The Doctor’s Advocate | First Quarter 2014
An Ounce of Prevention

Globalization and Counterfeit Drugs

Thomas T. Kubic, Treasurer, Partnership for Safe Medicines, and Susan Shepard, MSN, RN, Director, Patient Safety Education, The Doctors Company

The consequences of receiving and distributing counterfeit drugs may be deadly for patients and career-ending for physicians that break the supply chain. Diligence can protect everyone.

In the past few years, a number of developments have occurred that might seem to justify importing medications from overseas. Issues have included drug shortages and patients having trouble affording their medications. The world outside of America's borders appears to offer a ready supply of cheaper medications easily obtained from unlicensed distributors, trips across the border, or online pharmacies.

The laws that prohibit importing non-FDA-approved medicines are designed to ensure that patients receive medications that meet the FDA's requirements for safety, purity, and potency.

Consider the following cases:

In 2012, a Missouri physician pleaded guilty to receiving and distributing non-FDA-approved cancer medication. His unlicensed distributor was also implicated in a scheme that involved counterfeit cancer medications containing no active ingredients. The physician lost his license to practice medicine, received over $1.2 million in fines, and is prohibited from participating in federal health programs for the next seven years.

In 2013, a Tennessee physician pleaded guilty to the same charges. The physician received a sentence of two years in jail, and, along with the two partners in his practice, must pay $4.4 million in fines and restitution.

A physician in Washington brought drugs across the border from Canada without ensuring proper storage during transit. Although questioned by border guards, he was allowed to bring the medications into the country and administered them to several patients. He was sued for malpractice. Although the medications did not appear to cause any harm, he was convicted of using non-FDA-approved medications and settled the cases brought against him. The physician was also confined to house arrest.

There are three ways that physicians become involved in counterfeit drug situations:

  1. A physician orders drugs from an unauthorized distributor selling "discounted" foreign medications.
  2. A valid, licensed wholesaler unwittingly breaks the law by providing non-FDA-approved medications.
  3. A physician advises a patient to buy medication from an unapproved online supplier—a recommendation that may lead to liability.

The ramifications regarding importation and reimportation of non-FDA-approved medications include the following:

  • Under the Federal Food, Drug, and Cosmetic Act, it is illegal to import unapproved, misbranded, adulterated, or foreign versions of U.S.-approved medications into the United States.
  • Medical professional liability coverage issues may arise. Malpractice insurance may not cover any errors in this area, making the physician personally liable for patient claims.

Every healthcare professional who purchases medication is familiar with faxes from persistent direct sales companies that inundate the office with daily price lists. Regardless of the supplier, purchasing or using non-FDA-approved drug products exposes the physician to criminal and civil liability. The medication doesn't even have to be counterfeit for the physician to suffer legal consequences.

Protect yourself and your patients from the dangers of counterfeit medications:

  • Have clear policies that dictate how to verify the license of a wholesaler providing medications.
  • Require training for everyone involved in purchasing medications.
  • Obtain medications only from secure sources.
  • Be aware of the warning signs that a product may be counterfeit:
    • Are prices or deals too good to be true? Recent incidents started from a physician trying to make extra profit from discounted foreign medications
    • examine the labeling on medications you receive. Is it in English?
  • Call the manufacturer to check if the lot number is still valid.
  • Check the wholesaler's license at least twice each year. Check it more often if the phone number or other identifying information changes.
  • Use the following steps to verify distributors before purchasing drugs:
    • Verify with the manufacturer. Many drug manufacturers provide a list of distributors that are approved to distribute their products.
    • Find Verified-Accredited Wholesale Distributors (VAWD). The VAWD program from the National Association of Boards of Pharmacy certifies wholesalers in many states. Visit
    • Verify the license. Wholesalers are licensed by individual states. Verify a distributor’s licensing with the state that issued its license. Find a list of state licensing boards at

Helping Patients Avoid Counterfeit Drugs

To save money, patients have also broken the supply chain by buying medications online from unlicensed pharmacies. Encourage patients who are having trouble affording medication to explore assistance programs that offer free or low-cost medications.

You can also consider prescribing a generic, or tell the patient about shopping online with U.S.-licensed Verified Internet Pharmacy Practice Sites. Get information on the program at

You can give your patients a handout, "How to Save Money Safely with Online Pharmacies," from the Partnership for Safe Medicines to effectively cover these options.

Patient Safety Tips

  • Ensure that each patient has an updated medication history. Find out if the patient is taking medications that are imported.
  • Encourage patients to use one pharmacist as a means to help prevent drug interactions when combining medications. The pharmacist will maintain a current medication profile that lists all medications prescribed, thus increasing detection and prevention of potential problems.
  • Educate patients about the risks of obtaining drugs from foreign sources.
  • Consult with a local pharmacist on appropriate generic substitutions that are available with the patient's insurance coverage.
  • Consider financial concerns and alternatives when prescribing medications. Many pharmaceutical companies offer drug assistance programs. Some pharmacy chain programs offer generic prescriptions at a lower cost.
  • If you are considering using a drug off-label, have a well-documented informed consent process.

Additional Resources

Partnership for Safe Medicines (PSM)

PSM's training manual for doctors and staff is the L.E.A.D.E.R.'s Guide for Physicians. The organization also has information about the risks to physicians who order non-FDA-approved medications, including illegally billing insurance for these types of medications and common myths associated with ordering online. There are handouts you can use to help patients find ways to afford medication without buying it from unlicensed websites pretending to be pharmacies. Get more information at


Rx-360 is an international consortium committed to ensuring patient safety by enhancing quality and authenticity throughout the supply chain. Available resources include a physician's training manual that explains how to identify the warning signs of unlicensed and untrustworthy medication distributors. Register at

Am I allowed to buy from foreign sources if there’s a shortage of a drug?

No. Because drugs imported from foreign countries are not subject to FDA oversight and monitoring, they may lack the quality controls that ensure drug safety. To alleviate shortages, the FDA will exercise its regulatory discretion to inspect and license foreign manufacturers.

In a recent situation involving a shortage of injectable drugs used in total parenteral nutrition, the FDA worked with a foreign source to bolster supply in the U.S. The agency evaluated the foreign drug to ensure that it is of adequate quality and does not pose undue risks for U.S. patients.

In a shortage situation, the FDA never authorizes anyone to buy medications even from a manufacturer or distributor on the Internet that seems trustworthy.

Tom Kubic, a retired FBI deputy assistant director, is the president of the Pharmaceutical Security Institute and the treasurer of the Partnership for Safe Medicines, a coalition of over 70 groups dedicated to stemming the threat of counterfeit drugs in America.

The Doctor’s Advocate is published by The Doctors Company to advise and inform its members about loss prevention and insurance issues.

The guidelines suggested in this newsletter are not rules, do not constitute legal advice, and do not ensure a successful outcome. They attempt to define principles of practice for providing appropriate care. The principles are not inclusive of all proper methods of care nor exclusive of other methods reasonably directed at obtaining the same results.

The ultimate decision regarding the appropriateness of any treatment must be made by each healthcare provider considering the circumstances of the individual situation and in accordance with the laws of the jurisdiction in which the care is rendered.

The Doctor’s Advocate is published quarterly by Corporate Communications, The Doctors Company. Letters and articles, to be edited and published at the editor’s discretion, are welcome. The views expressed are those of the letter writer and do not necessarily reflect the opinion or official policy of The Doctors Company. Please sign your letters, and address them to the editor.

First Quarter 2014

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Director's Forum
An EMR-Related Claim

An Ounce of Prevention
Globalization and Counterfeit Drugs

Politically Speaking
Federal Legislation

Earn Free CME Credits

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Industry and Company News: First Quarter 2014

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