of illegal and prescription-free drugs January/February 2014: Attorneys general met with Google executives on two occasions; Google said it would: Increase spending on policy enforcement by 10% this year, to $114.5M Hire 120 people this year to flag rogue ads and videos Eliminate 1,200 predicted search phrases that led people to potentially illegal sites Summer 2014: Some AGs, including NAAG president Jim Hood of Mississippi, are demanding more from Google Want Google to delist sites that promote illegal activities and products MS will subpoena documents and e-mails about how they screen or don t screen videos and ads and how they place ads beside videos Eli Lilly and Company 14
Google settles shareholder derivative litigation (August 2014) Shareholders sued Google s directors in August 2011 (after Google s $500 million settlement with DOJ), alleging breach of fiduciary loyalty, corporate waste, and unjust enrichment Google settled litigation in August 2014, agreeing to spend $50 million per year for five years to fight rogue online pharmacy ads (not organic results) Eli Lilly and Company 15
Will Google ever clean up 100%? Pressure from US federal government Pressure from US state governments Pressure from US FDA Office of Criminal Investigations (FDA-OCI) Stay tuned.. Eli Lilly and Company 16
UPS settles with US Dep t of Justice (March 2013) UPS agreed to forfeit $40 million in payments from illicit online pharmacies for shipping services United States agreed to forego prosecution in exchange for forfeiture and implementation of strong compliance program Eli Lilly and Company 17
FedEx indicted by US Dep t of Justice (July 2014) FedEx was charged with distribution of controlled substances and misbranding of drugs Faces a potential fine of twice the gains from the conduct, which are alleged to be at least $820M In August, the government added money laundering charges to the indictment Eli Lilly and Company 18
US House Committee Hearing (Feb. 2014) On February 27, 2014 the House Energy and Commerce Committee held a hearing on Counterfeit Drugs: Fighting Illegal Supply Chains Testimony from FDA, IPR Center, GAO, Pfizer and Novartis Security, Me, Institute of Medicine, and Pew Charitable Trusts My message: need FDA-approved drugs and need pharmacist licensed by state authority Blessing by FDA and blessing by state licensing authority equals Sanctity of the pharmacy Eli Lilly and Company 19
FDA authority to destroy small packages (2014, still pending) If imported drugs appear to be adulterated, misbranded, or an unapproved drug, the owner or consignee of the detained drug is issued a notice of detention and has an opportunity to respond to FDA s intended refusal If FDA does indeed refuse the drugs: Under current rule The owner or consignee is issued a Notice of Refusal and the drug must then be exported or destroyed within ninety days of the refusal Under proposed new rule FDA has authority to destroy any drug refused entry without providing the owner or consignee of the drug with the opportunity to export the drug (provided that the drug is valued at less than $2,500) i.e., the drug would no longer be re-exported if it was refused entry. Eli Lilly and Company 20
ASOP is a nonprofit organization with the mission to protect patient safety globally Eli Lilly and Company 21
Center for Safe Internet Pharmacies (CSIP) CSIP Members include: PAYMENT SERVICE PROVIDERS: American Express Discover Mastercard Paypal Visa SEARCH ENGINES AND ADVERTISING NETWORKS: Yahoo Microsoft (Bing) Google Facebook DOMAIN NAME REGISTRIES, REGISTRARS, AND WEB HOSTING COMPANIES: Enom GoDaddy Neustar SHIPPERS UPS CSIP s mission is to promote and encourage safe online pharmacies through education, enforcement, and information sharing. Eli Lilly and Company 22
Options for low income / uninsured 1. Patient assistance programs (PAPs), such as Lilly TruAssist 2. Seniors have Medicare Part D coverage 3. Low-income and disabled have state Medicaid coverage 4. Affordable Care Act (Obamacare) provides coverage for enrollees Eli Lilly and Company 23
Questions? Eli Lilly and Company 24