The scourge of fake and substandard drugs is an international issue that will require global agreement to counter it, according to a report issued Wednesday by the Institute of Medicine.

Both poorly manufactured medications and those that are not what they are presented as pose health risks, sometimes dire, to people. And they increase the cost of health care, can lead to development of drug resistance and otherwise create harm, it said.

More than 124 countries had problems with fake or substandard drugs in 2011, from product that had been diluted so it was ineffective to contamination to drugs that didn't even have the active ingredient they were supposedly built around, the report said.

The risk is greatest in developing countries, where medication often is un- or under-regulated. But even in the United States, it's problematic. The U.S. Food and Drug Administration just last month confirmed that some patients received a fake version of a cancer treatment, Avastin.

In another case cited in the report, "negligent production at a Massachusetts compounding pharmacy sickened more than 600 people, killing 44, from September 2012 to January 2013. The vast majority of problems, however, occur in developing countries where underpowered and unsafe medicines frequently compromise treatment of deadly disease and accelerate drug resistance, affecting millions," it said.

The U.S. product in question was contaminated steroids. Other cases tracked by the FDA include contaminated heparin, a blood thinner, that killed more than 60 people. That product was made in China.

Cheap and fake

Part of the problem is that drug ingredients may come from multiple sources. Not all countries monitor quality or demand drugs meet consistent standards. That has plagued efforts to solve the issue: The report noted that disagreements, including about definitions, have "hampered coordinated efforts."

Cost is another issue. "Because the cost of the active ingredient represents the lion's share of the medicine's price, scrimping even modestly on the active ingredient can vastly boost profit," they wrote. "Costs can be shaved in other ways as well: by not rigorously cleaning equipment between runs, which can result in contaminated drugs or by failing to invest in adequate water filtration systems, which ratchets up the risk of microbial growth."

The group said crime and corruption drive the fake medicine business. "Falsifying medicines has been called the 'perfect crime' because the cost of making a fake drug is minimal and often leaves no paper tail, making it difficult to investigate and prosecute," the report said. "Spotting a fake medicine requires specialized skills and equipment since legitimate and illegitimate products often are indistinguishable and mix freely in unregulated markets."

According to the IOM, the impact is felt most strongly by low- and middle-income countries, where the cost of medications makes up as much as 60 percent of health spending and 90 percent of the people pay for the medications they need themselves. The report said that a month's worth of the least expensive generic ulcer medication costs more than three days' wages for an average government employee in many regions such as Africa, Eastern Europe and the Middle East.

Hard to regulate

Online pharmacies pose their own problems in the system, the report noted, because people look for low-cost options and may not know what they're actually ordering or the quality of medication they will receive. Effort to change that would focus on alerting consumers to the risks, since there are no obvious ways to control Internet drug sales or monitor or enforce quality in what people order.

That's one reason the panel that wrote the report has concluded the solution will take international agreement.

"Given the international nature of modern manufacturing and trade, every nation has a stake and a role to play in ensuring the production and sale of high-quality medications," said global health law expert Lawrence O. Gostin, of Georgetown University Law Center, who also directs the World Health Organization Collaborating Center on Public Health Law and Human Rights, in a statement released with the report. "Falsified and substandard medicines are a grave public health problem because they are ineffective, promote drug resistance and even cause severe illness and death, particularly in developing countries where they regularly flood the market. We're calling on WHO, in collaboration with regulators, companies and civil society worldwide, to adopt a global code of practice, build national regulatory capabilities and promote international cooperation."

Gostin told reporters that fake and substandard drugs are a bigger profit-maker than the illicit drug trade.

The issue is not drug counterfeiting, which refers not to the quality of a medication but to trademark infringement. The issue is cheap-quality, ineffective or contaminated versions of drugs, as well as those that are simply bogus. The panel called for consistent use of the terms "substandard" and "falsified" across international borders.


The IOM panel suggests:

— States only license wholesalers and distributors who meet accreditation standards set forth by the National Association of Boards of Pharmacy.

— Creation by the U.S. Food and Drug Administration of a database where violations and disciplinary actions could be maintained.

— Tougher tracking of products, each one with a unique identifier, so all medications are accounted for and come from proper sources. That includes consistent standards across government entities.

— Financial assistance to help drug manufacturers in developing countries manufacture to internationally accepted standards.

FDA Commissioner Dr. Margaret Hamburg issued a press release praising the report. "The IOM report spotlights a critical global public health issue," she said. "Falsified and substandard medicines adversely affect the lives of millions around the world, and the issue must be elevated to the highest levels of international discourse."

The FDA, she said, already has some of the proposals underway, including better technology, more global regulatory capacity, stronger monitoring and development of science-based standards.

The committee included pharmacists, doctors, policymakers, legal experts and others, most from the United States. But there were also panelists from Netherlands, South Africa and Brazil. The study was sponsored by the FDA.

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