Theft of medical products poses threat

By Stephanie Bouchard | October 4, 2011 | 2:12 PM

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Organized crime ups supply chain cost and risk

When thieves cut a hole through the roof of Eli Lilly’s Enfield, Conn. warehouse on a Sunday in March 2010, they were able to rappel inside and fill tractor trailers full of anti-depressants and cancer-fighting drugs. The heist netted the thieves $75 million worth of goods and brought to the attention of the nation a problem that had been increasingly plaguing the pharmaceutical industry: the theft of pharmaceutical products by organized criminals.

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Today, thefts of pharmaceutical products are declining due to increased measures to protect the supply chain, but that doesn’t mean the problem isn’t any less serious say industry insiders.

“Sophisticated criminal organizations are increasingly stealing large quantities of medical products and re-introducing them into the legitimate supply chain, including into pharmacies and hospitals,” said Alex Dahl, shareholder, Brownstein Hyatt Farber Schreck, a firm aiding the Coalition for Patient Safety and Medicine Integrity in its lobbying efforts. “They are putting patient safety at risk because improperly cared-for medical products, which could be used by unsuspecting patients and healthcare professionals, can be ineffective or perhaps even harmful.”

“There’s enough (stolen product) ending up back on the legitimate supply chain that makes it a legitimate concern for manufacturers and the industry as a whole,” said Dan Burges, senior director, intelligence, FreightWatch International, a logistics security solutions company.

According to FreightWatch, there were 49 cargo thefts of pharmaceutical products last year with an average value of $3.8 million. So far this year, 20 cargo thefts have occurred with an average value of $460,000.

“What’s the difference between a theft of a tractor trailer load of Hitachi flat screen televisions and a tractor trailer load of aspirin?” Chuck Forsaith, supply chain security director, Purdu Pharma, and chairman of the Pharmaceutical Cargo Security Coalition asks. “The difference is if you recover those television sets six months from now, a year from now, even a week from now, you can turn right around and you can put those television sets right back on the shelf again,” Forsaith said. “You steal something that’s consumable, be it aspirin, be it insulin, be it Copaxone … and you lose track of it for a period of time and you’re not able to verify the conditions under which it was maintained before it reentered a legitimate supply chain, you’ve got problems. You can’t necessarily, if you recover it, put it back. In certain instances that product might have to be destroyed. You’ve suffered a loss and then you have to factor in what it costs you to replace it, what you lost in customer confidence when you lost the load itself, the insurance costs, the law enforcement costs.”

Given all that’s at stake – immense costs on the pharmaceutical end, danger to patient health and increased costs of caring for patients endangered by potentially unsafe products – the pharmaceutical industry has been taking more measures to protect the supply chain.

Among those measures is the SAFE DOSES Act, bipartisan legislation introduced by senators Charles Schumer (D-NY) and Jon Kyl (R-AZ) and supported by Coalition for Patient Safety and Medicine Integrity. If passed, the SAFE DOSES Act will increase the penalties for the theft of medical products and will offer more options to law enforcement officials to aid them in bringing down the criminal organizations engaged in the theft of medical products.

“The punishments that go along with (the theft of pharmaceutical goods) need to be stiffer based on the fact of the risk that could be associated with those particular products coming back around and being reintroduced into legitimate supply chains,” Forsaith said. “Right now if you go steal roof shingles and you also go steal a tractor trailer load of medicine, the penalty’s the same.”

For more on supply chain, see bit.ly/hfn-supply.

Topic:

Supply Chain

Theft of medical products poses threat

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